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Become a Millionaire
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US Government or States - College Savings Programs
College education in the United State is becoming excessively expensive with each passing day. Various kinds of federal and non-federal financial aids are available for students However, not only are they difficult to obtain, but also they are often not enough to abbreviate the gap in the cost of education. In attempt to make higher education easily accessible to more Americans, the federal and st... Read personal finance article
Tips On Managing Your Money
No matter how rich you may be, you still have to worry about managing your money so that you will be able to send your children to college, go on nice vacations, or save money for retirement. Fortunately, you don't have to do this on your own. There are qualified professionals that are trained especially to help you with managing your money, and assist you in making the most of your income.
Become a Millionaire
This article is addressed to what some call the "MTV" or "Boomerang" generation members born around 1981 or later. In other words, to those who are in their mid-twenties. With that out of the way, let me begin with two, easy-to-follow lessons that will eventually lead to the purpose of this article. The first is the history of the stock market.
According to the 2005 Yearbook published by Ibbotson Associates, the long-term average return from the stock market is 10.4% (pg. 29). Ibbotson starts their long-term series of financial data in 1926 (pgs. 27, 201). There are only three components to stock market returns: earnings growth, valuation-level changes (i.e. the change in the P/E ratio), and dividend yields. Assuming that this nearly eighty-year trend will continue, we can project that, even with wild fluctuations that are caused by global wars, weather, or economic disasters, the market always seems to find a balance and return to it's norm. Now keep that 10.4% figure in mind.
Lesson two; compound interest. This simple calculation is based on investing a fixed amount and receiving a return on your investment based on a percentage. Take $100 and put it in the bank at 5% for a year and you'll end up with $105 a year later. But compounding allows you to keep that $105 and receive $110.25 in the second year. Go foward another year and you're at $115.76, although you added nothing more. From the original $100, you made a $15.76 profit. Neat, right? But not a lot of money. Okay, you still get the idea. Invest, leave it alone, and watch it grow. That's the principle behind compound interest.
So, what's the big deal? The big deal is what happens if you use the magic of compound interest and the stock market together. Sprinkle in a regular investment strategy and bam! But I'm getting a bit ahead of myself, so let's start over.
Suppose you're typical 24 year old. You begin each day with a cup of Starbucks coffee, the Vente Latte at $4.00, after tax. On the way home, you stop and get an Iced Cappuccino Grande for another $4.00. So each day you spend around eight bucks treating yourself. But on weekends, you buy a loaded pizza instead. Or you still get coffee, Either way, for this example, you spend around $58 a week on coffee, cigarettes, pizza, beer, or something fun like that.
I'm asking you to give it up. That's right, dump the expense. Kick the caffeine habit. Or give up cigarettes that are bad for you anyway. Now here's what you do with that money. Invest in the stock market, or more specifically, mutual funds. Try something safe and large that covers the whole Standard and Poors, S & P 500 or Wilshire 5000 indexes. Every week, toss in the $58 or every month, $232. Or, if you must, $3000 a year. Every year until you reach 60. You can easily open an online account with many internet stock brokers that charge practically nothing.
I know what you're thinking, because (a) I'm somewhat psychic and (b) because I have a 22 year old daughter who's saying, "You're nuts!" She saying it because (a) she won't give up the coffee, (b) she can't imagine doing it for the next 36 years, or (c) she's asking, what's the point? Well, the point is that you will have invested $3000 for 36 years or $108,000. But here's the really cool result. Because of what you learned in the first few paragraphs, investing in the stock market should get you at least a 10.4% return and, because you left it in and reinvested it, you have the miracle of compound interest working for you.
So, why is that really cool? Are you sitting down yet? Because you'll have a cool ONE MILLION DOLLARS sitting in your account! And you only invested a little over $100,000.
Now think about it. You're young, ambitious, and will you really miss that Starbucks jolt? You will? Fine, then go buy a pound of hazelnut-cream coffee beans for $8 from the grocery store. Amazingly that can make 64 cups of coffee, enough for a month of caffeinated pleasure. And you'll be happy to do it while your money is churning away toward it's million-dollar payout. It's your decision to make right now and the easiest way to become a millionaire you'll ever have. You can thank me later. Love, Dad.
Jeffrey Hauser was a sales consultant for the Bell System Yellow Pages for nearly 25 years. He graduated from Pratt Institute with a BFA in Advertising and has a Master's Degree in teaching. He had his own advertising agency in Scottsdale, Arizona and ran a consulting and design firm, ABC Advertising. He has authored 6 books and a novel, "Pursuit of the Phoenix." His latest book is, "Inside the Yellow Pages" which can be seen at his website, http://www.poweradbook.com. Currently, he is the Marketing Director for thenurseschoice.com, a Health Information and Doctor Referral site.
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Wealth Creation Secrets
Are you wondering what it takes to become real rich and wealthy and successful in your own business? This article highlights three timeless secrets to wealth creation that people have known throughout the ages.
Dream Big & Believe in your dreams
When Napoleon Hill wrote his famous book "Think and Grow Rich", he found that being rich is not dependent on your pre-existing financial status and found that the common denominator across all the people he interviewed was the power of their belief and conviction. All these people had great dreams and believed in their dreams and as a result made an effort to push and achieve those dreams. Today, let no one look down on your dreams and aspirations and success may be yours.
Plan to achieve your goals
Dreams alone cannot make wealth overnight. Spend some time to chart out your strategy and plan for the longer term. Making money involves starting a new idea, growing it and thinking on doubling your output and tracking your expenses. Once you find that one idea works, start thinking of adding a system to your business idea and then plan to grow. Planning is important in making money and you should always spend some time reviewing your plan daily and then make changes in response to changing market conditions.
3. Leverage on experts
Napoleon Hill found that most rich people have a team working for them. This team provides input and ideas that he might not have within his own company. Attorneys, accountants, bankers and external consultants are great additions to your team and can help you navigate serious potholes in your business. Thus a successful money making system has to have a great team behind it for it to succeed. Remember that you should always tap on the collective wisdom of your team and when you do, your financial output will start increasing very fast.
Making money today has not changed very much and the basic principles behind it remain the same. What hinders people from making money today is that they do not spend time dreaming, planning to achieve their goals and leveraging on talented people around them to as to achieve greater financial success. Great success begins with a dream. Do something for your financial destiny today as Anthony Robins says and you might find your financial future changing for the better.
Copyright © 2006 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author's information with live links only.)
Joel Teo writes on various financial topics relating to Ahwatukee Real Estate Investment. Signup for his free online Real Estate Investing newsletter today and gain access to the "Six Day Real Estate Investment Profits Course" now at www.realestateinvestment101.info/Ahwatukee.html
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