STOP Trying to Get Rich – 8 Reasons To Avoid Wealth

Are you planning and working hard to become a future millionaire?

Have you ever stopped to think about life after wealth? Now’s the time, mate – while you are on the road to riches.

Here are eight consequences of wealth to avoid!

1.  Your Time and Effort Are Spent on the Chase – You Forget to Enjoy Lifes’ Journey
Don’t be like Karl Rabeder who gave away millions in February 2010, saying “Wealth doesn’t create happiness. For 25 years, I worked like a slave for things I didn’t want or need. Now my dream is to have nothing.” from E. Jane Dickson, in a Readers Digest article entitled “Nothing But Joy”

Do you sometimes feel that life is passing you by while you plug away at the computer keyboard? How do you make sure that you are living your life to its’ fullest?

2.  You Ruin Your Kids

You don’t get to spend time with them (because you are busy earning all that money) so you buy things for them to make up for it. They live in a privileged environment where every wish is met – paving the way for them to develop into a spoiled, egotistical, entitlement-based person who can’t or won’t support themselves. Consequently, they develop no sense of self-worth.

When was the last time you and your kids just hung out together? Have you started preparing your children to deal with the consequences of your future wealth?

3.  Your Tax Bill Goes Up
OK, so maybe we will all be paying a lot of taxes, but if you are rich you are going to pay much more than the rest of us. There is a reason rich folks hire accountants, lawyers, and financial advisors to try to find ways around taxes! Did you know that the US marginal income tax rate during the entire decade of the fifties was at or above 90%! As recently as the decade of the 1970′s it has been at or above 70%. With the trillions of dollars in debt that we are now, it will happen again!

Do you think it would bother you to give Uncle Sam (and Aunt Sally – your state government) ¾ of your yearly income in taxes?

4.  People Like You for Your Money, Not Yourself
You may suddenly become popular with long-lost cousins needing help with the latest surgery for their 13th child. Your ‘friends’ end up always asking for a small loan at the end of the evening.

How will you handle requests for money and other assistance after you are wealthy?

5.  You Spend Your Time Managing Your Riches Instead of Doing What You Want
Getting rich and being rich are two different things. You need the money and investment skills to manage your fortune after you build it. That takes time and time is always in short supply. Even if you hire a money manager, you still need to provide oversight.

Do you enjoy managing your money? Are you prepared to spend more time at it after you are rich?

6.  Your Physical Security Can Be at Risk
Because you have money and nice things, you may become a target for burglars or kidnappers.

How will you counter this potential threat?

7.  You Can Lose Your Drive and Self-esteem
In Richistan – A Journey Through the American Wealth Boom and the Lives of the New Rich, Robert Frank notes that after achieving success in two businesses and selling them for tens of millions of dollars, Michael Sonnenfeldt still talks about ‘finding meaning’ beyond wealth. Frank notes that Sonnefeldt “had an emptiness in his soul. The business had been the center of his life and now it was gone.”

Will life lose its meaning for you if you achieve your wealth goals?

8.  You Will No Longer Belong
You work hard, buy a nice new house in an upscale neighborhood and suddenly you are like the Clempett family (on the old Beverly Hillbillies TV show)– trying to fit in but not knowing how!

How will you stay connected with family and friends who aren’t in your wealth circle?

These 8 consequences could happen on the road to riches. If you are hoping and planning to be wealthy, what steps are you taking to avoid them?

Source: STOP Trying to Get Rich - 8 Reasons To Avoid Wealth

5 Money Lessons I Learned From Watching Wheel of Fortune

"Wheel of Fortune" is one of America's longest-running game shows, giving away more than $200 million in cash and prizes since its premiere in 1975. But behind all that wheel spinning, hand-wringing, and gown-gazing, the show has something more to offer astute viewers. If the game is financial security and the wheel is just a series of chances to make or lose money, then watching Wheel of Fortune can teach us a few fundamental financial lessons.

1. Pay Attention

In every game, there seems to be at least one "Wheel of Fortune" player who isn't quite paying attention. I can't blame them. Under those lights, in front of that crowd, and in that hothouse of pressure, I'd be lucky just to stay vertical. Players repeat letters that have already been called, solve puzzles partially, and give other players an advantage, or mispronounce words so badly that their answer can't be accepted. These are cringe-worthy moments that make me wonder about the level of self-flagellation that happens once the cameras are off.

Not paying attention to our personal finances is just as risky. Being on financial autopilot costs money

. We don't adjust our savings rate as our income increases; we put off revising our withholding tax and continue to think that a big refund check at the end of the year is actually a good thing. Or we don't get around to canceling that unused gym membership and end up tithing $65.00 a month to a very unworthy cause.

When it comes to solving our own financial puzzles, not paying attention is a luxury most of us can't afford.

2. Think Creatively

If there's one skill that serves contestants well on "Wheel of Fortune," it's creative thinking. Solving those puzzles effectively means not letting your mind get too attached to a single potential outcome. For example, the partial clue, "h_ _ _es" could turn out to be horses, houses, or hoaxes. Finding the right solution means cycling through options quickly and creatively and trying to see how different possibilities might fit together.

The same is true of winning the financial game. Successful savers need to constantly source new avenues of income, savings, and investing. Getting locked into one path to the exclusion of all others limits potential and return. (See also: How Cash Flow Allocation Helps You Retire)

3. Seize the Moment

Smart players also seize rare moments, and it's exciting to see solid strategy pay off. For readers unfamiliar with the game, contestants are presented with one Prize Puzzle each show. In addition to the regular cash payout, the winner of the Prize Puzzle gets a deluxe vacation package. I can't tell you how many times I've seen players keep spinning that wheel even when it's obvious they've worked out the correct answer. All too often, these relentless players land on a "bankrupt" wedge and their competition swoops in to collect the trip to Nassau or Hawaii.

