Will investing really make you rich? How do you know what to invest in to become rich?
Posted by admin in Finance Wednesday, 19 October 2011 16:50 4 Comments
I’ve heard that people do become quite rich from investing. How do you know exactly what to invest in, in order to become rich, and how long does it actually take for investments to make you rich? I’m 40-years-old, and would love to be rich while I’m still in my 40s, instead of waiting til I’m 60 or 70.
Yes and no.
Yes for the people with insight, skill, access, and money. No, to everyone else.
As a practical matter, you must save like a mad dog to build a nest egg and learn both your particular skill (if you have one) in the market place and the rules of the game. 40 is about the age when the typical “average man on the street” puts it all together, if he is going to…but, once again, I am assuming you have what it takes.
At the same time, there is something to be said for both the argument about getting rich slowly and that rich is what rich does.
(a) You need a nest egg…at least $100,000…to start investing for wealth. Unless you have a rich aunt who is also very sick, such a nest egg isn’t going to arrive without serious effort on your part. To make investing your career, you need more…a lot more. $1 million is a good start.
(b) As a practical matter, I’ll leave the platitudes about “feeling rich” to others, but there is a difference between rich and really rich. I am a millionaire, but it is because I DON’T spend my money…I have continuously invested huge amounts of it. My lifestyle would not be possible for most people (they would have spent all the money rather than investing it) nor would it make many people happy. I do not have, nor will I ever have, enough money to do whatever I want. That is the definition of “really rich” and that is out of the hands of 99.9% of the population. (Timing & luck & talent that you cannot control)
Constant investing over a long period of time is the best. I started when Jimmy Carter was president and I’m still going. (I’m a lot older than my avatar would indicate.)
1) Find a number of low-cost mutual funds. In this recession, income-producing funds that invest in stocks that pay good dividends is a good choice like Franklin’s Income Fund NYSE symbol FKINX. Maybe find some reliable bond funds as well for a balance.
2) Keep a good reserve in cash to take advantage of when the market drops and you can buy more shares at a lower cost. (Known as dollar cost averaging)
You may find this blog interesting http://einben.blogspot.com
I don’t know if it’ll make you rich, but my money is currently in a fund that will likely make 12% to 15% on the year. It’s the most reliable fund I’ve come across, and I did my research. Depending on how much you’re looking to invest, that could equate to a tidy sum in a few years.
I could have someone contact you, if you’d like. I would explain it to you, but I’m not entirely sure how it works. All I know is it has to do with trading futures, using the S&P and Nasdaq, and it’s not contingent on which direction the market is moving.
Good luck!