Category Archives: Millionaire

Is A Millionaire Promise Wrong?

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I promised to be a millionaire when I was very young!  Here is my millionaire promise story…

My grandparents were in business, and in particular my grandmother was very business and finance oriented. As a young child (maybe 5 or 6 years old) I made a millionaire promise to my grandmother that someday in the future I would become a millionaire. She said surprised at my sudden “out of the blue” millionaire promise and said good and told me that she believe that I could do it if I tried hard enough. I remember her encouragement making me happy back then!

Rich Kid

rich kid

My grandmother enthusiastically encourage me in my new goal and steered me towards creating a target age for my new potentially elusive goal. So after some thinking, I decided on the target age of 25 years old. To me at that time, it was 4 to 5 times my current age, which naively seemed possible to me at my very early age. I was a little off guard when my grandmother chuckled a bit. I started to question my goal and thought that perhaps it’s not possible after all. My grandmother then tried to explain to me that 25 years old was too young to reach such a status. Instead she suggested an age range between 45 to 55 years old, and even then she said it would be hard but doable. Back then, those ages seemed way too old to me. I reluctantly agreed to her proposed age range with the 55-year-old target date being the limit. She has since passed away, but I still intend on keeping my millionaire promise!

Now with some real world experience under my belt, even the “55 years old max age” seems hard to reach, but a millionaire promise is a promise so now I better hop to it! The problem is with the path that I’m currently on is that it doesn’t seem likely that I’ll reach that elusive millionaire status even when I’m ready to retire at 67 years old. Time to rethink the path that I’m currently on. The path that I’m currently on is a good path and should enable me to reach the goal, but not soon enough.

So what can I do to meet my becoming a millionaire promise in the given age range?

  • Work both harder and longer at multiple sources, then investing the money earned so that it will grow passively and hopefully right quick!
  • Invest smarter.  With three brokerage accounts, I can experiment in each one to flush out the optimal investment strategies.
  • Save more money by purchasing more frugally. Instead of spending money eating out for breakfast and lunch, I should pack both (and I have done this in the past)!
  • Use credit card rewards more intelligently. I’ve done okay with my credit card rewards points, mostly buying house computers for the family, etc.
  • Think about finances more. The more you think about it, the more focused you are, and the more opportunities will be seen.
  • Buy Real Estate. If I borrow money for the purchase, in theory, this should be good debt and doesn’t hurt my current finances, at least if I can rent the property out.
  • Watch TV less, watching TV is a huge time and life waster in my option (except “Mad Money”). An occasional movie or maybe 1 or 2 shows a week is okay though.

Starting next month, if I really focus on the points above, I have a good chance of reaching my long ago promised goal of obtaining millionaire status.

We’ll see…

Don

Sacrifices Made On the Road To Become A Millionaire

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I hate the way President Obama (and other democratic presidents of the past) single out millionaires, especially when he says that the rich need to “pay their fair share, just like everybody else“.  Now as a financial blogger, I know that the statistics shows that over 40% of the population don’t pay taxes as is.  So perhaps President Obama want the rich to pay all the taxes?

 

But let’s peal back the layers on President Obama’s millionaire onion, shall we?

  1. From the monumental book called “The Millionaire Next Door“, we all learned that 80% of those that are rich did not become so because of inheritance.  So that means that the majority of those that are rich come from the good old middle class group.  Both Bill Gates and Warren Buffett are prime examples!  Both were from what I would consider the Upper Middle Class, but definitely still part of the middle class.
  2. Those that succeeded in becoming millionaires (the road is full of those that have tried and failed), still sacrificed both time and experiences to get where they are today.  The millionaires that I know of put in the typical 70 to 80 hours a week working on their business, for years and years!  Forgoing all the fun stuff that the rest of us middle class folks enjoy.  And now that they are older and even have less opportunities to enjoy life like only the young can do, we are going to suck their hard earned, long hour worked, money from them?  Like a parasite or a leech?  It just doesn’t seem very fair does it.
  3. These same millionaires enable the middle class folk like you and I to earn a living and raise our families.  We (the middle class) do so while going on nice vacations and enjoying life in ways that the majority of the rest of the world can only dream of.  The millionaires are the sharp end of the stick and without them, we are just beating again the wall going nowhere instead of breaking through it.
  4. They buy our city fireworks, give money to charity, help with special project (like stadiums), and benefit their communities in other ways, and the country in general.  The millionaires are movers and shakers, they are catalyst that make the world a much better place.
  5. Being a millionaire, or blazing the trail to be a future millionaire isn’t a thing that should be frowned upon!  We should all be encouraged to become millionaires.
  6. Millionaires create corporations which in turn pay taxes.  So already the business pays taxes, then the businesses pay out the wages to it’s millionaire owners/creators  who also pay taxes on the money that has already been taxes at the corporate level (this is called double taxation).

In conclusion, I think it’s wrong to attack the doers of society!  Those that stuck their necks out, took the risk and were luck enough to succeed.  Such millionaires hired the middle classes along the way, dragging the middle class into a more prosperous state while growing their business (many of which pay taxes in addition to the millionaire).

