The 9 Ways to Get Rich
The personal finance blogger at Can I Get Rich on a Salary has detailed nine ways he believes people can become rich. His list includes the following:
1. Visionary
2. Ridiculous Talent
3. Blind Luck
4. Opportunistic Luck
5. Small Business Empire
6. Small Business Investment
7. Highly Aggressive Investment
8. Skilled Investor
9. Slow and Steady
These can be divided into three basic groups:
1. Extraordinary skill/ability that only a handful of people possess.
2. Luck that rivals (or is worse than) the odds of getting struck by lightning.
3. A series of tasks almost anyone can do if they are disciplined enough.
Obviously, option #3, which relates to the "slow and steady" approach, is the most viable choice for the vast majority of people. And yet there's that issue of discipline that almost makes this solution as likely as golfing better than Tiger Woods or finding oil in your back yard. Why is that?
The 9 Or So Paths To Getting Rich--And My Purported Analysis Of Them [Can I Get Rich on a Salary]
— FREE MONEY FINANCE
(Photo: Getty)
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Comments:
I'm guess #4 as the common method, followed by #9.
This of course assumes we're discounting everyone who is starting out either rich or has wealthy family connections.
Lotto tickets?
Extended warranties?
That list is crock. Nothing specific or practical.
its a slow day. gotta keep those ad impressions up.
Wow, that was an awful article.
ad impressions? If I have adblocker do websites still get ad impression?
Is this a joke? "Be really smart, good, or lucky at your investments overall-so that your overall return beats the market on some regular basis." [GAPING STARE]
People would be less obsessed with unlocking the mystery of getting rich quick if things were less stacked against them in the first place.
Tons of student loan debt and extremely high college costs.
Wages that are not keeping up to the cost of living in most employment.
Getting gouged everywhere you turn even if your careful with your money.
We have let the foxes run the hen house too long.
After reading today's NYTimes I am considering a career as a hedge fund manager, not sure what category that comes under. 4 I guess?
That really isn't much of a list. Especially blind luck. Even people who get rich from blind luck, which I am guessing to be lotto winners, tend to have financial problems. Then spend to fast, get scammed out of money, things like that.
This article is pretty bad, to say the least. Not only are these super-obvious, some of them are even wrong.
Why do people insist that your investments have "beat the market" consistently to get rich? Since 1962, stocks have grown an average of 8.6% (I think it is) annualized. If you just let that money grow and don't draw off of it at the end, you have quite a bit of cash at the end of your investment. It's also very easy to invest in a broad stock market index fund these days with very low fees (Vanguard has some great funds, for instance).
@facted: You have to beat the market because the average return of stocks is just 2 points over inflation- so you stay about the same as you began. Also, the whole point of being rich is you 'get ahead'. If you 'get average', you aren't rich.
Way #10 to get rich:
Steal someone's identity and/or financial information and go shopping!
How to get rich: Make lots of money very quickly... possibly by being very talented, winning a game of chance, or getting in on the next Microsoft at the ground floor...
@blitzcat: You're saying annual inflation is about 6% from 1962 until today? That would be quite something.
Heh, they updated the article with a note to consumerist readers. I think we're not welcome, like americans in Paris.
@facted:
Almost commented on that, but I've pretty much given up trying to bring anything serious to the table after arguing with way too many armchair investment experts.
The point about what "rich" is makes a valid point, although if you can "get average" you'll be far ahead of those who didn't invest at all, making you decidedly "ahead"
If you stick all your money in 2.5 - 3% CDs, then you are "average" and (as of right now) losing purchasing power.
@Secret Agent Man: Hey I bet you work in the financial services industry. When you're done talking about how the stock market always goes up (*ahem* 1.3% annualized returns after dividends and core inflation since 1999 *ahem*), can you tell me again about how real estate always goes up?
I love how you cast aspersions on "armchair" investors when the professionals have done such a bang-up job of threatening the financial well-being of the entire globe.
The most common way of getting rich is being rich in the first place. I guess that falls in to the "blind luck" category (though you would still have to be the fastest, hardest-working sperm in the bunch). Don't let those bunk "income mobility" studies fool you - most of the rich and the super-rich were born into wealth.
@Empire: Actually, Secret Agent Man is correct. Over time, stock markets do go up without question. The main question is what your timeline is. If you're investing for 5 years, then you can certainly not say whether or not ANY investment is going to do what you want. However, over time, stocks will gain value (historically, that has happened at 8.2% per year annualized).
As for the inflation comment earlier:
I plugged in a 25000 dollar investment (in 1962) into a historical inflation calculator and if found that money would be $171,508 in 2007 terms. However, the same 25000 invested at 8.2% annualized would be $988,635.26. That's quite a bit of a lead over inflation if you ask me.
The bottom line is that no investment is fool-proof or a sure-thing. Over time, however, our economy has grown and will likely continue to grow. If you somehow broadly invest (index mutual funds are a wise-bet) in that growth, you will get a piece of the pie.
@Empire: I don't know where you're getting the 1.3% here, but aren't you cherrypicking a bit by using a starting point at the peak of the Dot Com boom and an end point during the worst downturns in recent history?
The idea that most rich people start out rich is pretty much entirely incorrect. An overwelming majority of my rich clients didn't have rich parents. Some of my richest clients' parents are dirt poor. And I mean "earned income credit and only have SS for retirement" poor.
Most millionaires make their own money through their own businesses and/or slow and steady investing. I highly suggest that everyone read "The Millionaire Next Door." It ties in exactly with everything I have experienced.
If you want to be wealthy, your number one life goal needs to be "Accumulate wealth." So stop buying crap and living in a "nice" neighborhood and throw up 30-40% of your gross earnings in investments. You won't be wealthy overnight, but you'll be 50 years old one day and not worried about losing your job and retirement.
Well, if adhering to a slow, steady disciplined strategy is something not a lot of people do, then by definition it's an areas where someone good at doing so has an opportunity.
Personally, I think all this talk about dollar cost averaging, index funds, and not trying to time the market is mainly put out there by investment professionals to dampen volatility. Turns out to be good advice, though.
I think it's most likely because of the steady decline of pride in one's work this nation's seen on the years.
I don't mean to get all AMERIKKKA about things, but everyone wants to be rich and lazy, something that requires "Luck that rivals (or is worse than) the odds of getting struck by lightning." Everyone wants to be rich, but the vast majority of them are more comfortable being lazy and skating by then working hard for a greater payoff.