How to become a millionaire.

[jd4320t]

I don't ever agree with everything Dave Ramsey says but videos like this one sure make a lot of sense to me. There are too many people in this great country who aren't saving a dime and it will hit them hard someday.

I think everyone should watch this video.

Also, I'd like to add that it's never to late. Even if you're in you're 40's or 50's you can still start saving. I work with people every day who are in their 50's and know they can't retire anytime soon. I even know a few who don't even put enough in our 401k to get the company match.

[video=youtube;7wjuCgtL0yA]https://www.youtube.com/watch?v=7wjuCgtL0yA[/video]

 

[Lebowski]

A penny saved is a penny earned.


Also, when it comes to spending money this is something I take into consideration often:

“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.”

― Terry Pratchett, Men at Arms: The Play

 

[smokingman]

You will never become rich earning income.It is nearly impossible.
With interest rates at zero and PE on stocks over 25 you certainly are not going to save or invest your way into being rich.

I grew up fairly wealthy.One thing I learned from an early age is the wealthy actually hate earned income(taxes,and those with earned incomes are actually looked down upon by the very wealthy).I also learned that if you ever really want to generate wealth you would be much better off not having an earned income but revenue streams so you avoid paying taxes.The very wealthy do not see the world in the same way you do.Most scoff at things like hard physical work as beneath them.Like it or not we do have a class society.

Three ways to get "rich".
1.Inherit it.
2.Developing income streams.A car wash,a fast food chain,rental property,ect...
3.Develop,control,and market a good idea.Examples Bill Gates,Ray Kroc,Sam Walton,Mark Zuckerberg


*Having political connections,banking connections,and business connections help with all three of the above.

Number two is by far the easiest for most people,and a great deal of wealth can be generated in small streams.

*I watched the video.Why did he not mention the 60% drop in the stock market in 2008?Average 12% a year for 20 years,and ONE bad year can wipe out more than half of your retirement account,and it did for many.

 

[ghuns]

How to become a millionaire? First become a billionaire and then open a restaurant.

 

[Scout]

You mention Ray Kroc, he never started McDonald's, he was a blender salesman who happened to sell blenders to an extremely popular drive in. He got into a partnership with the McDonald brothers and turned one small restaurant into a chain, eventually buying them out and forcing them out of the restaurant business altogether.

 

[smokingman]

You mention Ray Kroc, he never started McDonald's, he was a blender salesman who happened to sell blenders to an extremely popular drive in. He got into a partnership with the McDonald brothers and turned one small restaurant into a chain, eventually buying them out and forcing them out of the restaurant business altogether.

I know,but he did what I mentioned.He had an idea,he gained control,and then marketed that idea.The original restaurant may have not been his idea,but what followed was.

 

[Scout]

A little bit of math, I inherited a house, and if rent it for $600/ month, in 20 years I'll have $144,000 and be 60 years old. How do I turn that into a million? I suppose I could double it with another rental.

 

[Scout]

I'm not saying it was the wrong way, just that the plaques in the restaurants are both true and misleading. Plus I'm using it to show that you don't always need a lot of capital if you have the right idea, and hard work.

 

[smokingman]

A little bit of math, I inherited a house, and if rent it for $600/ month, in 20 years I'll have $144,000 and be 60 years old. How do I turn that into a million? I suppose I could double it with another rental.

Rent will of course go up,as will the value of the property,but yes you need more than one income stream preferably multiple in unrelated industries.Any business that generates a profit is an income stream(as long as you are the owner and have control).It does not matter if it is a farm,a bank,a rental property,or a vending machine.

I am not saying income streams generate instant wealth,but I would not be saving the $600 per month.The best part about most income streams is they do not die.When you "retire" they are still generating income.So spend as little as you can now and use the 600 per month to develop more income streams.

Lets say you invest it,and by some miracle earn 12% a year.Right away knock off inflation,lets say a generous 3%.So you are ahead 9%.Now pay 33% of that in taxes.You are up 6%.So for a good year you made 6%,and risked your entire savings.That is the other thing about having multiple income streams,it reduces your risk.You are not going to wake up one morning and have 40% of your wealth wiped out because of a bad GDP print.


I also agree on hard work,spending as little as possible,and saving to a degree.It is just not ever going to make you truly wealthy.

 

[Scout]

Seems I should be rolling in dough now, considering I made 70k+ last year, have an inherited mutual fund, an IRA through work, and this rental. (Currently is bringing me $300/month, renter is finishing the remodel my brother started in exchange) I'm just not feeling affluent though.

 

[smokingman]

Seems I should be rolling in dough now, considering I made 70k+ last year, have an inherited mutual fund, an IRA through work, and this rental. (Currently is bringing me $300/month, renter is finishing the remodel my brother started in exchange) I'm just not feeling affluent though.

What are your monthly expenses?

 

[smokingman]

I am going to throw a link(one of many) that may help someone.
I have no affiliation with any company,product,or service represented but am just giving an example of what is out there.
Best Franchises under $70,000 in 2015 | Franchise Gator.com

 

[Scout]

That's what I need to really look at.
House payment, truck payment, bike payment.
Bed payment, engagement ring payment, student loan payment.
Current house to maintain, rental house to maintain, lake house to maintain.
Cell phone, Netflix, normal utilities.

 

[patience0830]

That's what I need to really look at.
House payment, truck payment, bike payment.
Bed payment, engagement ring payment, student loan payment.
Current house to maintain, rental house to maintain, lake house to maintain.
Cell phone, Netflix, normal utilities.

Sell the bike, rent or sell the lake house, kill the netflix. Refi the house if your interest is over 5%.

