So you want to be a millionaire

MSN Money ^ | June 14, 2006 | Liz Pulliam Weston

[libstripper]

The day my husband and I became millionaires was a lot like any other day.

He went off to work, grumbling about the commute. I was fretting about our utility bill and decided to check our personal finance software to see how much more we were paying than the previous year. While I fiddled with the numbers, I told the software to update our account balances. Lo and behold, the net worth column showed seven figures where before there had been six.

There was no popping of champagne corks, no trips to the Continent, no quitting of jobs. The fact that the experience was so mundane speaks volumes, both about how millionaires are really created and what it means to be one. Looking for a loan? Check out MSN Money's Loan Center

[Teacher317]

Making a million dollars is easy. Start with 20 million, and invest in some liberal causes like Air America.

[soloNYer]

That was a good one.

[Hatteras]

You.. can be a millionaire.. and never pay taxes! You can be a millionaire.. and never pay taxes! You say.. "Steve.. how can I be a millionaire.. and never pay taxes?" First.. get a million dollars.

Now.. you say, "Steve.. what do I say to the tax man when he comes to my door and says, 'You.. have never paid taxes'?" Two simple words. Two simple words in the English language: "I forgot!" How many times do we let ourselves get into terrible situations because we don't say "I forgot"? Let's say you're on trial for armed robbery. You say to the judge, "I forgot armed robbery was illegal." Let's suppose he says back to you, "You have committed a foul crime. you have stolen hundreds and thousands of dollars from people at random, and you say, 'I forgot'?" Two simple words: Excuuuuuse me!!"

[BluH2o]

$5,000 invested at age 25 at 8% will turn into about $80,000 by age 60. Follow that approach over an entire career and you will retire a millionaire.

Allowing for inflation/cost of living increases not really a good strategy. Thirty-five years ago a well equipped upper end automobile cost around $6,000 . Today a comparable vehicle will cost at least $30,000.
Hitting the seven figure mark in net worth ain't what it use to be ... nice to have it, but not the prize it once was.

[litehaus]

"Besides, a million dollars isn't what most people think it is. It most certainly isn't so much wealth that you no longer have to worry about working -- nowhere near it in fact. It might be enough to retire on if you don't live too long."

---

Agreed!

[joe fonebone]

20 years ago, i read an article about the new millionaires........they are not business people, or lottery winners, but coupon clippers and savvy spenders / savers. Like my grandpa said, and my daddy said, save your money, pay cash for your major purchases ( if ya aint got the cash, ya don't really need it )and you will be able to retire early. Remember, your retirement account is a bill that has to be paid every month, just like your utilities and house payment. start when you are 25, and you will be able to retire at 50.

[Pablo64]

There is a book out by Thomas J. Stanley, Ph.D, and William D. Danko, Ph.D called The Millionaire Next Door: The Surprising Secrets of America's Wealthy, that is a very interesting read. They spent years studying not only how people got wealthy, but just who exactly is the millionaire next door. Most people don't realize who they know among their friends, neighbors, or business acquaintances who are millionaires. It's a very interesting book to read. In it they break down a lot of the old myths and stereotypes about millionaires and back it up with solid data.

[libstripper]

That's why owning your own home free and clear is so important. Even though you can't spend the value without mortgaging it, you protect most of your housing cost from inflation by freezing the equity and interest element of the cost at where it was when you bought the house and then eliminating that element entirely. Once the house is paid for all you have is insurance, maintenance, utilities, and real estate taxes, which, in my experience, amount to about a third of the equity/interest element of mortgage payments.

[linda_22003]

Sounds like Warren Buffett's advice on how to become a millionaire on airline stocks: "Start out as a billionaire".

[mrmargaritaville]

here's a good one that will illustrate their way of thinking:

In March of '93 AlGore was on with Larry King. King threw him a "hardball"-for King anyway.
"Vice President Gore, when you and Bill Clinton were campaigning you said you were going to raise taxes on millionaires. But your tax increase is on people making $250,000"
Gore's response-I kid you not-
"Well Larry if you make $250,000 a year, in four years you are a millionaire"
I don't know what was more outrageous-the fact that Gore said it, or that King did not jump him for it.

[wizr]

I paid cash for my "second" home, and I'm still way under appraisal on this one. Now, if I can only get my wife to sell this one, life would be berry berry good.

[WardMClark]

Or a millionaire's widow.

John? Is that you? Are you running again in '08?

[GOP Poet]

There is some truth to this, but if you spend it instead you have nothing. Nata, zero.

It is usually a habit established as well, so once someone becomes a saver they continue with this sort of behavior and increase their wealth base. If you spend it--usually in anything other than certain types of real estate or invest it in yourself (i.e. trade school, certain types of higher education)--you have nothing and nothing and nothing--over and over again, unless one changes their habits.

People with money have a tendency toward saving and not overspending (especially as people with less money do. To look like they have more money than they do). People who are not used to wealth and/or see themselves as poor just spend the money thinking that hopelessly they will never have any. Sure enough it becomes a self fulfilling prophecy.

[GOP Poet]

There is a book out by Thomas J. Stanley, Ph.D, and William D. Danko, Ph.D called The Millionaire Next Door: The Surprising Secrets of America's Wealthy, that is a very interesting read. They spent years studying not only how people got wealthy, but just who exactly is the millionaire next door. Most people don't realize who they know among their friends, neighbors, or business acquaintances who are millionaires. It's a very interesting book to read. In it they break down a lot of the old myths and stereotypes about millionaires and back it up with solid data.

Excellent book! My husband and I both read it--I second your recommendation.

[jrp]

Secure retirement? You'll probably need to accumulate at least $2 or $3 million in liquid assets, depending on your desired lifestyle. Or, just get a gubbermint job with gold-plated pension and health insurance benefits....

[GOP Poet]

I think this this true to a point and that point is when the money you can make off investing exceeds the what you can save on paying off the house.

If the interest is fixed, once could actually make a lot more money investing those dollars and while also paying down the house debt, rather than just paying down the debt and missing out on the steady acquisition/accumulation of money. The combination of the two overtime in my opinion (for what it is worth :-)is perfect.

This comes from my highly experienced financial advisors and they have shown this to be true.

[Gay State Conservative]

My Dad,a child of the Depression,taught me well regarding money and financial security.He taught me not with words but by example.

Simply put,he worked like the dickens,lived below his means,and never bought anything (except houses) for which he couldn't pay cash.

He had the family homestead,located in an upper middle class suburb of Boston,paid off within 8 years of having bought it...all the while supporting 4 kids and my Mom,who never worked outside the home.

Don't know if this could work for kids starting out today,but "delayed gratification" is something all kids might be wise to consider for their long term security.

[gogeo]

Sounds like too much work....I'm going over to the thread where buying gold cures all your ills.

Sure...who wants to wait 40 years?

(kinda gives new meaning to the phrase 'fool's gold,' doesn't it?)

[Pablo64]

I liked it because it really inspired me. The key, though, (and I had been told this by many wealthy people) is to somehow get into business for yourself. If you work and trade hours for dollars you don't have many of the tax advantages of being in business nor the ability to grow beyond what you are personally able to earn with the hours you can work (unless you are incredibly frugal and are a fanatic saver).

A very wealthy person once pointed out to me that there is a big difference between the person who signs a paycheck on the back and the person who signs it on the front.

[WesternPacific]

Sounds like too much work

I agree. I will retire a multimillionaire by retiring in the Philippines and converting my dollars into Pesos. That simple!! (for the serious minded; this is a joke)