Money Reasons

Smart Reasons to Save, Use and Invest Money

Archive for the ‘Millionaire’ category

Sacrifices Made On the Road To Become A Millionaire

October 11th, 2011

I hate the way President Obama (and other democratic presidents of the past) single out millionaires, especially when he says that the rich need to “pay their fair share, just like everybody else“. Now as a financial blogger, I know that the statistics shows that over 40% of the population don’t pay taxes as is. So perhaps President Obama want the rich to pay all the taxes?

But let’s peal back the layers on President Obama’s millionaire onion, shall we?

From the monumental book called “The Millionaire Next Door“, we all learned that 80% of those that are rich did not become so because of inheritance. So that means that the majority of those that are rich come from the good old middle class group. Both Bill Gates and Warren Buffett are prime examples! Both were from what I would consider the Upper Middle Class, but definitely still part of the middle class.
Those that succeeded in becoming millionaires (the road is full of those that have tried and failed), still sacrificed both time and experiences to get where they are today. The millionaires that I know of put in the typical 70 to 80 hours a week working on their business, for years and years! Forgoing all the fun stuff that the rest of us middle class folks enjoy. And now that they are older and even have less opportunities to enjoy life like only the young can do, we are going to suck their hard earned, long hour worked, money from them? Like a parasite or a leech? It just doesn’t seem very fair does it.
These same millionaires enable the middle class folk like you and I to earn a living and raise our families. We (the middle class) do so while going on nice vacations and enjoying life in ways that the majority of the rest of the world can only dream of. The millionaires are the sharp end of the stick and without them, we are just beating again the wall going nowhere instead of breaking through it.
They buy our city fireworks, give money to charity, help with special project (like stadiums), and benefit their communities in other ways, and the country in general. The millionaires are movers and shakers, they are catalyst that make the world a much better place.
Being a millionaire, or blazing the trail to be a future millionaire isn’t a thing that should be frowned upon! We should all be encouraged to become millionaires.
Millionaires create corporations which in turn pay taxes. So already the business pays taxes, then the businesses pay out the wages to it’s millionaire owners/creators who also pay taxes on the money that has already been taxes at the corporate level (this is called double taxation).

In conclusion, I think it’s wrong to attack the doers of society! Those that stuck their necks out, took the risk and were luck enough to succeed. Such millionaires hired the middle classes along the way, dragging the middle class into a more prosperous state while growing their business (many of which pay taxes in addition to the millionaire).

The long hours that millionaires work means that they miss out on a lot of family activities. This means that they miss soccer games and other activities that their kids may do because of the hours they put into their business. This may be the ultimate sacrifice made by entrepreneurs trying to become rich…

In conclusion, I think politicians and naive protesters tend to just look only at the checkbook balance of millionaires and they don’t take into consideration the sacrifices and hard work that those millionaires had to pay to get rich.

What is your opinion?

MR

P.S. If you are wealth please email me your story. Not only would I love to read about your experiences, I would also like to know about the positive ways you impact your community and benefit society as a whole. If your story is noteworthy, I’ll post it on my site. Of course, I’ll keep it anonymous…

33 comments »

Posted in Millionaire

Tags: journey to become a millionaire millionaire journey millionaire sacrifies millionaires are from the middle class

How Much Money Is a Lot of Money?

February 21st, 2011

Money keeps outgrowing me

Money has changed meaning to me as I grow older…

Of course inflation has had an impact on the worth of money, but I even see my kids valuing money similarly to the way I did as a kid, so I think what I type still applies today!

When $20 was a lot of money!

I once found about ten $20 dollar bills stuffed up on top of the kitchen cabinet as a kid! I quite literally though I found some hidden treasure from the previous owners of the house and that I was rich! At that point (I was 6 or 7), and I had never seen that much money.

At such a young age I thought I was rich! Heck, I even wanted to keep it a secret from my parents! My morals got the best of me though, and I told my mom about my discovery. She actually scolded me, telling me that I shouldn’t be getting into things. During the scolding, she told me she hides money for rainy days, and if I find other such hidden money… to leave it be.

