Roadmap To Riches

Let me tee up how I think about making money … serious money … say, $7 million in 7 years. Making that sort of money – for most of us who don’t inherit, win, steal, speculate, or gamble our way to that much moolah – is a long journey …

It’s not so bad when you consider that 99% of people can’t SAVE their way to $1,000,000 in 20 years … but, my point is that it’s still a journey that takes quite some time.

So, if you were to go on a long journey (besides taking a change of shorts) what would you need?

Three things …

1. A destination

You would need to know where you’re going … for a short, local journey, you probably need an address … for a long, global-scale journey, a country and city would be a nice start.

2. A map and compass

If it’s a local journey, you will probably need a street map … although, very simple instructions from somebody who knows the way will probably do.

But, if it’s a global-scale journey, the trip will most likely be broken down into stages for you by your travel agent, and you will need a series of  ‘planes, trains, automobiles’ maps, telling you how to get from HERE to THERE.

 Also, it would be a good idea to have a compass to tell which way is UP when you read the maps!

3. The Rules of the Road

Now, it would be nice to get to where you’re going without being arrested. If it’s a local journey, you can probably use common sense (although, it’s still best not to jaywalk).

But, if it’s a global scale journey, the rules may be totally different at different stages of the journey (you DO know that the Brits drive on the other side of the road, don’t you?).

Well, making money is also a kind of journey … therefore, you need …

… three things:

1. A destination

When it comes to money, your destination is in two parts (a) HOW MUCH you need, and (b) WHEN you need it. The when is usually in terms of WHEN you stop working, but it need not be; and the HOW MUCH is determined by how well you want to live when you get there (1 star? 5 star? In between?).

2. A map and compass

Your map will be the three stages of your financial journey (getting debt free and starting a savings plan; ramping up both your income and your investments; keeping your money once you get wherever ‘there’ is for you) and we will cover all of that over the coming weeks.

Your compass will be your Investment Net Worth (we’ll discuss the difference between this and your ordinary, old ‘net worth’ later this week).

 3. The Rules of the Road

Like every good ‘rule book’ the Rules of the Finance ‘road’ is a thick one! I’ll be giving you many of these rules over the coming weeks and months in the cyber-pages of this blog; an example of a Financial Rule is the 20% rule of investing in your own home …

… there are many, many more. By learning these Financial Rules, you can shave YEARS off the time it takes you to get rich.

This blog is here to show you how!




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15 thoughts on “Roadmap To Riches

  1. @ Jason – Thanks … you are 100% right … but, I’ll leave it as stated in your comment so that credit stays where it rightfully belongs … with you!

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  3. AJC, I think I have a fairly solid financial intelligence, although I am always on the lookout for learning new information on stocks, and real estate and the like. When I was a sophomore in high school I spent my saved money on stocks instead of a car like everyone else. But what I want to know, is how to START. It seems like you need money to make money, but right now I am just about to begin college, and while I have no intention whatsoever of spending my life (especially my youthful 22-40 years) working, right now I don’t have the money to buy real estate and begin to build an income generating property portfolio. In four years when I graduate, I will have no college loan debt, but I don’t want to “enter the workforce” because I will never get rich working for someone else. Do you think its possible to do something like 2 million in 4 years, so that when I graduate I will have enough money to use to make more money with? And if so, how do I start that now? I currently have about $16,000 in stocks.

  4. @ Alex – That’s a 400% compound annual return you’re looking for … only two ‘investments’ that I know of that will give you that: lottery; business. Start the next Facebook while you are still in college …

  5. Well maybe I was too hasty in throwing out the figure 2 million. I guess what i really mean is how do I build up a large enough sum of money to actually begin making money with? All of your “money making 101” strategies seem to already require a sizable pile of money with which to begin implementing them. Also, the real estate strategy of building up passive income through rents is an extremely long term one. If I were to buy a $160,000 dollar house at 6% with about 30,000 down (assuming my 16k turned into 30k during my college years), my mortgage would be around 720 a month. Realistically, I could probably rent that property for about 1100 a month. So we are only talking about somewhere around $3600 per year. Its a strategy that takes over 25 years to really begin producing enough passive income to support just a modest, middle class lifestyle.

  6. @ Alex – My point exactly … that’s why you need to skip to Making Money 201. In fact, my point about the ‘next Facebook’ was meant to be taken seriously 🙂

  7. I wish I had stumbled across your website earlier, when you were still taking applications for your “7 millionaires in training” project. I would love to have been a part of it.

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  10. Cool, and sounds like fun. I’ve been reading your entries via my reader for a couple weeks but now I’m going back to ground myself in your overarching principles and ideas.

    I certainly agree that having a plan is key. I believe my efforts and writing has focused more on the here and now – the first debt reduction step in your plan.

    It’ll be fun to ‘look up’ and better understand how your next steps can mesh with my current approach.


  11. @ Do You Dave Ramsey – Thanks; there’s definitely a ‘macro’ and a ‘micro’ happening here – Ramsey is focusing on what I call Making Money 101 (see other tabs on my home page), while I also look at what it will take to “get rich, stay rich” (i.e. MM101 + MM201 + MM301). However, you will find a huge conflict when it comes to debt reduction … the caveat being that my audience wants $X mill in Y years (where X > 2 and Y < 15).

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