I Will Teach You To Be Rich In 10 Minutes
How's that for a claim! Surely I'm out to sell you some scammy get-rich-quick scheme right?
Well actually, I'm not here to sell you anything at all. What I want to do is discuss with you the tremendous opportunity you have with investing.
You could read all of the investing books in the world (I have), but if you take what I'm saying to heart, I will teach you to be rich in just 10 short minutes using an almost guaranteed investment plan.
There is only one caveat, and that is...
The younger you are, the more opportunity you have. If you're in your 40-50's, sure you could still have an extra $400-800K when you retire, but you most likely won't be in the millions.
If you're younger, you have a great opportunity to become a multi-millionaire in your retirement years. Here's how...
How To Retire Wealthy
If you take a look at the 100 year history of the stock market, there isn't a 10 year stretch where it didn't go up! Every 10 years, the stock market as a whole has shown at least some improvement.
To invest in the entire stock market, you can invest in something called index funds. Index funds invest a very small bit in each of the several hundred (or thousand) stocks, depending on what particular index fund you choose.
Now, investing in an index fund is a great idea, but you have to watch out for one very important thing...
Taxes!
You want to do all of this investing from within a retirement account so you have some important tax advantages. If your company at work has what is called a 401K plan, and they have "company match" (just ask them), you should probably invest in that.
Now, your 401K plan might not have the option of investing in an index fund. If that's the case, you'll want to ask an advisor what would be the best thing to invest in.
If your company doesn't have a 401K plan with a company match, you are going to want to invest in a Roth IRA. With a Roth IRA, when you are 59 1/2 years old, you can take all of your money out tax-free!
By far the best place to get a Roth IRA is at Vanguard. Their fees are so much lower than anywhere else it's scary!
When you sign up with them for a Roth IRA, you have to choose what index fund to invest in. The VTSMX is a great choice. This index fund basically invests in all of the stocks in the USA.
If you want something a little safer, choose the VFIFX. This invests in the US, as well as European Stock, Pacific Stock, and Emerging markets. As well bonds. It's a smart little fund that adjusts as you get older.
You really don't need to know much about all of this, if you just invest in it, you'll be very happy! :-)
How happy will you be? I did a report using Dave Ramsey's investing calculator and here is what it came up with...
With the history of the US stock market, it has went up on average somewhere around 9.2% (I've actually heard this is higher but we'll stay converative). In the chart, I'm assuming we will invest $5,000 a year.
If that seems like a lot, just think, if you and your spouse earn at least $50,000 a year combined, that is only 10% of your income. You must get in the habit of saving 10% of what you earn if you really want to become rich. It's really not that hard to live off of the other 90% once you get used to it.
OK, let's take a closer look at the numbers towards the end, depending on how many years you invest...
As you can see, at this rate, you'll become a millionaire in year 32. So if you start investing at age 28, you'll be a millionaire at age 60. And if you invested that in a Roth IRA, it's all tax free.
But let's say you didn't go hog wild and go on a huge shopping spree the moment you retired. As you'll see above, the numbers really start to escalate fast in those final years. If you let things accumulate for 8 more years, you would have over $2 million!
With the advances in medicine, people are living to be much older. So don't feel bad that these numbers may take into effect when your 65-70. You'll still have a lot of living to do by then!
This easy plan is your guaranteed millions. And it has nothing to do with the other 90% of the earnings you've accumulated. Hopefully you've done something wise with your extra cash. And at the very least, you'll also have some Social Security left.
Following this plan is simple. The easiest possible steps...
1) Open a Roth IRA at Vanguard
2) Invest 10-15% of everything you earn into the VTSMX (agressive) or VFIFX (more conservative)
That's it. Ride the course throughout your lifetime. Set up automatic investing to make sure that you actually do it!
If the next 40 years are anything like the last 100 years in the stock market, you'll have the comfort of knowing you are one of the rare few millionaires on the planet!
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