The long hours that millionaires work means that they miss out on a lot of family activities.  This means that they miss soccer games and other activities that their kids may do because of the hours they put into their business.  This may be the ultimate sacrifice made by entrepreneurs trying to become rich…

In conclusion, I think politicians and naive protesters tend to just look only at the checkbook balance of millionaires and they don’t take into consideration the sacrifices and hard work that those millionaires had to pay to get rich.

What is your opinion?

MR

 

P.S.  If you are wealth please email me your story.  Not only would I love to read about your experiences, I would also like to know about the positive ways you impact your community and benefit society as a whole.  If your story is noteworthy, I’ll post it on my site.  Of course, I’ll keep it anonymous…

How Much Money Is a Lot of Money?

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Money keeps outgrowing me

Money has changed meaning to me as I grow older…

Of course inflation has had an impact on the worth of money, but I even see my kids valuing money similarly to the way I did as a kid, so I think what I type still applies today!

When $20 was a lot of money!

I once found about ten $20 dollar bills stuffed up on top of the kitchen cabinet as a kid! I quite literally thought I found some hidden treasure from the previous owners of the house and that I was rich!  At that point (I was 6 or 7), and I had never seen that much money.

At such a young age I thought I was rich! Heck, I even wanted to keep it a secret from my parents! My morals got the best of me though, and I told my mom about my discovery. She actually scolded me, telling me that I shouldn’t be getting into things. During the scolding, she told me she hides money for rainy days, and if I find other such hidden money… to leave it be.

When $100 was a lot of money!

Flash forward a few years (to the time when I was 10), and you’ll find that I’m impressed by the “Benjamins” at this age! While I didn’t own $100, occasionally I’d see them as my grandmother would count money from my grandparent’s businesses. While I didn’t think a few hundred would make me rich, I was still in awe of them!

When $100,000 was a lot of money!

During the age when I was 11 or 12 years old, I was playing video-games with my neighborhood buddies in one of their basement’s downstairs living room.  Just out of the blue, I started thinking about how much money I would need to live life without working. As I did the calculations in my head, I finally figured that $100,000 at 10% interest should be all I need!

Of course, I had no idea that the $10,000 I would make from my investments would be less than the poverty level for a family of 4 in the US nor did I consider taxes…

When $1,000,000 was a lot of money!

Before reading “The Millionaire Next Door”, I use to think 1 million would be the amount I should strive to achieve. I figured that if I made 10% on that amount, I would receive $100,000 annually. I thought I would be very rich at that point. I was 17 years old at this point in time.

When $2,000,000 is a lot of money!

After reading “The Millionaire Next Door”, I realized that I should up my target goal to $2,000,000! I’m not sure if I’ll ever reach that point, but it seems to the best answer. You see, if I had $2,000,000 I’d only have to achieve a 5% return annually to have the income from my investment earn my $100,000 annually. This is still a great target, so far!

Now I think 5 million or more would be a lot of money!

Yes, now I realize that not only do I have to have money from my investment earnings to spend, but I would also need a part of it to invest back into investments, so the portfolio could keep up with inflation. I also realize the 5 million might not be enough, and 10 or 20 million may be a much better number!

I don’t think I’ll ever be able to get over 5 million though. It would be nice…

What do you think a lot of money is?

-MR

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The Secret Life Of The Joneses

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I always though my neighbor next door was a lot like my family.   I was wrong!

The Secret Life of the Joneses, Across The Street

Apparently, our neighbor across the street had a secret life that I was unaware of!  Over the years, I should have realized that they were wealthier than I thought from the clues that they revealed. 

Here are some of the clues:

  • Once at a party, the neighbor that I thought was like the Joneses , revealed to me that he refinanced his mortgage down to a 10 years loan!  I was impressed because I was paying extra on my mortgage too, and only had 5 years left.  But the way they spend their money, I assumed the were like the typical Joneses, meaning that they were buying things largely on credit.  But when I heard that my neighbor bought a 10 year mortgage, that should have set off some flags.
  • Their son (7 years old at the time) once told my son that he wants his dad to buy our house too (because of my son’s toys).  I always wondered what he meant by that, but I just dismissed it as kid talk
  • Three years ago, they both bought 2 new cars at the same time.
  • I’ve seen both the neighbor and his wife out on the port scanning the newspaper ads section like it was made of candy.  I guessed that they were looking for houses to buy for rental property.
  • Once at another party, the neighbor mentioned that he created and sold wine on the side.  He claimed that it was mostly a hobby, but he did have a real label and sold the wine at stores.
  • I noticed that the my old neighbor also was very handy around the house!  He even replaced his entire front door insert by himself.  Somehow he must have learned how to do construction work!  Most likely from houses that he owned as rental property?

So I learned that sometimes those who spend like the Joneses next door, are really just wealthier than you realize because of side jobs and real estate!

Have you ever had a rich neighbor, that you didn’t know were rich until much later, or after they moved like mine? 

-MR