Thursday, December 20, 2007

Thinking makes wealthy

Proper thinking, continuous dreaming and working for goal with a plan makes you millionaire. As you have learned the most important factor to becoming a millionaire is to save early and rely on compounding interest. You can easily have control over how much you save, but you can't do much about performance - performance isn't reliable. You could try to make 15% a year, but may end up losing 10% a year doing so. It is better to rely on a properly diversified mutual fund portfolio earning around 10-13% a year, then to gamble and never retire .You may be surprised at how relatively simple it is to become a millionaire. Here's how hundreds of thousands of others have done it: Be cautious about spending money. Before spending money on large purchases, ask yourself:

Can we become millionaire by saving?

Saving money is very important. If you are unable to save that much a year, or you are getting a late start, there is still hope. If you started at age 30, but could only save 5%, you would still become a millionaire by retirement at age 65. If you are playing catch-up and started investing at age 40, you would need to save about 11% a year to become a millionaire by age 65, but at age 50 you would have to save a nearly impossible 30% a year and your time frame would be so short that market volatility would play a bigger role in determining if you could retire or not. Is One Million Dollars Really That Much These days? Not really. Once you take inflation into account, being a millionaire today isn't as impressive as it used to be. For example, if someone was a millionaire in 1980, they would have to have about $1.9 million dollars in 2003 to match the wealth they had in 1980.


Becoming Millionaire

Every one loves money. Many a person dreams about becoming a millionaire. The thought of having lot of money gives pleasure. Americans are obsessed with becoming millionaires. Do a search on and you will find over 1,370 books with "Millionaire" in the title. Take a look at some of the most popular television shows over the past few years: Survivor (competing for $1 million), Who Wants to Be a Millionaire, Joe Millionaire and Deal or No Deal ($1 million prize). How many lotteries have a one million dollar prize?
It may not be as hard as you think. For example, a 30-year old making $50,000 a year (plus 3% raises each year), saving 10% of their income with a 10% return each year could expect to hit millionaire status at age 59. If they work until the traditional retirement age of 65, they will have over two million dollars saved up.
10% may sound like an aggressive amount of saving, but it could be a combination of employee contributions to a 401k plus company match.