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What is money? A man is a success if he gets up in the morning and gets
to bed each night and in between does what he wants to do. That money talks I'll not deny, I heard it once, it said goodbye. Money All it really takes to become a millionaire in America is a disciplined plan for savings and investing. Persistence counts more than education, genius etc. Optimism, a positive attitude and a belief in yourself is also most helpful. The reason most people don't have money is that they don't give it much thought. They go to work and pay their bills, save for vacations and the car repairs, and that's that. No wonder that most people can't afford to retire and must keep working, rely on social security and friends and family for support. An old person with out money is very sad. Consider all of the missed opportunities that must have passed them by. Consider the lack of self respect one must suffer each time they have to reach out their hand for financial help. The choices we make today determine our future standard of living. A family with an annual income of $50,000 that saved ten percent of that income ($5,000) each year starting in 1981 and invested in large company stocks, would have accumulated over $529,730 by the end of 1998. This is not trading in and out of the stock market but averaging in over time and sitting on your investments. A good place to start in our investigation is to distinguish between earning money and making money. When we work for money we are earning money. When our money works for us we are making money. We either work for money or money works for us. Our working lives are finite. If we are working for money, whether we are paid poorly or well, our income stops when we leave work. We could lose or jobs, our contract, we want to retire but with out savings and investments what is the alternative? With out savings or investments when they go on vacation of their contracts expire their money stops coming in. Often I have found high income earners who face dismal retirement prospects who are shocked the realization that even though they have made and spent millions of dollars throughout their lifetimes they have almost nothing in the way of assets much less income producing assets. They find they have some equity in there home a closet full of expensive suits and dresses but little in the bank, no retirement funds, and nothing in the market. Living off of a small social security check does not look attractive. We must recognize the difference between income, even very high incomes and true wealth. True wealth is income or valuable assets. Income is only a tool, often an extremely valuable and useful tool, to develop real wealth. Compounding money over time is the key to real wealth, how to best do this is always the question. The power of compounding is the greatest gift ever given to investors. If you start with a penny and double it twenty eight times you will have over a million dollars. twenty nine times over two million, thirty five times one and a half billion dollars! As you can see it is not necessary to start with a bag of money to have some spectacular returns. It is unrealistic to expect to double your money every day, but it is also unrealistic to believe one starts an investment with only one penny. Make good long term investments. If you are trading in and out of the markets, you will never obtain the big gains. If you had bought a big winner ten years ago, say a Microsoft or Dell computer , and made a nice gain and sold on a dip to capture a hundred percent profit, you would have missed out on the thousand percent profits you would have enjoyed if you held on. By not selling a great company investors can multiply their investment throughout their lives. Remember to buy quality companies that will be around for the long haul. Another menu for success is to diversify into different types of business. In other words develop multiple streams of income that are independent of and complement each other. When one area is slow the others may continue to do well or perform even better and help develop a strong financial foundation under your business success. One other concept we should consider is the concept of risk. A common misconception of risk is that risk means loss. In financial terms risk is actually means the difference, plus or minus, from your expected return. Often the biggest risk is often not taking a risk. Your financial future will be the sum of the results of the investments and opportunities you make today, as your current position is the sum of decisions you have made in the past, allowing that time and chance happen to all men. Financial Planning Review Plan a solid foundation and protection strategy for you your family and your investment strategy by following the following suggestions.
"The petty economies of the rich are just as amazing as the silly extravagances of the poor" -William Feather
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