“Get Rich Quick” – How to manage your money effectively
One of the important points I took away from an excellent book Millionaire Fastlane is that if your life savings are small (less than $1million), don’t try to get rich in stocks or by investing it. It is going to take you a long time to get rich that way and you might not see the results of it if planned ‘richness’ is 40 years away.
Rich people use stocks, bonds, commodities and real estate to diversify and to preserve their wealth, not to get rich with it. Why do people who have $10,000 or $100,000 put it in a stock market? To get an average annual return of 8%? During a period of a few years it can be negative % return in the stock market depending on market trend. Get rich first then diversify. Compound interest works when the initial capital is big.
If you have $5,000,000 in the bank, 5% annual interest is $250,000 – you can live very comfortably on this amount. When you have $50,000 in the bank, 5% annual interest is $2,500. See the difference?
The phrase “Get Rich Quick” has become a synonym for a scam, swindle or a false promise. For most people these days this phrase carries a negative meaning. It got beaten to death by a lot of peddlers and snake oil salesman selling seminars, courses and what not. They are getting rich by selling you those easy promises: for only $99 buy this five book and twenty DVD course and be on your way to riches!
If one could get rich by paying $99 and spending ten hours of one’s time reading and watching a seminar, everybody would be rich! These types of courses and seminars make fortunes for the people who sell them because a promise of easy reaches always works. Our lazy nature wants to believe that we can get rich by reading a book, taking a course or seminar.
“Get Rich Quick” should mean five to ten years of dedicated work building your own business. On a big scale of things ten years to being rich and retired sounds a lot better than penny pinching for forty years.
On how to start and build your business, the best roadmap to date is a book The Millionaire Fastlane by MJ DeMarco. It is under $15 and money well spent in my opinion.
