Six ways to get rich

//Six ways to get rich

Six ways to get rich

We recently read an article by Stacy Johnson, a CPA and financial writer, explaining how to get rich. It wasn’t head-smackingly enlightening, but sometimes it is useful to remember the basics. It asserted there are only six ways to get rich:

1. Marry money
2. Inherit money
3. Exploit a unique talent
4. Get exceedingly lucky
5. Either own or lead a successful business
6. Spend less than you make and invest your savings wisely over a long period of time.

It didn’t mention crime, but perhaps that is included number three. Not that we recommend it.

Whatever your success in achieving any of the first five, you will not go wrong in slavishly following number six. There are some rules offered to facilitate this process.

1. Never spend more than you make. Ever.
2. Avoid debt like the plague.
3. Buy during panic; sell during euphoria.
4. You can look rich or be rich, probably not both.
5. Live like you’ll die tomorrow; invest like you’ll live forever.
6. The riskiest thing you can do is take no risk.

We all know these things, at least on an instinctive level, yet most of us fail to heed them consistently. Life gets in the way. Emotions take over. Perhaps the most important of these is number six. It’s tempting to be very cautious with your money, but here are a couple of examples to consider:

$200 dollars invested monthly for 30 years at two percent will yield almost $100,000, irrespective of taxes. The same $200 invested for the same term at twelve percent will return nearly $900,000. There is a lot of territory in between, but clearly, some risk is warranted in securing the future.

You don’t want to lie awake or fight with your spouse over money, but the most appropriate degree of risk to take may be just a shade above your comfort level.

The first five methods for getting rich may be possible, but don’t wait for them to happen.  Get started on number six now.

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2020-11-12T13:23:55-06:00 June 1st, 2017|Financial Planning|0 Comments

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