Eight Steps to Seven Figures - PCC - ebook
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In the tradition of the megabestseller The Millionaire Next Door, Eight Steps to Seven Figures brings together in-depth interviews with over two hundred everyday people whose investments have made them millionaires. But while The Millionaire Next Door describes its subjects' lifestyles and spending habits, Eight Steps to Seven Figures focuses squarely on the investing strategies and principles that ordinary people have used to achieve the magic million-dollar mark. Bestselling author and chartered financial analyst (CFA) Charles Carlson reveals the keys used by the newly wealthy to reap extraordinary dividends, including a discussion of the specific stocks, bonds, and other financial vehicles they choose as part of their investment mix. In the course of the book, readers learn how to determine how much time they need to spend researching and watching over their portfolios, when to buy, and equally important, when to sell. From hundreds of accounts of those Carlson calls "Main Street millionaires," he distills eight specific investment rules anyone can follow to become financially worry-free. Among the lessons he outlines and elaborates on: "Buy and Hold and Buy and Hold and Buy and Hold"--Harness the power of time in growing your portfolio and compounding your investment returns. "Know Where You Are Going"--Determine your invest        ment time frame, financial goals, and risk "comfort" level to put together a successful wealth-building strategy. "Play to Your Strengths"--Everyone has different personality strengths, investment advantages, and specialized knowledge that they bring to the table; recognize and exploit them in achieving your financial goals. One of the best things about Carlson's book is that it recognizes and allows for readers who may not have the resources to follow all eight rules. It offers reassurance and hope that there is more than one way to achieve the seven-figure pinnacle. Even people who started investing later in life, and can't fully harness the power of time, can find here the guidance they need to become wealthy. Filled with the insights and investment advice that hundreds of everyday people have followed to become rich, and buttressed with countless you-are-there stories of how these millionaires did it, Eight Steps to Seven Figures is an absolute must for today's investors. Bestselling author and chartered financial analyst (CFA) Charles Carlson reveals the keys used by the newly wealthy to reap extraordinary dividends, including a discussion of the specific stocks, bonds, and other financial vehicles they chose as part of their investment mix. In the course of the book, readers learn how much time they need to spend researching and watching over their portfolios, when to buy, and equally important, when to sell. From hundreds of accounts of those Carlson calls "Main Street millionaires," he distills eight specific investment rules anyone can follow to become financially worry-free.  One of the best things about Carlson's book is that it recognizes and allows for readers who may not have the resources to follow all eight rules. It offers reassurance and hope that there is more than one way to achieve the seven-figure pinnacle. Even people who started investing later in life and can't fully harness the power of time still can find the guidance they need to become wealthy.  Filled with the insights and investment advice that hundreds of everyday people have followed to become rich, and buttressed with countless you-are-there stories of how these millionaires did it, Eight Steps to Seven Figures is an absolute must for today's investors.-->

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Step 1Start investing immediately

You'll never have more than a million dollars in assets if you don't get started somewhere. The power of compounding means time is your greatest ally. Therefore, begin now to switch some of your expenditure from consumption to investment.

Compound interest is the single most important principle of investing. The greatest gains are always found in the last few years, but you can't get to the highly profitable last few years without going through the low-profit early years.

For example, to achieve $1 million in assets by age 65 assuming an 11-percent annual return and a reinvestment of profits:

■ A 20-year old needs to invest $67 per month.

■ A 30-year old needs to invest $202 per month.

■ A 40-year old needs to invest $629 per month.

■ A 50-year old needs to invest $2,180 per month.

Investment success is the ultimate democratic process--a 15-year old has exactly the same opportunity to reach a seven-figure portfolio by age 40 as a 40-year old person does by age 65. And that holds true irrespective of race, creed or any other demographic factor. Investment returns are totally democratic.

The most frequently used excuses for not starting an investment program immediately are:

1. I don't have any money to invest.

Most everyday millionaire investors start small by investing the money they would otherwise have spent on non-essential luxuries and other lifestyle items. They also take on part-time jobs, avoid consumer credit (like installment payments and credit cards) and live modestly in order to get together a few dollars to invest. Some everyday millionaires have started with as little as $5 per week put into their own investment program. You don't have to have a lot of money coming in to start investing. All that's required is a little creativity in finding ways to divert part of your current income stream into an investment program.

2. I don't have enough money to invest.

Many people sit on the sidelines because they don't have $1,000 or $5,000 start an investment. In reality, you can invest as little as $10 a month in:

Dividend reinvestment (DRIP) plans of public companies.

Automatic monthly payments to no-load mutual funds.

Automatic payroll deductions to 401(k) plans.

The bottom line is everyone can start investing, even with a very modest amount of money committed each month. It isn't the amount that counts--it's the discipline in getting going.

3. I don't know enough.

Actually, most people know more than enough to invest successfully--they just don't realize they do. There are a number of inexpensive ways to educate yourself about the financial markets including:

Books--hundreds of titles

Financial magazines--Forbes, Fortune, Money

Newsletters--DRIP Investor, Personal Finance

Newspapers--Wall Street Journal, Investors Bus. Daily

TV shows--CNN s Moneyline, Nightly Business Report

The Internet--hundreds of Web sites

4. I don't have enough time.

In reality, an organized investor only needs to spend a few minutes every day keeping everything organized. It's easy to get that time by cutting down on time spent on recreational or nonproductive activities.

5. I'm too young.

It's impossible to start investing too soon. The earlier you get started, the better the returns compounding will generate for you. Besides which, the discipline of investing will help in every other area in life.

6. I'm too old.

You actually have more time than you realize. People are living longer and longer. Even if you start investing late in life, you'll still be better off in the future if you invest now. It's never too late to achieve something worthwhile.

7. I don't have a broker.

You don't need one. There are hundreds of online brokers who will handle stock transactions for you. You can even buy fractional shares if you want. Some brokers:

www.buyandhold.com

www.etrade.com

www.suretrade.com

8. The market is too high.