I couldn’t disagree more. The concept of systematic saving and hoping for a solid average return in the markets isn’t something that I believe in anymore. I’m 32, and have been investing in the markets since I was 18, under the assumption that if I set up automatic contributions throughout my life I would ultimately be “rich”. I started by maxing out my SEP-IRA and then by maxing my Roth. I invest monthly in a range of products, again, all with the goal of cost averaging the market to my benefit over time. Fast forward 14 years from when I began, and I have accumulated less than $60k. My invested dollar amount exceeds my current total, as it did even at the recent market highs in 2007. In other words, investing for the long haul doesn’t work like it used to, particularly for my generation. The first decade of wage earning is the most important in terms of compounding interest, and we have just experienced a completely lost decade. The hopes for recovery to make up for that lost decade (14 yrs in my case) do not appear reasonable. David
This is my update, it’s been a couple years and I feel now is a good time for one! After my wife and I turned 30 in July I have been thinking about updating our story. We continue to prosper at what we do and have been pretty frugal since when we first posted. I finally got a raise and a promotion , which is just the start of our good luck. About two years ago we purchased land back home in PA even though we still have time left in Boston. We got an amazing deal on 2.2 acres on a golf course that now appraises for $350,000. Since the last time we spoke we have paid down debt,we have paid off both cars, my wife’s medical loans and under grad degree, also purchased about $25,000 in gold and silver. We have about $55,000 in equity in our condo in Boston and together we now have over $95,000 in 401k and Roth accts. We are working extra hard at paying down the land loan so that we will have enough equity to build a 1.5 million dollar house ($300,000) needed or 20%. We also just signed with a private practice which is going to pay my wife and I a $50,000 signing bonus and over $250,000 before taxes a year, starting in 2014. We make about $175,000 a year combined now but once my wife becomes partners at this practice she is expected to make over $750,000. So we are very lucky and well on our way! We our currently half way away to a million. Our plan is to become millionaires before we turn 35. Can we do it? Thank u Ryan for your advice. Work hard, it doesn’t matter what you make… It matters what you are able to save!
Most millionaires know that it takes money to make money. Millionaires understand the power of compound interest. The study out how to make wise investments. Whether it’s taking good care of themselves so that they aren’t spending money on health care later, investing in a good education (not necessarily college, though), starting a business, or finding solid stocks to buy, millionaires study out what is likely to bring them a return. They make solid investments after considering the options.
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Folks, don’t confuse simple with easy. The principle of ‘spend less than you earn’ is indeed simple. But, like many other things, it isn’t easy; our current media inundation with advertising which begs, cajoles, pleads, ridicules, and browbeats us to spend, spend, spend makes it especially difficult to exercise the self-discipline required to abide by the principle.
Blogging is something that requires patience, persistence and discipline. It may mean writing everyday for over a year before you really start to see any money from it. There are exceptions to the rule, but from my dealings with other bloggers, it seems to be pretty common to spend one or even two years building your blog, your brand and your authority, before making any serious amount of money.