In our financial lives, the same thing can happen. We keep spinning that figurative wheel well past our moment to lock in a better mortgage rate, transfer our credit card balances to zero-interest introductory rate, or shake hands and finalize a smokin' bargain on a used car. I'm not advocating thoughtless action, but there are moments when calculated-but-quick action wins the day.

4. Don't Get Greedy

Sure, every game show is a gamble — that's the whole idea. But it's curious to watch players keep spinning the wheel when there are only one or two (quite obvious) letters remaining before the entire answer is spelt out before them. The motivation is obvious: collect more money. The risk is just is clear: get stung by that looming bankrupt wedge. Call me overly cautious, but with a comfortable lead and an answer in my head, that spinning wheel would come to a screeching halt. Vanna might even have time for a quick coffee break.

Same with my financial life, taking an unnecessary risk just to feed the idea of "more" seems counterproductive. I know it sometimes takes big risks to establish a big lead, but the potential pitfalls can be profound.

5. Stay in the Game

Even when it appears to make no financial sense at all, savvy "Wheel" contestants buy vowels. Buying vowels keep them in the game, keeps their mind churning for a solution, and keeps their competitors at bay (at least momentarily).

The financial rule behind this approach is simple: Sometimes you have to spend money to make money. Stretching tight budgets, sacrificing certain wants and needs, and forgoing a few of today's comforts can all help fund investments in our tomorrows — and that's an essential piece of any sound money management plan. Saving and investing keeps us in the game even when it's hard to see the big picture.

Bonus Round

At the risk of stretching this analogy too far, let's wrap things up by talking about the bonus round. On "Wheel of Fortune," the bonus round is the winning player's last chance to walk away with an even bigger payout. The player is given 10 seconds to solve a single puzzle; the minimum cash prize is $30,000, but it can go as high as $1 million for lucky players who've managed to score the requisite million-dollar wedge. (See also: Do You Know Where Your Net Worth Is?)

I call this part of the show the "financial independence" segment, closely mirroring retirement. Players who've managed to make it this far have done several things right and now simply have to up their game slightly to sail through to the end. Of course, a little luck doesn't hurt either. I guess life really does mirror art…or game shows (or both).

Are you a Wheel Watcher? If you could characterize your savings strategy by a game show, what show would it be?

Source:  5 Money Lessons I Learned From Watching Wheel of Fortune

The Only 4 Things You Need to Do to Start Investing

Do you want to get rich through investing one day? Do you think it's even possible? Well, it is. And the best part about investing is that it's simple.

It's not a get-rich-quick scheme, and it's also not rocket science.

I'm going to show you four simple and actionable steps you can take. After reading this article, you'll be able to just follow the directions and start investing right away. Really, there are just four steps.

Let's begin.

1. Choose an Investment Company

Before you can invest, you need to choose an investment company to invest with. There are tons of options out there, including Fidelity, Schwab, and T. Rowe Price. But I'm going to recommend the company that I think is best. And that company is Vanguard.

Why are they the best? Because the company is owned by its investors, which means that the company's interests are aligned with those of their clients.

One specific way they show this alignment is by sharing their profits with their investors, using the profits to lower the fund fees for them (fund fees are expenses you pay no matter where you invest). So the benefit to you as a client is that you get to invest in funds that are some of the lowest costs in the industry. (See also: Online Brokers for Newbies)

2. Open an Account

Now that you have a company to invest in, you need to open an account. Here, you have a few options.

If you meet the income requirements, you can open a Roth IRA, which is a retirement account that comes with some unique tax benefits. You can also open a traditional IRA or general savings account.

To open an account, all you need is to enter some basic personal information, and it only takes about 10 minutes. If you want to speak to someone and have them walk you through the process, the bigger brokerages such as Vanguard have efficient customer service departments.

3. Pick an Investment

After you've opened an account, the next step is to choose your investment. And just as there are many investment companies to choose from, there are many types of investments to choose from as well.

But again, I'm going to recommend what I think is the best option for most beginning investors. And that is a Target Retirement Fund.

Why? Because they follow all the rules of effective investing. The details behind these rules are beyond the scope of this article, but they include:

• choosing an asset allocation,
• diversification,
• regular rebalancing; and
• low cost.

All you need to do is choose the fund with the year closest to the time you expect to retire. For instance, if you're 32 years old and expect to retire in about 31 years, you'd choose the Target Retirement 2045 Fund.

4. Invest Regularly and Often

Lastly, after you've chosen your investment, you need to add money to it. And the sooner you start, the more you'll have later. (See also: Dollar-Cost Averaging Is One Path to Confident Investing)

For instance, let's say you start at age 35 and invest $5,000 every year for 30 years. If your investments grow 8% each year, by the time you're age 65 you'll have just under $612,000.

That's not bad. But check this out.

Let's say you start 10 years earlier — at age 25 — and invest $5,000 every year for just 20 years – 10 years less than our example above. And again, let's say your investments grow 8% each year. Even though you stopped adding money at age 45, by the time you're 65 you'll have over a million dollars.

In other words, by starting just 10 years earlier, you can invest $50,000 less, and still end up with over $540,000 more than the person who started later.

So the key to getting rich is investing as much as you can, as early as you can, and as often as you can. And to make this easy for you, you can set up your account to have money automatically invested from your checking account. That way, you make money regularly, without any effort on your part.

Check out this calculator, where you can play with different numbers to see just how much money you can end up with.

Now you know the simple steps to begin investing. Get started now, and you'll be making money in no time.

Source: The Only 4 Things You Need to Do to Start Investing