Who DOESN'T want to be a millionaire?

Getting a Millionaire's Mindset
by Glenn Curtis
Tuesday, August 26, 2008
provided by


Let's face it; we all don't make millions of dollars a year, and the odds are that most of us won't receive a large windfall inheritance either. However, that doesn't mean that we can't build sizeable wealth — it'll just take some time. If you're young, time is on your side and retiring a millionaire is achievable. Read on for some tips on how to increase your savings and work toward this goal.

Stop Senseless Spending

Unfortunately, people have a habit of spending their hard-earned cash on goods and services that they don't need. Even relatively small expenses, such as indulging in a gourmet coffee from a premium coffee shop every morning, can really add up — and decrease the amount of money you can save. Larger expenses on luxury items also prevent many people from putting money into savings each month.

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That said, it's important to realize that it's usually not just one item or one habit that must be cut out in order to accumulate sizable wealth (although it may be). Usually, in order to become wealthy one must adopt a disciplined lifestyle and budget. This means that people who are looking to build their nest eggs need to make sacrifices somewhere — this may mean eating out less frequently, using public transportation to get to work and/or cutting back on extra, unnecessary expenses.

This doesn't mean that you shouldn't go out and have fun, but you should try to do things in moderation — and set a budget if you hope to save money. Fortunately, particularly if you start saving young, saving up a sizeable nest egg only requires a few minor (and relatively painless) adjustments to your spending habits.

Fund Retirement Plans ASAP

When individuals earn money, their first responsibility is to pay current expenses such as the rent or mortgage expenses, food and other necessities. Once these expenses have been covered, the next step should be to fund a retirement plan or some other tax-advantaged vehicle.

Unfortunately, retirement planning is an afterthought for many young people. Here's why it shouldn't be: funding a 401(k) and/or a IRA early on in life means you can contribute less money overall and actually end up with significantly more in the end than someone who put in much more money but started later.

How much difference will funding a vehicle such as a Roth IRA early on in life make?

If you're 23 years old and deposit $3,000 per year (that's only $250 each month!) in a Roth IRA earning an 8% average annual return, you will have saved $985,749 by the time you are 65 years old due to the power of compounding. If you make a few extra contributions, it's clear that a $1 million goal is well within reach. Also keep in mind that this is mostly interest — your $3,000 contributions only add up to $126,000.

Now, suppose that you wait an additional 10 years to start contributing. You have a better job and you know you've lost some time, so you contribute $5,000 per year. You get the same 8% return and you aim to retire at 65. When you reach age 65, you will have saved $724,753. That's still a sizeable fund, but you had to contribute $160,000 just to get there — and it's nowhere near the $985,749 you could've had for paying much less.

Improve Tax Awareness

Sometimes, individuals think that doing their own taxes will save them money. In some cases, they might be right. However, in other cases it may actually end up costing them money because they fail to take advantage of the many deductions available to them.

Try to become more educated as far as what types of items are deductible. You should also understand when it makes sense to move away from the standard deduction and start itemizing your return.

However, if you're not willing or able to become very well educated filing your own income tax, it may actually pay to hire some help, particularly if you are self employed, own a business or have other circumstances that complicate your tax return.

Renting Versus Buying

At some point in our lives, many of us rent a home or an apartment because we cannot afford to purchase a home, or because we aren't sure where we want to live for the longer term. And that's fine. However, renting is often not a good long-term investment because buying a home is a good way to build equity.

Unless you intend to move in a short period of time, it generally makes sense to consider putting a down payment on a home. (At least you would likely build up some equity over time and the foundation for a nest egg.)

Buying Expensive Cars

There's nothing wrong with purchasing a luxury vehicle. However, individuals who spend an inordinate amount of their incomes on a vehicle are doing themselves a disservice — especially since this asset depreciates in value so rapidly.

How rapidly does a car depreciate?

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Obviously, this depends on the make, model, year and demand for the vehicle, but a general rule is that a new car loses 15-20% of its value per year. So, a two-year old car will be worth 80-85% of its purchase price; a three-year old car will be worth 80-85% of its two-year-old value.

In short, especially when you are young, consider buying something practical and dependable that has low monthly payments — or that you can pay for in cash. In the long run, this will mean you'll have more money to put toward your savings — an asset that will appreciate, rather than depreciate like your car.

Don't Sell Yourself Short

Some individuals are extremely loyal to their employers and will stay with them for years without seeing their incomes take a jump. This can be a mistake, as increasing your income is an excellent way to boost your rate of saving.

Always keep your eye out for other opportunities and try not to sell yourself short. Work hard and find an employer who will compensate you for your work ethic, skills and experience.

Bottom Line

You don't have to win the lottery to see seven figures in your bank account. For most people, the only way to achieve this is to save it. You don't have to live like a pauper to build an adequate nest egg and retire comfortably. If you start early, spend wisely and save diligently, your million-dollar dreams are well within reach.

