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July 20, 2010

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Your two steps will definitely get you there. To speed up the process I would suggest sitting down and thinking hard about the concept of return. Does it pay to spend $5,000 to get an AA degree? Are you learning something that will give you a return on your investment? Look at your job as an investment of your time. Are you learning something that will take you to a higher income level? Many times when you advance you get a higher income and the extra can be saved. This speeds you along in your monetary goals.
Is there a position above you that you want? If not look to move.

FMF, your first two steps are the most important, but I think you need to add an investing step. Unless you are making $200,000 per year or more, I doubt you would reach $1 MM just through saving.

Rob - I concur. Consider this: A person making 40k at age 20 with annual spending of 20k a year can end up with 1M after working and saving for 50 years (will be age 70 by then). For simplicity, this does not account for taxes, car repairs, raises lifestyle changes, job losses, marriages, kids, etc. You get the picture however.

So while possible, I wouldn't want to imagine the kind of life one would be living to achieve this. FMF's equation has a lot of validity to it, and a couple components can certainly be added to expedite the process such as 1) investing wisely and 2) making more money (through entrepreneurship)

Rob --

Yes, you are correct. You need to do something with the difference to make it work for you. It's kind of assumed to me, but it's probably better to simply come out and say it to leave no doubt.

Nice post! I agree with the point on avoiding senseless spending. I believe a man can be rich only if he knows the value of money, and invests it in proper ways.

it really is as simple as spend less than you earn. but to really make a million you will have to continuously increase your income or create new second streams of income. part time second jobs, online work, anythign like that can make a huge difference
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to me the easiest way to make a million is to control what you spend and start a business, grow it slowly over time and God willing you will get the coveted millionaire status. I want to be a multimillionaire and i am actively doing the above things but i am letting God have the final say in my financial life because financial independence is just a facet of the jungle that is life.

I think articles like the one above aren't targeted to those of us that already spend less than we earn. I may be wrong, but are any of you truly surprised by anything on the list? I think alliteration like that is meant to grab the attention of non-personal finance people. :-)

My wife and I did all of the above from 1956 when we got married and 1992 when we retired.
At that time we had $320,000 in our investment portfolio, we were debt free, a home that was probably worth a like amount at that time. We were certainly not millionaires.

As I have written repeatedly it took the stockmarket boom of the 90's to do it for us.

Thus I would offer that the above ten principles are really good and should be followed but they alone are not nearly enough unless you can capitalize on a Bull Market or start a successful business.

Unfortunately the whole world economy, USA, Europe, Asia is going through a very tough time right now and a Bull Market seems a long way off.

Unfortunately, the first million is too difficult to obtain so I am going to start working on the second million. I hear that is much easier... ;)

I would add one additional item to your list of 2
1) spend less than you make
2) invest the difference
3) do this over a long period of time

Hahaha at Doug!

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