In “The One Minute Millionaire,” authors Hansen and Allen say there are two routes for climbing “Millionaire Mountain”: the long route and the short route. The long route is the safest and easiest. You can become a millionaire by simply investing a dollar a day (roughly $30 a month) over a period of time.
Here is how long it would take you to become a millionaire by investing a dollar a day:
* at 3% interest: 147 years
* at 5% interest: 100 years
* at 10% interest: 56 years
* at 15% interest: 40 years
* at 20% interest: 32 years
Thus, you can become a millionaire in your lifetime by finding investments that yield at least 10% annually and sticking with the investment program. Most people don’t want to wait that long. But most impatient people never get rich. The authors sagely advise that while following their get-rich-quicker scheme, you “take the long route at the same time” by putting aside an extra $50, $100, or even $500 a month toward your retirement. Who could argue with that? The secret to becoming a millionaire faster?
Invest more money and get a higher return on your investments. That’s basically right. We have covered both of these strategies numerous times in past ETR messages. You can invest more money only if you have more money to invest — and having more money is a matter of making more and spending less.
In one of our first New Year’s resolutions for 2003, I asked you to get to work on increasing your income by taking steps to increase your salary (Message #772). Have you started yet? If not, why not? If you have begun, are you making satisfactory progress? Regarding higher returns: We’ve talked about this too. You can and should try to get good returns on your stock and bond investments — but don’t get greedy and put a big chunk of your money into speculative investments. You’ll get burned. Instead, shoot for 10% in the stock market and whatever you can get with bonds (Message #773).
Rely on real estate (Message #774) and your own side business (Message #775) to bring you the really big ROIs. How are you doing on these goals? Now is a good time to check your progress, since there is still so much of the year left to do great things.
[Ed. Note. Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]