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October 05, 2010


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Well, despite the sensationalistic title, at least the author tells the truth.

The book doesn't seem to focus on the "risks" and the "odds" involved, does it? I mean, who wouldn't love to make $175k or more per year, but how many actually do in real life? How many have successful businesses or real estate investments?

I'm not saying we shouldn't strive for it. I do. I'm just saying that, as you have observed as well, this is not easy to pull off in only seven years.

By the way, there is one little correction I'd like to add: If $175k is gross, federal taxes are about $43k for single, and $37k for married filing jointly. So, to still save $100k per year means an individual will have to live off of $32d, or $38k for a couple. Still possible, but it won't as easy as it looks. This is before state tax and tax exemptions....

I've boiled what I've read myself down to the following equation:

Wealth = Capital + Risk + Time

(To be clear, capital is the money you have right now to make more money with.)

Technically, any one of those factors can do it for you. For example, if you have a massive amount of capital, or if you take massive amounts of risk and beat the odds, or if you have a lot of time to build your wealth, then you can still become wealthy at the expense of the other two factors.

However, there are downsides to all of these individual factors.

The best thing to do is to push on all three of these fronts at the same time, I believe you will then maximize your chances of becoming wealthy.

That's it. As we have all have probably known for quite some time that there is no real secret to being wealthy. It's just not easy. Bottom line, we need start now, stay fanatically focused, and be mindful of the risks involved.

This book sounds like it suffers from survivor bias, sort of like "The Millionaire Mind" (the mildly disappointing sequel to "The Millionaire Next Door").

Yes, most people who get super rich in a short period of time did so by starting their own business.

However, that is not necessarily the best way for an individual to increase their odds of getting rich, due to the high failure rate of small businesses.

I am following a plan that will maximize my probability of becoming wealthy. Maximize my income, minimize my expenses, and invest over time. The good news for me is that I've got 40 years until 'normal' retirement age.

I disagree with you FMF

This book has alot to offer. In fact this book has more to offer than most other books or generic PF websites.

Most books, and most blogs and just about every other piece or PF opinion talk about time and investing and how everyone can do it. And it is true. Everyone can eventually save up a buch of money because all it takes is a little bit of disclipline and alot of time, which everyone has and no one controls.

So I have never found it impressive that someone saved up a big pile of money over a 50,60 70 year timespan. Whoopty.

But this book kicks you square in the nuts with real advice. It won't apply to most people, and that is the point.

Most people can't go out and start their own business and make is successful. That is why it is impressive when it is done.

Most people can't make $200K per year from their own business. Most people don't have the fortitude, the intelligence, the saavy, the balls, or whatever to put it all out there. They want security. A guaranteed paycheck. Benefits.

So that is what they get. And pre-formed, canned, pre-packaged personal finance advice that anyone can make it if they just wait and have patience.

That advice makes me puke.

This book lays it out there. You want to be average, take your time, put it away on the payment plan and follow the heard, then do it thier way.

However, if you want to make some noise, go against the grain, and get after it, here is what you have to do. Get after it. Don't work for the man, work for you. Earn what you are worth, and you get the chance to prove it every day.

Then grow your business. Put your ass on the line. And reap the rewards. only about 5% of the population can do it. And that 5% is who makes 7 in 7.

"Are people so desperate to get rich quick that they soak this stuff up? Ugh."

yeah. Thats why half the infomercials on TV are get rich quick schemes. People buy em.

Trying to get rich quick involves so much risk that you may end up in total failure - a risk I would never take.

Getting rich slowly works - I'm living proof - but even it has a downside.
The numbers below pertain only to our investment portfolio and do not include real estate.

I retired in 1992 at 58 with $320K and didn't reach my first million until I was 63. I have always invested primarily in diversified, actively managed, mutual funds, stressing "Fund Selection" and "Timing" over all else and added another million every two years until at age 69 when I hit $4M. By then I was becoming much more risk averse because as your portfolio grows so does the magnitude of the losses on those really bad days that are inevitable. It then took me three years to add the next million, by then I was 72. Then I started becoming much more conservative and fortunately by the time the market was starting to look ominous in late 2007 I jumped into bonds where I have been ever since. During all of this time we never changed our lifestyle, always bought used cars, flew economy class on our quest to experience the wide, wide world, and lived frugally, well within our means. Now I add another million about every four years but it's pretty meaningless because it will only benefit our heirs. This year we made the decision that our recent river trip from Switzerland through France, Germany, and the Netherlands to Belgium would be our final trip overseas. My wife's walking capabilities being a major factor, but the other equally important factors being age, and that we have run out of places for which we have a great desire to visit.