Ugh.. I have no idea why I'm doing this this early in the morning. I usually don't like technology like this this early. My brain is usually in a fog. Ex: I tried to sign into my blog with the last four digits of my S.S. number. That's what I use to sign into my online class. I had to get Husband up for work and I ended up not being able to get back to sleep. My brain suddenly started yelling at me about all sorts of differant things. Things that bug me for the most part.

For example, I took my 1st Business test of the semester yesterday. I got a B!!!! <-- those are NOT happy exclamation points! Those are angry ones! A frickin' B?! Most would say "oh my god, that's so great.." blah blah blah.. Not I says the frog. I'm angry with myself. Coming out of a class where I aced every test of the whole semester into getting a B.. So, I started mega outlining the next chapter and highlighting up my book like it's a frickin' christmas tree.. What christmas trees have to do with highlighters or classes, I don't know. but I also don't care.

side bar: I just noticed on my weather channel on my desktop that the temperature just dropped from 50 degrees to 48 degrees. Isn't it supposed to warm up as the day gets going?

Anywho... I don't think I want to bitch anymore.. I think I'm going to partake in a late Thankful Thursday that my sister does...


I'm absolutly thankful for my Mommy. She has been through so much in her life and has taught me so much. We tend to not get a long as much when we are living under the same roof but otherwise she's one of my best friends. She recently found out that she does NOT need chemo for the breast cancer she had and I'm thankful for that as well. She's doing good and I'm very proud of her and the positive attitude she kept through the whole thing.

I'm thankful for books. Without them I wouldn't be able to go on half the adventures that I do.

I'm thankful for indoor plumbing.. because when I was little and I tried to pee outside I peed all over myself.

I'm thankful for my children. They are the most wonderful beings in the world and they absolutly saved my life.

I'm thankful for many more things but I think I need to go see if my number 2 is awake and wants to be fed.

Morning.. Well, Kind Of..

Today has been busy so far. I've got laundry done, the kitchen cleaned up (kind of), got together all things witchy that I have so far that were scattered around (all spells I've written and tips and tricks) and put them in one place. Well, except for links to my supply closets.. so to speak. Started a food diary, again.. I came down to the basement to get the vacuum and figured I'd stop for a few and make a small update. I think later I'm going to post my most favorite chant for getting through a particularly scatter brained day. I wrote it a few years back and I've used it many times and it works wonderfully. Anyone who reads this can feel free to use it if they wish but do keep in mind that all spells work better when you write them yourself! =)

I've been so obsessed with Nirvana lately. I have only one of their c.d's that I got in like '98 but I have no idea where it is. We've lost a few c.ds over time. I also have to order off Overstock the thing that fixes scratched c.ds. Almost all of ours are scratched.

I also have to take my 1st Intro to Business test today. I feel like I have a ton to do and I can hear Numero 2 yelling for me upstairs. She probably doesn't want to be in her bassinet anymore.. I should probably skidaddle for now... Is that how you spell it?

RADIO EDIT:

okay.. here's that chant I promised:

Let Time Go Fast
Let the Past be Past
Let Me Make It Through This Day
With Ease and Simplicity all the Way
By All the Power of 3 Times 3
As I Will it, So Shall it Be



Say it as many times as you need until you feel comfortable. =) It is a silly little rhyme but it's helped me through many a day.

okay

I've had blogs before and I usually end up with a few readers based on the things I talk about and other people's search criteria. Therefore, I will start out with saying a few things about me. My name is Liz.. That is the only name anyone will ever see mentioned in this blog. I am 24, a wife and a Mommy of two adorable girls. I will never post pictures of my family on here. Specially my daughters. So, do not even ask. I am very protective. I am a student. Studying business. I plan to own my own book store. I'm constantly reading.

Many people will not like the things that I write about. Many things I write about are considered controversial. I talk about religions. Lack of religion. Witchcraft..(I am a practicing witch) Eating disorders.. Mental disorders...these are a few big things that I do discuss often. I have struggled with an eating disorder most of my life. It is not active right now but anyone who's ever had an eating disorder knows that it's a daily battle. If you are one of the people that does not like what I talk about or does not like my "attitude" please feel free to piss off... I am doing this for me, not you.

On the lighter side I will probably discuss books, music, movies.. I'll probably ramble about my classes and my home. I am slightly OCD. I am constantly cleaning. Constantly worried about my one year old getting dirty feet on the floor, there not being enough clean dishes. I do laundry 2-3 times a week for a family of four?? One of which is a 8 week old. A rational person would say that this is un-needed. To me, it is very much needed. I am constantly striving to be perfection. I cook, clean.. I am a secretary for my Husband. I am obsessed with getting all A's (which I wasn't always). I am obsessed with order. I get angry if things are not in their place. I am constantly picking up my one year olds toys and books. She totally takes after me in the sense that she LOVES to read and she LOVES books.. I've got about 12 books on save on Amazon. I love Amazon. I love all bargin shopping actually. Overstock has become my favorite website ever! Can you tell that I may slightly be a little A.D.D also? I am scatter brained and I go quickly from one subject to another.
I have a hard time making up my mind and it's constantly changing.

Anyways, I have things I need to do before the girls get up and my Husband gets home.

I apologize for any spelling errors..