Voila!

 

[smokingman]

Sell the bike, rent or sell the lake house, kill the netflix. Refi the house if your interest is over 5%.

Voila!

I would add eat and spend like you make 20k.Pay off the highest interest first,and do not take on any new debt for any reason until you get down to less than 20% of your income going out in debt payments.

You will feel like a king in no time.

 

[gregkl]

You will never become rich earning income.It is nearly impossible.
With interest rates at zero and PE on stocks over 25 you certainly are not going to save or invest your way into being rich.


*I watched the video.Why did he not mention the 60% drop in the stock market in 2008?Average 12% a year for 20 years,and ONE bad year can wipe out more than half of your retirement account,and it did for many.

It's interesting to read the posts above. Dave Ramsey says one thing and then there is reality. My daughter and her husband have adopted the Dave Ramsey way of managing finances and it is working well for them. I fully expect they will retire with a lot of security and probably at a younger age.

I am a minimalist. Part of that philosophy of living is not spending a lot of money on stuff. I have put money into 401K's for most of my working life. There was 3 years in the last 30 that I did not put money into a retirement account. I now have about enough money to live 3 years in retirement at my current spending rate.

I don't own motorcycles, boats, 4-wheelers. We rarely go out to eat. We don't take vacations. We don't have Netflix(though we may do that instead of cable when we move into our home we just bought). I don't own many guns, certainly no more than one of any platform(no multiple 1911's, AR's). I get a kick out of people saying how those type of guns multiple once you get the first one!

Could I tighten the belt and save more? Probably. But when do you say "I need to live a little today, for I know not what tomorrow will bring? Or even if there is a tomorrow for me?"

I could stop shooting altogether. That would save some money. I just have a hard time reducing my life to doing nothing for a future that may or may not be there. I would like to strike a balance, but there is not enough money in my life to be balanced and have a seven figure retirement portfolio.

I had a boss once who said; "you can't save your way to prosperity". I think there may be some truth in that.

 

[ChristianPatriot]

It's interesting to read the posts above. Dave Ramsey says one thing and then there is reality. My daughter and her husband have adopted the Dave Ramsey way of managing finances and it is working well for them. I fully expect they will retire with a lot of security and probably at a younger age.

I am a minimalist. Part of that philosophy of living is not spending a lot of money on stuff. I have put money into 401K's for most of my working life. There was 3 years in the last 30 that I did not put money into a retirement account. I now have about enough money to live 3 years in retirement at my current spending rate.

I don't own motorcycles, boats, 4-wheelers. We rarely go out to eat. We don't take vacations. We don't have Netflix(though we may do that instead of cable when we move into our home we just bought). I don't own many guns, certainly no more than one of any platform(no multiple 1911's, AR's). I get a kick out of people saying how those type of guns multiple once you get the first one!

Could I tighten the belt and save more? Probably. But when do you say "I need to live a little today, for I know not what tomorrow will bring? Or even if there is a tomorrow for me?"

I could stop shooting altogether. That would save some money. I just have a hard time reducing my life to doing nothing for a future that may or may not be there. I would like to strike a balance, but there is not enough money in my life to be balanced and have a seven figure retirement portfolio.

I had a boss once who said; "you can't save your way to prosperity". I think there may be some truth in that.

So you can't save your way to prosperity but you fully expect your daughter and her husband to retire with security at a younger age using Dave's methods...........

 

[gregkl]

So you can't save your way to prosperity but you fully expect your daughter and her husband to retire with security at a younger age using Dave's methods...........

Weird, huh?

 

[ChristianPatriot]

It's interesting to read the posts above. Dave Ramsey says one thing and then there is reality. My daughter and her husband have adopted the Dave Ramsey way of managing finances and it is working well for them. I fully expect they will retire with a lot of security and probably at a younger age.

I am a minimalist. Part of that philosophy of living is not spending a lot of money on stuff. I have put money into 401K's for most of my working life. There was 3 years in the last 30 that I did not put money into a retirement account. I now have about enough money to live 3 years in retirement at my current spending rate.

I don't own motorcycles, boats, 4-wheelers. We rarely go out to eat. We don't take vacations. We don't have Netflix(though we may do that instead of cable when we move into our home we just bought). I don't own many guns, certainly no more than one of any platform(no multiple 1911's, AR's). I get a kick out of people saying how those type of guns multiple once you get the first one!

Could I tighten the belt and save more? Probably. But when do you say "I need to live a little today, for I know not what tomorrow will bring? Or even if there is a tomorrow for me?"

I could stop shooting altogether. That would save some money. I just have a hard time reducing my life to doing nothing for a future that may or may not be there. I would like to strike a balance, but there is not enough money in my life to be balanced and have a seven figure retirement portfolio.

I had a boss once who said; "you can't save your way to prosperity". I think there may be some truth in that.

Here's another gem from that post: "Dave Ramsey says one thing and then there is reality....I mean it's working fantastic for my kids and they're doing awesome.....but that's not reality."

I'm paraphrasing of course, sprinkle in some purple if you feel the need.

 

[GodFearinGunTotin]

I watched the video and he's right...but all the cards have to fall into place. The math doesn't lie. However, anybody's that spent time watching their 401K rise and sink would dearly love to have all their eggs in that basket that averages 12% for 75years. I did what Dave advocated. Ever since I started working, I put at least 10% of my salary into the company's plan; for the last 20 or so years, I put in 15%...and for most all of those years, the company provided a match (some years better than others). That 7 million dollar bogey maybe mathmatically possible, but I obviously never found his 12% gold mine.