Comments on: But, I need more!

By: AJC

AJC — Wed, 03 Sep 2008 01:32:25 +0000

@ Luis – getting to $2.5 million is 5 years requires a HIGHER compound growth rate (120%) than getting to $5 Million in 7 years (90%)

By: geoluis

geoluis — Mon, 01 Sep 2008 22:32:14 +0000

This is really a perception issue and it assumes living in the USA. If I strive for 5 million in 7 years and only achieve 2.5 million in 5 years. Though I am not on course to meeting my set goal, I still have accoomplished more than most and could easily sail off in to the sunset (outside of the USA of course)

By: AJC

AJC — Sun, 31 Aug 2008 02:16:05 +0000

@ Jeff – Check out these two posts from my ‘sister site’, where I’m conducting the 7 Millionaires — In Training! ‘grand experiment’

http://7m7y.com/2008/08/22/how-steep-is-your-mountain/

http://7m7y.com/2008/08/23/what-sort-of-buggy-are-you-riding/

These might help to show you “where I’m coming from” ….

By: Jeff

Jeff — Sat, 30 Aug 2008 22:44:11 +0000

@AJC
“If you are going to get rich, the mountain WILL seem higher than the available investment options seem to be able to deliver.”
Why is that? I would think that a savvy investor could calculate an expected range of returns for an investment option (given the inherent risks of the asset and the financing they choose) and then set their goals accordingly?
Is this a perception issue, i.e., is the investment option able to regularly deliver enough return to climb the mountain, but investors just can’t appreciate the true value of the investment?
Or is it that the investment option needs to provide an exceptional return (or at least better than average return) to meet your goal–climb the mountain? In other words, does your system require investors to aim high, invest in high-risk investments, and hope to catch a few breaks (or get lucky for lack of a better term) in order to reach their goal?

By: AJC

AJC — Sat, 30 Aug 2008 21:45:33 +0000

@ Jeff – there’s a difference between involvement (when you set your goal on what is reasonably attainable) and commitment (when your goal ‘seems’ too high). If you need to understand the difference, think about your Sunday morning bacon’n'egg breakfast: the chicken was ‘involved’, but the pig was ‘committed’.

If you are going to get rich, the mountain WILL seem higher than the available investment options seem to be able to deliver.

By: Jeff

Jeff — Sat, 30 Aug 2008 20:47:49 +0000

You are right…you need a goal to strive for and that goal will help direct your investment strategy. But, how do you know your goal is reasonably attainable?

Is $2 million in 20 years a reasonably attainable goal? How about $5 million in 10 years? …or $20 million in 5 years?

The only way you can tell is by looking at available investment options and the likelihood of receiving your desired return through those options. Whether you investigate the investment options before you set your goal, or set your goal and then investigate your investment options (and then revaluate your goal based on the investment options), seems to be moot…so long as you do both.

By: AJC

AJC — Sat, 30 Aug 2008 14:20:25 +0000

A Scott – sounds like a plan

By: Scott

Scott — Sat, 30 Aug 2008 13:47:35 +0000

Picking the right road for you is the best analogy on this topic and one I really like. I think before we master any concept, we are thinking so broad-based, general and non-focused, that we really don’t know what we want.

Achieving financial success for yourself is like acquiring any other skill, knowledge or profession, you must continue to narrow your focus. In this case narrow your focus onto your requirements, aka, your NUMBER and the DATE you need it and then put the blinders on to all else except what CAN get you there only.

Remember, a master is one who focuses on the ever finer details of that which he/she loves…so find out what you truly love about your purpose, your number and when you need it, then focus on the ever finer details on how to get there and ask questions like; will this 401K road get me there?