Get Rich-Guaranteed!

Oh how many times have we heard or had, “Get rich-guaranteed” implied during our lives. What’s the truth…can anyone guarantee you’ll be rich? Well…maybe.

Over the years we’ve chased all kinds of ways to get rich; and when I say rich, I really mean wealthy. Thomas J. Stanley and William D. Danko in their book, “The Millionaire Next Door” define wealthy based upon net worth. Their threshold was a net worth of one million dollars based upon assets minus liabilities equals net worth. The authors also emphasize most of the millionaires they interviewed were motivated by investing in APPRECIABLE assets—assets that grow in value vice inappreciable assets—assets that lose value. Think a home versus an automobile.

The first step is to walk into the nearest bathroom and look into the mirror. Take a good look at the person staring back and ask them…are they where they want to be financially? If you’re a numbers person, Stanley and Danko give a fairly simple formula to determine if you’re on the right track. Here it is: “Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by ten. This, less any inherited wealth, is what your net worth should be.”

How’d you do? Chances are if you’re like most Americans you’ve missed the mark. BUT DON’T GIVE UP HOPE! Knowing, they say, is half the battle and if you know you’re not where you should be then what you’ll need is a plan to get there. And that, my friends, is what we’ll discuss in my next blog, a plan to get from zero to hero.

How did you do on the net worth scale? Please leave a comment.

Keith is the resident writer and troublemaker at Empowered Pros.
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