You want to be a millionaire?

[Jmax]

If I had a buck for every time I have heard people say they cannot afford to do investments I would be a millionaire on that alone. I get into an argument with my son on this issue too. Folks, let me tell you. If you put $3.00, YES!, I said $3.00 a day into a solid investment starting in your 20s you will be a millionaire at age 62. emoGeezer Think about it like this, that is two sodas from a vending machine, one burger from a burger place, one coffee from Starbucks, ex...per day. Drink some freaking water and invest that $3.00! Don't tell me you have a car payment, a student loan, a rent payment,...I am not worried about that. We all have bills. It is the little money that you can save and over time with compounding you will have a good retirement. It adds up but you have to start early. I remember when I use to tell my friends this when I was in my 20s. They gave me a deer in the head lights look like I was some kind of nut. Now 38 years later they are telling me they sure wished they had listened. I got one buddy who use to smoke, drink and live a night life that was pretty wild, just wasted money all the time. He often told me he could not afford to do investments. emoDoh One six pack, one pack of cigarettes, one night out saved would have done it. He is now 60 and he told me the other day he was going to have to work till he died. WELL....DUH!!!! What the hell have I been telling him for 37 years!!!

I was not perfect at this either. I will tell on myself. It was 1981, my first year out of college and my first full year with Wal-Mart. I got my first bonus check, it was $3,000.00 bucks. Back then that was a lot of money. I knew enough to know I should invest it in Wal-Mart stock. But there was this one bass boat used, emoBigsmile , it was a Tidecraft V15 Spitfire, with a 65 HP Johnson on the back. Had all the bells and whistles for the time and I had talked with the guy who owned it. He told me he would sell it to me for 3 grand. emoRolleyes Mmmm...Wal-Mart stock or a bass boat? I went with the bass boat. emoBooHoo If you were to do the math from that time until I retired from Wal-Mart that $3,000 in stock would have compounded and spit to over 3 MILLION dollars!!! I tell people often my first bass boat cost me 3 million bucks. emoCrazy

I have tried to get folks to start retirements accounts early. I do this knowing how the government is slowly taking away our SS amounts and reducing our retirement benefits. Now days politicians often call that entitlements! emoHoppingmad When you pay into something all your life and are told when you retire you will be able to use that to retire on and get it back, THAT IS NOT A ENTITLEMENT!!!! emoMad However the government has taken that and made it their piggy bank. I am not sure where that is all going to go. I think eventually the age to draw it will be so high most will hive died before they qualify to get it.

I will step down off my soap box now. You need to start your retirement account either through your work if you are lucky enough to have that or through a investment person that you can set up to pay into. If nothing else, the next time you get a raise assuming you have a job, take that raise, ignore it and invest it into a IRA or 401K like it never happened.

emoGeezer Jmax

 

[lafae7]

I thought about this many times, but it is easier said than done.... Hear me out. In 2008 my parents lost 30k in seconds when the recession hit... And in 2012 when it hit again more money was lost. Their money was in an IRA. My advice would be that yes IRAs and 401Ks are good but to a point. I personally have a 401k and like it. However, I realize we live in an age were someone who sits behind a computer will take every dime you have because of "fine print". My advice is to just put the money in a bank account and call it SAVINGS. Good advice though. It's best to continually put money back no matter how small.

 

[elwestb]

Very good sound, advice Jmax! I totally agree with you. I by no means a financial adviser but For years I have been trying to tell younger people especially to get involved with a 401k plan and stay with it! Pay into it like a bill. Do not touch it and watch it grow. We all are guilty of spending and wasting money that we just don't think about. I'm not saying everyone should live like a miser either but we are all wasteful. I got into a profit and sharing plan back in the mid '70's that later on turned into a what is now the 401k plans. I now have one currently at my work place and another one that is a self directed account. I have made money and lost money through the years riding the stock market. That's is just the nature of the beast I suppose. But all told it has been very good to me. I remember a quote from Warren Buffett. He said that compound interest is the 8th Wonder of the World! Plan ahead people!

 

[Jmax]

NO!!!! emoBang Your comment is right to a point. In 2008 and 2012 the only people who actually lost money was the folks who sold it when it was low and then bought it back after it had gone back up. Most folks who just set on it and waited for the market to rebound and correct itself came out alright. It took me just under two years to recoup what I had lost. I never sold it, scared the heck out of me but it finally came back up. Now a few folks made a ton of money off those swings. If you sold before it dropped, then bought it back after it dropped and before it rebounded you could have just about doubled your money. That was doubling your money in two years, from 2008 drop to about 2010 rebound. If you invest in solid stocks and just hang on to them you will have very little risk. I like mutual funds. That way you invest in several stocks within each mutual fund and each fund is set up to usually shadow a particular market.

A bank account, even a saving account will only loose you buying power on the money you put there. A savings account does not even pay 1% now days in interest. The inflation rate runs 2% to 3% a year. That means for every year you have your money tied up it is worth less then when you put it in there. You need to get an annual return of at least a 3% plus average per year to actually make buying power and money. No bank will give you that now with interest rates so low. The ironic thing about it is they are in turn taking your money and investing it for themselves and make money off your money. emoDoh I have not owned a saving account in over 25 years. I have a money market account set up with one of my brokers where I can if need be hold money in between buying and selling stocks and funds. Get you a good solid name brand broker with a company with a sound history that has been around a while. Their job is to walk you through what we are talking about right now. I do have a checking account with a bank, it is good to have to pay your everyday bills with. I just do not keep extra cash in it.

 

[buzz]

My dad, gone now, but born in 1925, had to quit work in the 8th grade, to help support the family, as I am sure many did. He had 7 brothers and sisters. Anyway, he always told me, if you cannot save 1/2 of your payday.....you will never be debt free. Gosh, wish I had paid better attention.

 

[spnplgr]

In the short term, getting yourself debt free is as important as starting a long term investment strategy. But for the long haul, the magic of compounding is the key to successful investing.

 

[Jmax]

spnplgr - 8/29/2016 12:26 AM

In the short term, getting yourself debt free is as important as starting a long term investment strategy. But for the long haul, the magic of compounding is the key to successful investing.

100% correct on that one. emoThumbsup Getting high debt out of your life can position yourself for having a retirement program. The high debt is what you need to worry about. Low debt such as a home with a less then 3% interest can actually be a good thing if your investments make more then your home's interest and you can use it as a tax write off on your mortgage interest. Credit cards are a killer on young people. The companies that issue them are like predators on young people. They send out letters that you are "Pre-qualified" for their credit card! They have no idea other then they want that youth to use the card and get in debt to them. emoBang High interest and not much money coming in, the youth turn to mom and dad. emoDoh Cut those suckers up!!!! emoGeezer Jmax

 

[Smalliefan2]

My two cents:
First, my dad told me to start saving for retirement the day I started work. He did, and with his pension, social security and dividends, made twice his salary when working.
I did not start that soon, but I invested, put everything on dividend reinvest, stayed with good companies through all the up's and downs, and am in pretty good shape. I won't starve, and I can gas up the boat.
Remember, the stock market has gone up two days, for every one down. Just it happens in years cycles. We recovered from the 70's, crash of '87, internet crash, '91, 2008 and 2015. Don't overreact to bad days, there is always a recovery.
You just need to do what J max suggested, skip a soda or a Starbucks ( though that is in my portfolio ) and put the money to work for yourself.