How do people get very rich?

Don't know about the stressed part.

Work more?...................Perhaps, but I would feel confident in saying that those wealthy people that do work, do so by choice, not out of necessity.

 

What's 'normal' investing? Buying resi I.P.s? Shares? What? What about all the people out there who don't have a large income? I don't have a large income and I'm doing very well thank you very much.

Have you ever heard the saying 'Those who say it can't be done should not get in the way of those who are doing it'?

Now, I ask you respectfully, would you mind getting out of the way, thanks.

Mark

 

If you don't mind me asking Mark, what is your wealth creation strategy? Because I'm not on a huge salary either. I'm able to save about $300 a week.

 

eddyl, Mark is into property development, so this is why I don't consider those activities he does as investing.

Mark is getting confused with what running a business consists of and what is a passive investment. To clarify, investing is purchasing an asset and holding it for the longer term with the view it will appreciate in value. This can be either shares in a business, buying property, plantations, paintings, coin, gold etc etc. It is a passive task which is generally set and forget for a period of time.

If you choose to develop either property or a business, or trade art/coin etc then this now becomes a job, or running of a business. Mark I think is building units and subdividing, this is what a builder does.. would we consider builders as investors? No. Mark is using his profits however to build up enough investments so as he can get a level of passive income from them, and leave them as investments not needing his time and energy on a regular basis.

With your $300 per week, your best bet is to funnel it into a passive investment, like shares or direct property. Direct property will give you the highest form of leverage to get you started. With this money you can have the benefits of holding a $300,000 property, which should grow at 8% PA. This is a $24000 capital gain each year. Dont forget the $10,000 per year 'loss' your making on holding the property so your net result is $14,000 PA. The tax man will also help you by refunding you $3000 PA in tax so your annual after tax loss drops down to $7000 PA to get a $24,000 PA capital gain. Thats a good result!

You should also consider putting some of your cash into a quality managed funds, or buy some quality blue chip shares as regularly as possible. You will need a 10 year view for this plan, and then you will be rewarded. Will this make you a $10 million man? No, but it will set you up so you will be better off than the average joe.

 

Just to give you a idea, your $300 per week will turn into $340,000 in 10 years time, assuming a compound 14%PA return.

You could also purchase a property for $300,000 which will double in 10 years time, and essentially also give you a $300,000 return.

You can employ some more aggressive tasks like gearing, developing property, trading etc to try to get a better end result.

ING DIRECT Australia - Calculators - Regular Savings Calculator

 

I'm in property development now? Thanks for letting me know, I'll have to inform myself of my business ventures.

eddyl, I don't discuss my investment strategies online. I only discuss them with a few trusted advisers/mentors.

Mark

 

Thanks for your thoughts CRC

 

Eddyl, there's a saying among pasturalists - those with the largest hats have the smallest properties. So don't be put off if you come across people who are big on brag and small on details. It doesn't necessarily amount to much

 

Hey there guys just thought I would share some thoughts, this is quite an interesting topic on conversation! I myself believe that business in any way, shape or form is somehow the answer to become ridiculously wealthy!

There are many ways that the internet has helped with this aswell, making it much easier and more cost effective to make money but as Sim said before, it takes alot of gumption, hard work and most of all, a Dream.

This is what will some day (hopefully before I'm 21 =) ) get me to being rich, that mental image of my dream and where I want to be.

I am actually looking into a very interesting business opportunity myself, haven't started yet but if anyones interested in more information and what its about PM me. I'd love to be able to help you guys add another income stream for further investing and financial growth!

Cheers

 

I think the other key to getting rich is to start early.. if you can use your 20's to get your first say $300k, then you have a nice stepping stone to achieve lots in your 30's, and then by your 40's your sitting nice..

You keep on compounding your 300k as in my example above from year 10 to year 20, the numbers start to get very nice! you start to see figures like 1.7million in 20 years time!

But 1.7 million in 20 years will probably not even get you a decent house.. it doesn't buy much these days even!

 

I wonder who we are talking about here??