Is Accumulating a Net Worth of $1,000,000 Easy? Yes and No - By Mike Matthews

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From: "Marks Motivation Mail" <motivation@chattertonworld.com>

Date: Tue, 2 Nov 2010 06:16:56 +0800

To: <Undisclosed-Recipient>

Subject: Is Accumulating a Net Worth of $1,000,000 Easy? Yes and No - By Mike Matthews

Is accumulating wealth as easy as following a 3-step plan? Yes it is and no it isn't. As with many things in life, accomplishing a goal such as accumulating one million dollars (or even $100,000) depends on your desire, your personal choices and your daily actions.

Let's start with one example on how you might miss this goal. One of the first components of successfully meeting any goal is to have the desire (or a compelling reason). You've probably thought about losing weight, running a marathon or accumulating a great deal of wealth. However, the 'want', 'wish', 'dream' or 'thought' is often not enough to propel you to take continuing action steps to successfully attain your goals. Even if you take the first action step, your ability to sustain enough motivation to meet your goal may soon disappear after a few months or possibly after a few days. Until you create and internalize a 'compelling reason' (true desire) to meet a specific goal, it will be difficult to meet your goal. You have to make this desire a 'must-have' instead of just a 'want'; you need a compelling reason to meet your goal. You need to create a true desire.

The simple part of accumulating wealth is many people have already succeeded in meeting their wealth accumulation goals. I have personally accomplished my net worth goals on two separate occasions and in 3 years I expect to reach my next net worth goal. I started with a net worth of a negative $10,000, mostly consisting of personal credit card debt. Meeting my net worth goal wasn't easy; but I created a compelling reason, made some personal financial choices & took specific, daily actions to make these goals. Many other people from all walks of life, with all types of educational backgrounds are also very successful in meeting their net worth goals. Since it has been done many times before, setting and making your own personal wealth accumulation goal can be very attainable.

Let's say you determined that accumulating a $100,000 net worth is one of your personal goals. If you've created a compelling reason (a true desire), then you're ready to proceed forward to accumulating $100,000 and probably, much more. If you've not made it a 'must' goal and you are still only dreaming about accumulating $100,000, then you're not ready to start. You're not ready to take the second action step. This first step is critical - you must have a "compelling reason" to make your goal.

You have now created your own personal compelling reason to attain your goal. You're ready to get started with the second action step. What are the key elements in meeting your wealth-accumulating goal?

1. Your income must exceed your expenses
2. You will invest your excess funds
3. You will be patient and let the magic of compounding work

1. Your income must exceed your expenses
This is a simple mathematical statement. However for many people, this is the most difficult step to overcome on a consistent basis. If your income does not exceed your expenses, you have to make a choice. You will need to cut your expenses, increase your income or do both.

A. Do you have a compelling reason & discipline to accumulate wealth?

OR

B. Do you lack the discipline and have an immediate gratification need so strong that to satisfy your need, you need to purchase the newest fashion, go to all the home football games, dine out 4 nights a week, etc? It's all about choice.

2. The second step to accumulating wealth is to invest your excess funds
You need to invest your excess funds to meet your personal financial goals. Investments can range from real estate, stocks & bonds, CDs or investing in a small business. Whichever route you choose, create a systematic approach to investing, change direction if necessary, but don't stop. Investment diversification is important to help ensure that you can ride through the normal up-and-down cycles of the stock market or the real estate market. I started with investing in a 401K, then stocks and bonds and eventually real estate. While other young people decided to spend all their weekly paycheck, I made a choice to first, put a few dollars away each week into a 401K and other investment vehicles. I 'paid myself' first and then I spent money on the other entertainment activities.

3. The last step is the magic of compounding
You'll often hear the phrase, "The rich get richer." In the context of compounding, this has a major impact. Let me share a few examples on how you can accumulate $1,000,000, based on average investment return of 10% (stock market average).

-Let's say you are 40 years old and you have $20,000 to invest. To accumulate $1,000,000 by the age of 65, you would need to contribute $567 per month.

-If you're 30 and have $5,000 to invest, you'll need $218 per month to reach $1,000,000 by age 65.

-Let's say you are only 20 years old and you have no money to invest. You can start with absolutely $0 and still only have to add $94 per month to reach that same $1,000,000 goal by age 65.

Wealthy individuals understand the benefits of compounding. Here are examples that show how the rich get richer.

A. If you have accumulated $10,000 and your investments yield a fantastic 20%, you will have earned $2,000 for that year.

B. If you have accumulated $100,000 and your investments don't do as well and you only earn 10%, you still outpace the person with only $10,000 and you'll earn $10,000 for the year.

C. Let's say you met your goal of accumulating $1,000,000 and your investments do even worse at 3% for the year. You will still make over $30,000 for the year. If your investments performed well (10%) you will have made an unbelievable $100,000 for that year.

Whether it's $100,000 or $1,000,000, you have the potential to attain your personal wealth accumulation goal as long as you have a compelling reason (a true desire), you make the right personal choices and you take daily actions towards this goal.

Is it easy? - Not necessarily

Is it possible? - Absolutely yes!

Take Action Today!!

First, set aside 30 minutes or 3 days and create a compelling reason to set your own personal net worth goal.

Then, set a specific net worth goal for 3 months, 1 year, 5 years and 10 years. Not sure what your goal should be. It doesn't matter right now. Just set a goal and change it as needed - you'll probably change it upward.

Next, take $10 out of your wallet or purse - TODAY - and deposit it into your new "Wealth Accumulation" account. You've just now taken the first steps and are now on your way to meeting your goal. You'll be amazed at what you can accomplish!