Last weekend my wife and I sat down and added up our net worth. We are somewhere between $950,000 and $980,000 depending on how it’s calculated. This is isn’t too bad for a couple in their 30s. When I think about the things we’ve done to get to where we are, a few points come to mind.
1. Learn to invest: A lot of wealthy people get that way by investing. Learning the basics of the stock and real estate markets can really help you get ahead. It also helps you maximize your returns and take advantage of opportunities as they come your way. There are tons of great resources on the web – Kiplinger’s Personal Finance and Investopedia are two excellent free resources.
2. Listen to and associate with successful people: There is a ton of social psychological research on this point but the main idea clear. People who are interested in making money tend to associate with one another and tend to have viewpoints conducive to making money. So if your aim is getting ahead financially, spend time with people who are financially successful.
3. Take calculated risks: It’s very, very hard to attain real wealth (like more than 5 million) if you are investing only in low-risk low return assets. Bonds are great for seniors, but they generally don’t do as well as stocks. Federal debt (t-bills, savings bonds, etc.) are super safe, but their yields after inflation are dismal. The bottom line is that you can’t really do well financially unless you are willing to take calculated risks. The math just doesn’t add up.
4. Put good things into your mind: Millionaires tend to spend a lot of time reading for education. So if you want to get ahead, you probably should read the personal finance canon. Books like The Intelligent Investor
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James Hendrickson
James Hendrickson is an internet entrepreneur, blogging junky, hunter and personal finance geek. When he’s not lurking in coffee shops in Portland, Oregon, you’ll find him in the Pacific Northwest’s great outdoors. James has a masters degree in Sociology from the University of Maryland at College Park and a Bachelors degree on Sociology from Earlham College. He loves individual stocks, bonds and precious metals.
Really good position for the 2 of you. Since investments are not yet something that safe in my country, I’d have to retain the second advice: associate with successful people. And it’s so true. You have a lot to learn and they do get you inspired.
Thanks Dojo – all you need to do is invest smartly over time. If markets are unstable in your country, you can always consider starting a successful business. People often need basic things like housing, clothes, food, shoes, etc.
Wow! That’s great! We’re working on building up our investments, and this is definitely a great reminder it’s worth it!
Thanks for sharing. We have a lot of money invested in real estate and retirement. Our net worth isn’t quite there, yet, but we are always increasing.
Found you through Frugal Fridays!