When $100 was a lot of money!

Flash forward a few years (to the time when I was 10), and you’ll find that I’m impressed by the “Benjamins” at this age! While I didn’t own $100, occasionally I’d see them as my grandmother would count money from my grandparent’s businesses. While I didn’t think ten 100s would make me rich, I was still in awe of them!

When $100,000 was a lot of money!

During the age when I was 11 or 12 years old, I was playing video-games with my neighborhood buddies in one of their basement’s downstairs living room. Just out of the blue, I started thinking about how much money I would need to live life without working. As I did the calculations in my head, I finally figured that $100,000 at 10% interest should be all I need!

Of course, I had no idea that the $10,000 I would make from my investments would be less that the poverty level for a family of 4 in the US nor did I consider taxes…

When $1,000,000 was a lot of money!

Before reading “The Millionaire Next Door”, I use to think 1 million would be the amount I should strive to achieve. I figured that if I made 10% on that amount, I would receive $100,000 annually. I thought I would be very rich at that point. I was 15 years old at this point in time.

When $2,000,000 is a lot of money!

After reading “The Millionaire Next Door”, I realized that I should up my target goal to $2,000,000! I’m not sure if I’ll ever reach that point, but it seems to the best answer. You see, if I had $2,000,000 I’d only have to achieve a 5% return annually to have the income from my investment earn my $100,000 annually.

Now I think 5 million or more would be a lot of money!

Yes, now I realize that not only do I have to have money from my investment earning to spend, but I would also need a part of it to invest back into investments, so the portfolio could keep up with inflation. I also realize the 5 million might not be enough, and 10 or 20 million may be a much better numbers!

What do you think a lot of money is?

-MR

Did you like this Article? Then please subscribe to my RSS feed so you can check out new articles when they become available. You will help this blog grow by doing so! Thanks!

32 comments »

Posted in Millionaire

Tags: money money changes money keeps outgrowing me

The Secret Life Of The Joneses

September 14th, 2010

I always though my neighbor next door was a lot like my family. I was wrong!

The Secret Life of the Joneses, Across The Street

Apparently, our neighbor across the street had a secret life that I was unaware of! Over the years, I should have realized that they were wealthier than I thought from the clues that they revealed.

Here are some of the clues:

Once at a party, the neighbor that I thought was like the Joneses , revealed to me that he refinanced his mortgage down to a 10 years loan! I was impressed because I was paying extra on my mortgage too, and only had 5 years left. But the way they spend their money, I assumed the were like the typical Joneses, meaning that they were buying things largely on credit. But when I heard that my neighbor bought a 10 year mortgage, that should have set off some flags.
Their son (7 years old at the time) once told my son that he wants his dad to buy our house too (because of my son’s toys). I always wondered what he meant by that, but I just dismissed it as kid talk
Three years ago, they both bought 2 new cars at the same time.
I’ve seen both the neighbor and his wife out on the port scanning the newspaper ads section like it was made of candy. I guessed that they were looking for houses to buy for rental property.
Once at another party, the neighbor mentioned that he created and sold wine on the side. He claimed that it was mostly a hobby, but he did have a real label and sold the wine at stores.
I noticed that the my old neighbor also was very handy around the house! He even replaced his entire front door insert by himself. Somehow he must have learned how to do construction work! Most likely from houses that he owned as rental property?

So I learned that sometimes those who spend like the Joneses next door, are really just wealthier than you realize because of side jobs and real estate!

Have you ever had a rich neighbor, that you didn’t know were rich until much later, or after they moved like mine?

-MR

20 comments »

Posted in Millionaire, Wealth

Tags: The Joneses

People That Are Rich But Act Poor

May 17th, 2010

Do you know people that are rich but act poor?

