![]() Then, think about this: it took Sam 40 years to generate his $1.5 million portfolio, working and saving over his entire career. Think about that: he started with $1.5 million. In an average market environment, Sam probably ends up with a portfolio value of $3.6 million. So what do their portfolios look like at that time? Her average annual return clocks in at 9.7 percent.īoth Sam and Kate live to be 90 years old. She chooses to remain aggressive with her investments and keeps 90 percent in stocks and 10 percent in bonds. Over time, he earns a respectable 7.3 percent average annual return. He decides to invest 50 percent of his account in stocks and 50 percent in bonds. Sam enters retirement and does something very popular – and frequently very prudent – he decreases the risk of his retirement portfolio. It all comes down to investing – particularly, investing aggressively. It’s what they each do next that ultimately determines whether they simply do well with what they have accumulated or whether they build serious wealth. They each expect to withdraw $50,000 annually from their portfolios for spending needs in retirement. In fact, they each accumulated a retirement portfolio worth $1.5 million. Let’s say we have two individuals, Sam and Kate, both of whom followed the four-step process for decades and are now 65 years old and ready to retire. Instead, the real money – the real wealth – is made after you quit working and are no longer receiving a paycheck for your time and labor. It’s when you are investing for the future.īut if you faithfully follow the four-step-wealth-building process outlined above, that’s not at all when the real money is made. After all, that’s when you have a steady paycheck padding your bank account every few weeks. Most people think the real money in life is made during your working years. Truthfully, very few people will ever successfully exploit the secret, even when it’s known. ![]() I’ll give you the secret in a few moments. Knowing the secret, though, isn’t good enough. It’s when the real money is made – or can be made. It looks like this:īut there’s a secret in those four steps. ![]() In my last column, I laid out a simple process for building wealth. ![]()
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