Self-Made Millionaire: This Is The No. 1 Way To Get Rich—And Most Young People Are Not Doing It

Why do so many of us have such poor attitudes toward money? There are a few convincing cases you can make: Not enough education, too much information, confusing messages from the media or simply a lack of interest.

Whatever the reason, it’s clear that young people aren’t doing the single most effective thing that will make them rich: Investing in the stock market.

According to a recent Gallup poll, only 37% of young Americans ages 35 and under said they owned stocks between 2017 and 2018, compared to the 61% of people over the age of 35 did own stocks.

Opening an investment account gives you access to the biggest money-making vehicle in the history of the world — and you don’t have to be rich to do it. Many account providers will waive minimums (the amount required to open an account) if you set up an automatic monthly transfer.

What if you had started investing $10 per week five years ago? Assuming an average return of 8%, you’d have thousands of dollars today— all from investing a little more than $1 per day. Think about that $10 a week. Where did it go, anyway? If you’re like most, you probably spent it on Uber rides and Frappuccinos.

Despite wild rides in the stock market, the best thing you can do is to think long-term and start investing early:

• If you invest $10 per week: After one year, you’ll have $541; after five years, you’ll have $3,173; after 10 years, you’ll have $7,836.

• If you invest $20 per week: After one year, you’ll have $1,082; after five years, you’ll have $6,347; after 10 years, you’ll have $15,672.

• If you invest $50 per week: After one year, you’ll have $2,705; after five years, you’ll have $15,867; after 10 years, you’ll have $39,181.

Although most people are limited by circumstances, most will never get rich simply because they have poor money practices.

   What it means: This is code for: “I want to hide behind complexity.” Any new topic is overwhelming (i.e., diets, workout regimens or parenting). The answer isn’t to avoid it — it’s to pick a source of information and start learning.


2.Invisible script: “I don’t want to be the person who buys into the market when it peaks.“

   What it means: You already know you can’t time the market, but you just don’t understand it. You can make this problem disappear by automatically investing each month.


3. Invisible script: “I haven’t invested in anything because there are so many different options to put my money in over the long term (i.e., real estate, stocks, cryptocurrency and commodities). I know I should invest, but stocks don’t ‘feel’ comfortable.“

   What it means: The great irony is that you believe “control” will help your investment returns. In reality, you’d actually get better returns by doing less. The less control you have, the better. The average investor buys high, sells low and trades frequently (which incurs taxes). All of this cuts your returns by huge amounts.


4. Invisible script: “Due to my lack of knowledge and experience in the stock market, I don’t wish to lose my hard-earned money.“

    What it means: Ironically, every day that you don’t invest, you’re actually losing money due to inflation. You’ll never realize this until you’re in your 70s, at which point it’ll be too late.


5. Invisible script: “Fees are a big part of it. I only have a small amount to invest, so trading fees can make a big dent in my returns.“

    What it means: It’s totally mystifying how people think “investing = trading stocks.” Oh wait, no it isn’t — every dumb commercial and app pushes this agenda. When you follow my advice, your fees can be really low.


6. Invisible script: “I ordered a small coffee instead of a large, so I’m actually saving X dollars a day. Am I adulting?“

    What it means: Not really.









This is an adapted excerpt from “I Will Teach You to Be Rich” by Ramit Sethi (Workman). Copyright © 2019.


SOURCE: CNBC
IMAGE SOURCE: PIXABAY