Why do they do that? I often wondered that myself. At first, I thought maybe they were acting poor to fool people. That way, when they do business they can play the “I’m just like you” card, “I’m just trying to feed my family”…

Next, I thought maybe they were trying to blend in with their friends, kind of like a chameleon. Perhaps they are afraid what their friends will think, knowing that they are rich. Or perhaps, they want to fit in with their family, and avoid brother “Billy” from asking for money to borrow.

The two reasons above might ring true, but personally, I think they act poor because that is how they were raised and it’s the habits that they are use to.

Ironicially, it works out well for them, because they still fit in with their middle class background and even save more money. Of course, this enables them to become richer and richer since they don’t have to support a highfalutin lifestyle.

I often wonder if I would be the same way or not. I always thought that if I were rich, I would definitely travel more (and I still do think this), but maybe to fit in, I wouldn’t do it as much as I initially believed.

What do you think of people like this, and would you do the same?

-MR

13 comments »

Posted in Millionaire, Wealth

Tags: middle class rich poor rich rich acting poor

10 Millionaire Lifestyle Secrets

February 16th, 2010

10 Millionaire secrets about how they live!

Millionaire Lifestyle

I’m going to review the following list from smartmoney.com.

The following list is written as if the average millionaire is talking directly to us.

“You may think I’m rich, but I don’t.” – This is why so many millionaires declare themselves middle class, and in New York and other big cities… They are very correct in their assessment!
“I shop at WalMart . . .” – This was suprising to me! I thought they would shop a little more upscale to avoid us “the masses” folks.
“…but I didn’t get rich by skimping on lattes”. – Most of them earn well over $100,000, so they really don’t need to skimp here.
“I have a concierge for everything.” – I believe this is for the more high end millionaires. I don’t known any millionaire that use such a service for personal chores.
“You don’t get rich by being nice.” - This really is talking about in a business setting. They are all business when it comes to making money, and rightfully so!
“Taxes are for little people.” the top 1% of earners pay 40% of the federal income taxes. It’s no wonder why they try to reduce taxes as much as possible within legal means… I would too if I were them (and so would you!).
“I was a B student.” – Interesting! Maybe a C, B student still has a chance after all! The median grade point average for millionaires is 2.9! That’s the median folks! And most attended state college or a university! So I guess it really is more than just grades in school! 46% do have advanced degrees though!
“Like my Ferrari? It’s a rental.” - Seems like a smart enough move to me (In fact, I was going to post using rentals instead of purchases in a future post) .
“Turns out money can buy happiness.” - This was a shocker for me. Usually I hear the “money can’t buy happiness” matra, but common sense would dictate that having money affords you more opportunities to make yourself happy! Trips overseas, Disney vacations, flying etc…
“You worry about the Joneses — I worry about keeping up with the Trumps.” - Yes, there will always be someone richer that can afford something that you can’t. They are also worried about a declining lifestyle in retirement (just like the rest of us).

In the category #3″…but I didnt’ get rich by skimping on lattes”, they mention that most millionaires still have mortgages. I checked and around 40% of millionaires don’t have a mortgage at all, and the median mortgage balance was under $100,000. So even though 60% have a mortgage, it’s small potatoes compared to their level of wealth…

My belief is at the beginning of the journey to become a millionaire, it’s makes sense to skip the lattes, if later, you decided that the lattes need to be added, so be it.

The most surprising piece of information I read was:

That means buying luxury items on sale, hunting for bargains – and even clipping coupons. In fact, affluent households, including those with income above $100,000, tend to be heavier coupon users than those with lower incomes, according to a 2009 study by Nielsen and market research firm Inmar.

This should not have surprised me…, of the few millionaire that I know, most are always looking to get things at a cheaper price. See Wealth Tip #3: Be Cheap, Don’t Show Off for my personal observation. I just have a hard time envisioning Warren Buffett or Bill Gates clipping coupons (lol).

Do you know any local millionaires?

If so, are they like frugal middle class millionaires or more like Hollywood “Paris Hilton” style, high consumption millionaires?