The getting rich slowly method becomes very addictive because it involves living within your means, not splurging, and saving money whenever you can by doing everything you are able to do rather than paying others to do it for you. Now we are aged 76 and 77, very happy and leading a very quiet and unostentatious life - but looking back neither of us have any regrets and wouldn't change a thing.

I believe you have to be a born risk tasker in order to get rich quickly - I never was, nor were any of my family members. My father was a fireman in England during WWII and I was the first in my extended family to obtain a degree. My goal in life was to have a more enjoyable life than my parents, and that I have achieved.

Well I am guessing the people in the book are the exception to the rule.

I hope these people making 175k aren't taxed, don't have kids, don't get sick, have perfect investment strategies, and nothing ever breaks down.

How often do you hear of people striking it out on their own and they don't make an income for over a year? It is hard to go out on your own right now, and there isn't any magic way to make it all work out perfect. You have to have a fantastic idea, endless time to commit, capital, and a heck of a lot of luck, among other things.

Appreciate your review.. It just saved me hours of reading! ;)

Earning $175k a year is probably not going to be a practical expectation for most. In addition, I know they cite people's personal success stories with start-up businesses but what they don't share is the odds of a person actually succeeding with their start-up verses floundering.

I guess I am the exception, but I think that my husband and I are "normal people" we just have discipline. That's the key, I think.

He went to college after joining the Army - so college was paid for, no debt. Then he became an officer.
I went to college on an ROTC scolarship. Became an officer. No debt.

I am not in the military now, but hubby still is. He makes about $100k w/all the allowances added in. I make about $50k. We live cheaply. Right, we don't have kids, is that so weird? We live on about $50k/year. We don't own shiney new fancy cars...they are older - and paid for. Again, no debt, mega savers.

We do buy healthy food & wash our hands a lot & exercise a lot(not much sickness, right).

We do take our vehicles for maintenance. We rent (so no major repair expenses) plus...we don't own many things that would NEED repair..

Yep, we work for the man, enjoy our lives.. And we're gonna have a million dollars sometime between 35-40.

It just takes discipline (and avoiding BUYING all the CRAP that commercials tell you that you need). OH, and why would you keep up with the Joneses when you know they are up to their eyeballs in debt? Who wants that?

it says you can invest 100k a year and in 7 years have 1 mil. retarded, you can put it in the bank and in 3 more years have 1 mil and no risk...

The first 42 pages are pure gold ... the rest, well I could do without the 8 success stories. But, use those 42 pages to help you 'pick a lifestyle', the multiply that by 20 and you know how much you're shooting for (oh, and double that 'number' for every 20 years until you want to retire - to allow for roughly 4% inflation). That's it!

BTW: Michael Masterson is his pen name. Is that a concern for personal finance writers (as I'm planning to publish my first book under my pen name as well)?

7 years to 7 figures coming out of school is very impressive. It took me 11-12 years to hit 7 figures coming out of school, and I thought that was very fast- at least faster than all my classmates and friends I'm aware of!

Then again, there are some very successful entrepreneurs out there so it's definitely possible- I did it by 'working for the man'.


i actually like the book quite a bit. inspiration sometimes comes from constant reiteration of the obvious, which this book does in this case. agreed with the author completely - start a business, establish it successfully and expedite the process to get rich / accumulate wealth. agree with FMF that it is not a given, but very much possible indeed and being done everyday by people all around us.

btw - the income tax factor is not discussed. amazing how many don't realize what their effective tax rate is and what it can do to their income vs take home pay

I've been working on a 'secret project' for (literally) years: the unified theory of finance ... a simple formula that explains why some are rich, others are poor, and what 'levers to pull' if you want to change your financial situation.

Well, you wouldn't believe me if I told you:

(a) that the breakthrough finally came through because of a comment on THIS VERY POST, and

(b) that it would come from a cartoon character (!) Eugene (Mr) Krabs!

But, if you scroll up to the very first comment, you will indeed see that "Eugene Krabs" has left his version of the 'formula for wealth' (W = C + R + T) right up there.

Now, the formula isn't correct - but, it's close - and, certainly inspired me to come up with what I believe is the REAL formula for wealth: W = C X T exactly one week ago. You can read the full story here:

... just wanted to give credit where credit is due! Oh, and I hope that Eugene Krabs will drop me an e-mail so that I can thank him (her) personally ... please.

does this book tell it like it is and most people have debt. i have to pay back my college. also most people are just making ends meat so how can they save money to be rich.

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