A lot of people want to get rich, but they are not certain how to invest their money properly. In this guide, there are some things I am going to tell you about investing and your money which may shock you, so hang tight.
The first thing you need to know that investing your money through typical means is not a sure-fire way to get rich. Just look at the way the stock market has performed over the last few years and you know exactly what I am talking about.
There are a lot of people who read that and would say something like “you have to take into consideration the performance of the stock over the course of many years”. Okay, why don’t we do that, and also account for inflation? What you will find is if you invested 1000 dollars in 1966, you would have about $2000-$3000 in comparably-valued money.
What I mean by this is that while your $1,000 dollars may have turned into $20,000, that $20,000 today only buys about what you could get for $2000-$3000 in 1966. A car back then would cost $2000. A car today costs $17000. This is what inflation does to us.
When you consider it that way, what we are looking at is only doubling or tripling your money. Most families anywhere in the world are lucky to save $10,000 a year. If you save that much every year, and it triples by the time you retire, we are talking about saving a lot of money every month only to retire and be slightly wealthy, 40 years later, when you are so old you do not have much time left to enjoy your money.
This is not the way to get rich. The major problem with the whole stock market is that there is no barrier to entry in the market. It takes no specialized skill to buy stock – you just do it. Unless you already have millions of dollars, you would get a much bigger return on your investment by investing into a business and using some of your time.
Of course, there is more risk involved here. A lot of businesses fail. But the truth is that millionaires and billionaires cannot invest the time that you can into a small business, and as such, they are not real competitors to smaller, local adventures. This is just something to think about if you are interested in the creation of wealth.