Everyone in their 20s wants to be rich (note: we’re defining “rich” as $1M+, Felix Dennis will disagree). Ask any male who is in the 20-29 year old age bracket and you’ll find becoming rich is the number one goal in their life 9/10 times. The reason why they won’t get rich is simply because they lack patience and believe they are smart. Here is the trick to becoming a millionaire by 30 (+/- a couple years for safety).
“Spend 12-16 hours of every single day making money and dollar cost average into VOO (ticker)”
1) Make Money 12+hrs a Day: If you really spend 12-14 hours a day making money you’re going to be hard pressed to burn it aren’t you? Your savings rate will increase dramatically by default.We don’t do many posts on becoming frugal because it is a scarcity mindset where you are thinking in terms of cutting costs (saving $100 a month, really?) rather than making money (if you make $100 you didn’t spend $100 during that time frame). In short, even with the demographic that reads this blog, 99% of people will not be able to earn money for 12 hours a day for 5-7 years. This is not a knock on anyone reading the post, it is simply the truth. They will get “tired” they will “need to blow off some steam”, in short, they will need to spend their money to maintain their happiness levels. They’ve already lost.
2) Don’t Predict the Market: Everyone thinks they are smart. Once you realize this, you stop trying to predict the entire global economy and simply dollar cost average. You will *generally* see 5-9% returns over the long run (nothing is guaranteed), but in simple terms “are things going to become more expensive?” if you answer yes (you should answer yes based on 100+ years of history) then all you need to do is buy inflating assets (stocks).
Until you no longer have to work for a living, you cannot break either of these two rules. If you are Financially Independent (FI as the nerds like to call it) then you can dabble in higher risk items. The end.
In 100% honesty it is taking the will of a thousand marine soldiers to avoid clicking “publish” after the end of the previous paragraph. Why? It really is that simple.Instead of clicking publish lets go ahead and look at all the foolish people who will try and break these rules. No apologies if you’re in this camp because you’re going to pay the price of losing money which would be much worse than accepting the two strategies above.
Market Timing: Any seminar that explains how you can time entry points into stocks, bonds, houses, options, foreign exchange, derivatives, or otherwise are all the same. Get rich quick schemes to steal money. By reading the previous two sentences you’ve eliminated 95% of the marketing gags on the internet. There is no system, no person and no calculation that can predict price movements in advance. Period.
“But so and so has done it 20 times in a row!”
Great. Go up to this Oracle and ask him “Can you show me all of your transaction records for the last 5 years”. Anyone can show 20 clean breaks and no one will hand you their information. Move on.
Finally, how can you be certain? So sure no one can predict market timing?
Easy. The value of knowing market timing for certain is north of $10 Trillion dollars. That is not an exaggeration. If you can predict the timing of any market, on a daily, weekly or even monthly basis… The first thing you do is shut your mouth. You quit your job and you hide in a tax free jurisdiction to trade an account. You borrow at any rate imaginable (10%+? who cares! give me the debt!) Why? If you can predict the turn of a security in that short of a time duration you’re going to make 10x the return immediately on an option (Puts or calls). In fact if you know a single security is going to move by 10%+ within a day, you should quit everything you’re doing lever up, and go all in. If it’s really that easy you’re rich by the end of the day, not month, not even a year.
You’re certainly not teaching seminars. You’re in hiding to protect your algorithm and backside. Don’t skip on the high end body guards.
Work Life Balance Personalities: These people never get rich. This breaks rule number one where you believe that you’re entitled to $500K+ a year without working more than 40+ hours a week (Gotta be able to make happy hour!). In addition? The fact that the person believes his career isn’t fun and is “hard work” tells you he won’t be any good at it in the first place.
If you decide to take the work life balance approach you should get a job at a start up. Why? You’re putting your fate in the hands of luck and this is the only space where you will have a shot at event driven income without putting in the time. Blind luck!
If it works? Great and more power to you, just don’t become delusional and believe you can earn a high income without the aspect of luck and a mediocre 40 hour a week work ethic.
The Rich Think Alike: If you don’t believe that rich people think alike, and would largely agree with the two premises listed above… You need new friends. Why? They are broke.
The odd thing about life is that the law of attraction does work when it comes to money. If you find one man who made it to a million dollars by 30ish, you’re going to find a startling fact… In his phone is the phone number of every other student in his class who cleared $1M+ in net worth by the same age. To get rich you’re going to operate like a rich person, which means your friends are going to be rich as well. Simple as that.
Unable to Earn: The classic lazy person. They will claim that their only source of income is their job/career. Unwilling to reinvest in themselves and find skills that will pay immediately they try to squeeze pennies out of a flat-lining income stream. Similar to your friends who are unwilling to work over 40 hours a week and dollar cost average… You need new friends again.
Before the comments become filled with “bragging” type complaints here is a short list of skills you can learn that will pay immediately if you simply put in the time (you can even do some of these at work when your boss is not looking)
1) Copy writing (can be done in an office)
2) Affiliate Marketing (can be done in an office)
3) Fix electronic devices (if you’re slick you can do this at work as well – eventually hire outsource)
4) Paid for services on Fiver/task rabbit (eventually outsource).
These tasks can be completed off the clock with ease.
Pretty simple, lets assume you only make $20 an hour? If you add 20 hours a week times 52 weeks a year… that’s $400*52 = $21K in cash savings.
Guess what? If any of the above take off, they are scalable. You can simply spend more ad dollars and scale your marketing business or you can change your rates to higher end consumers etc. You’re building another stream of income. It’s not passive income yet, but the $21K sitting in stocks/bonds certainly is.
Avoiding Bad Information: Lets assume you believe this entire post, entire blog and entire opinion is BS. That is fine. In that case make your life a million times easier by using simple logic.
“Is this person actually rich and happy?”
This logic makes complete sense. If the person has what you want, listen to them. If they don’t have what you want, they should be ignored. You’re going to meet many people who are older and supposedly wiser than you are (if you’re 30 this is the 40+ gang, if you’re 20 this is the 30+ gang) but don’t take what they have to say at face value. Do your research. Is this person rich? Did he succeed? If not his advice should go directly into the trash. Smile and nod. Smile and nod.
As a signing off point, this was a painful post to write. It was not meant to come off as demeaning angry or unhappy yet if you read the post it still does.
Why is that? It is depressingly true. The only way to get rich (relatively rich!) is to GRIND.
Look around you. Anyone who is 18-20 years old can simply read this post act on it and become financially independent within a decade!!!!!
Yet… 99% of people won’t do it. Lets repeat that… 99% of people won’t do it.
Hopefully for every 100 people who read this post at least two people will get the message. This would double the number of rich people!
Now That You Know The Two Rules… For those that are serious about developing multiple streams of income and a high net worth, we can recommend Personal Capital. The Company offers *free* software tools with the following four key features: 1) ability to avoid losing money by tracking all fees associated with an investment product allowing you to choose the best possible fund for your future, 2) portfolio analysis where your risk profile is stacked up against your current age and retirement goals, 3) in addition to these free tools, you can also track your net worth and path to becoming a millionaire and 4) when you hit $100K in networth you’ll receive a free one time consultation with an investment professional at Personal Capital. After linking up all of your accounts you’ll be able to sit back and watch as your net worth goes up and your fees remain minimal over the next several years. We strongly believe that Personal Capital is the premier personal finance software tool when compared to its competitors such as Mint. If you’re looking to avoid personal financial collapse, it makes sense to track everything in one place for *free*.