10 steps to retire a millionaire


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10 steps to retire a millionaire

  1. 1. Entrepreneurship Ref: 0006INVESTMENT NOTICE: Message Web Site Content LimitationsWe make no guarantees as to the accuracy, thoroughness or quality of the information on this web site, which isprovided only on an “AS-IS” and “AS AVAILABLE” basis at User’s sole risk. Investopedia shall not be responsibleor liable for any errors, omissions or inaccuracies in the web site content. The information and investmentstrategies provided at this site are neither comprehensive nor appropriate for every individual. Some of theinformation is relevant only in Canada or the U.S., and may not be relevant to or compliant with the laws,regulations or other legal requirements of other countries. It is your responsibility to determine whether, how and towhat extent your intended use of the information and services will be technically and legally possible in the areas ofthe world where you intend to use them. You are advised to verify any information before using it for any personal,financial or business purpose. The web site content and services may be modified at any time by us, withoutadvance notice or reason, and Investopedia shall have no obligation to notify you of any corrections or changes toany web site content.10 Steps To Retire A Millionaireby Lisa Smith5th June 2009Having a million-dollar portfolio is a retirement dream for many people. Making that dream come truerequires some serious effort. While success is never a sure thing, the 10 steps outlined below will go along way toward helping you achieve your objective. Arrogance is the byproduct of unhealthy levels of prideand ego. In technical fields such as finance and accounting, it is imperative that professionals continuously learnnew things and increase their knowledge and wisdom base. Finance professionals also need to get along with awide audience within the company, because they collect data and reports from a diverse set of groups within thecompany.1. Set the GoalNobody plans to fail, but plenty of people fail to plan. Its a cliché, but its true. "Plan" is the leading self-help advice from athletes, business moguls and everyday people who have achieved extraordinarygoals.2. Start Saving For further information on this article and the coaching programs available please contact: Image Group International Asia Pacific Head Office Tel: (+61 3) 9820 4449 E: info@imagegroup.com.au W: www.imagegroup.com.au ©2009
  2. 2. If you dont save, youll never reach your goal. As obvious as this might seems, far too many peoplenever even start to save. If your employer offers a 401(k) plan, enrolling in the plan is a great way to putyour savings on autopilot. Simply sign up for the plan and contributions will be automatically taken out ofyour paycheck, increasing your savings and decreasing your immediate tax liability.If your employer offers to match your contributions up to a certain percentage, be sure to contributeenough to get the full match. Its like getting a guaranteed return on your investment. Finding the cash tostash may be a challenge, particularly when youre young, but dont let that stop you from pursuing futureriches.3. Get AggressiveStudies have shown that the majority of the returns generated by an investment are dictated by theasset-allocation decision. If you are looking to grow your wealth over time, fixed-income investmentsarent likely to get the job done, and inflation can take a big chunk out of your savings.Investing in equities entails more risk, but is also statistically likely to lead to greater returns. For many ofus, its a risk we have to take if want to see our wealth grow. Asset-allocation strategies can help youlearn how to make picking the right mix of securities the core of your investing strategy. (AchievingOptimal Asset Allocation can help you minimize risk while maximizing return. Asset Allocation: OneDecision To Rule Them All explains how to treat all your investments as a single portfolio to maximizereturns.)4. Prepare for Rainy DaysPart of long-term planning involves accepting the idea that setbacks will occur. If you are not prepared,these setbacks can put a stop to your savings efforts. While you cant avoid all of the bumps in the road,you can prepare in advance to mitigate the damage they can do.5. Save MoreYour income should rise as time passes. Youll get raises, youll change jobs, and maybe youll getmarried and become a two-income family. Every time more cash comes in to your pocket, you shouldincrease the amount that you save. The key to reaching your goal as quickly as possible is to save asmuch as you can.6.Watch Your SpendingVacations, car, kids and all of lifes other expenses take a big chunk out of your paycheck. To maximize For further information on this article and the coaching programs available please contact: Image Group International Asia Pacific Head Office Tel: (+61 3) 9820 4449 E: info@imagegroup.com.au W: www.imagegroup.com.au ©2009
  3. 3. your savings, you need to minimize your spending. Buying a home you can afford and living a lifestylethat is below your means and not funded by credit cards are all necessities if you want to boost yoursavings.7. Monitor Your PortfolioTheres no need to obsess over every movement of the Dow. Instead, check your portfolio once a year.Rebalance your asset allocation to keep on track with your plan.8. Max Out Your OptionsTake advantage of every savings opportunity that comes your way. Make the maximum contribution totax-deferred savings plans and then open up a taxable account too. Dont let any chance to save getaway.9. Catch-Up ContributionsWhen you reach age50, you are eligible to increase contributions to tax-deferred savings plans. Takeadvantage of this opportunity! (For more ways to save money and increase your nest egg for the fast-approaching golden years, read Retirement Savings Tips For 55- To 64-Year-Olds.)10. Have Patience"Get-rich-quick" schemes are usually just that - schemes. The power of compounding takes time, soinvest early, invest often and accept that the road to riches is often long and slow. With that in mind, thesooner you get started, the better your odds of achieving your goals.The Reality Of RetirementRetirement might seem far away, but it when it arrives nobody ever complains about having too muchmoney. Some people even question whether a million dollars is enough.That said, with lots of planning and discipline, you can reach your retirement goals and live a comfortablelife after work. For further information on this article and the coaching programs available please contact: Image Group International Asia Pacific Head Office Tel: (+61 3) 9820 4449 E: info@imagegroup.com.au W: www.imagegroup.com.au ©2009