Who Wants to Be A Millionaire?
A Proven Method For Becoming A Millionaire!
By Jay Arthur
For every $100 you earn...
STEP 1: Invest like you're going to live forever:
Pretax: 401k, IRA, Keogh. After tax: Roth IRA, taxable. Consider quality mutual funds instead of banks. Over time, the stock market outperforms banks.
If you are in your 20s, save $10 out of every $100, If you are in your 30s, save $20 out of every $100, because you have less time for it to grow. If you are in your 40s, save $30 out of every $100, if you can't start with $10, start with $5, $2, or $1, but get started. Everytime you get a raise, increase the amount you invest by some portion of the raise.
STEP 2: Pay off debt
Higher Interest First! Pay an extra $10 out of every $100 you earn. Credit cards, then car, then house. An extra $100/month will shave 15 years off a 30 year mortgage and save $100,000 in interest.
STEP 3: Live off what is left ($80)
Pay monthly bills and expenses Electric, gas, food, etc.
THEN, spend like you are going to die tomorrow. Otherwise, there will always be more month left at the end of your money.
STEP 4: Be patient.
Depending on how much you invest and the return you get, you'll be a millionaire in 10-20 years. You'll be a decade or two older, but you'll be wealthy. Get going!
STEP 5: Fund Your Children's Future
Children have the most precious commodity in this equation: time, but not much money. If you fund their IRA with just $6,000 by age 20, they will be millionaires at age 65. If they have an income of $2,000 per year, then fund a Roth IRA. There is no tax on withdrawls from a Roth IRA. So the money grows and grows and your kids will never pay a cent in taxes on the money (unless Congress changes the laws again.) This is a sweet deal. You pay tax on $6,000 and they pay nothing on the millions they take out later.
Books to read:
The Richest Man In Babylon
The Wealthy Barber
The Millionaire Next Door