Rules of Investing - To gain from doing the right investment and getting your money doing the real work for you.
In order to be rich, there are many ways. There are gurus and master mentioned and I summarised base on what I know so far:
1. Get a very good paid job
2. Save most of your money
3. Invest you money in right way and also in long term
The above are the basic steps to be getting rich. However, what is rich does not apply to others. For me let me define and narrow down a bit. Getting Rich is to be have Passive Income for the rest of your life. That means you can no need to work 9 to 5 to earn the income to pay the bills.
Before any investment, you have to know why else you will not know what is the end and you will end up doing more and more. There are people who is very rich but still have to work very hard because they do not know when they want to stop.
So for investment; to get your money work for you, you must understand what is compounding effect. This is very important and will let you plan for your time.
For example, you want to reach a goal of 1 million dollar with 100,000 capital, you then must know how long base on the current interest rate you getting.
Let say you invest in REIT which can give you about 8% per annual, you will take about: 34.4 years
100,000 => 200,000 = 8.6 yrs
200,000 => 400,000 = 8.6 yrs
400,000 => 800,000 = 8.6 yrs
800,000 => 1,600,000 = 8.6 yrs
use rule 69. to double any investment, take 69 / by the interest per year.
So as you can see to be a millionaire is not that difficult.
So what do you need?
1. 100,000 dollar
2. investment return of 8% per year
3. 34 yrs
Thats it!
How to have item 1 & 2 is depend on yourself. I will touch on further.
Item 3 - I cannot help. If you can start early at the age of 20s, you can have a million by 54 yrs. That's simple.
Stay tune for me to talk more on Investment for next post
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