Too Dumb To Become A Millionaire?

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[The following is a partial transcript of this episode of The Scott Alan Turner Show. Listen to the full episode to hear this story, listener questions, money hacks, and inspiring stories of people that are changing their financial lives. Subscribe to the free podcast on iTunes or Google Play]

In This Episode / Listener Questions

  • What do you do when people in your life don’t believe in your dreams? Can ordinary people really build wealth?
  • What to consider when picking a 529 college savings plan
  • I was let go of my job. How should I handle my money until I find a new one (Ed, Columbia, SC)
  • How to setup a business partnership (Anthony)
  • Is it a good idea to rent a vehicle before buying (Colleen)
  • Did you know Lada Gaga was once bankrupt?
  • How can you watch local news without cable?
  • Should I take out Roth money to buy a rental mobile home (Retirement Cash)
  • I’m having trouble with my credit and income (Cassidy)
  • How can I make money at forex (Kelvin)

Resources/links:

Are you smarter than a millionaire? Or someone who thinks they could be a millionaire. Some non-millionaires think so. Here’s a story from Chevy:

Chevy,

Shorty story about your live video. I was watching one about a week ago or so, and one of the guys at work was wondering what I was listening to. Everyone gives me a hard time. They make fun of me thinking it’s possible to become a millionaire. Which is a very long shot, but for me it’s a goal to have that when I retire, and it will not be from work. LOL.

We ended up arguing over this topic. One of my co-workers is in his 40’s and doesn’t think it’s possible. His only savings are in a 401(k).

He thinks I’m too dumb to do it, and that I’ll grow up someday and find out. It will never be easy, but it is a possibility.

I tell them everytime, just give me 20-30 years. I can’t wait to prove it to you.

I mentioned compounding. Compounding is how it’s going to happen.

So now everyday they make jokes about it.

It’s just a different way of motivating me.

Here’s who’s dumb. Me as a college senior laughing at my professor. Dr. Muchado when he told me about saving money and compound interest, I laughed at him. In his face. I guess I was smarter at 20 then I am now at age 35. Nope, that’s Thor again. Handsome devil. You see I’ve been the laugh-ee. Back then I thought the professor was dumb. Save 10% at age 20? I’ll just save 20% when I’m 40. That is what I said to him. Little did I know. Little do your co-workers know. Little do we all know – until they day comes – when we do know.

For the price of a car payment and a few trips to a Subway sandwich shop each month, you’ll become rich if you invest that money.

Well how much? How long?

Only you can say. How much are you going to save? How long are you going to save it?

It’s kinda like, if someone wants to lose 52 pounds in one year, how much do they have to lose? A pound a week.

If they want to lose 104 pounds in two years. How much do they have to lose? A pound a week.

How about 104 pounds in one year. All together now – two pounds a week. You got that right. No fancy financial calculator. No common core math.

Discipline + Time = Total Wealth

The younger you start, the less each month. If it’s for a long time.

  • In your 20’s. Just build the habit. Get the debts paid off. Live life while you have few responsibilities. Save some too. Get the company 401(k) match. Max out a Roth.
  • In your 30’s. Your banking more money. Kick it up into high gear. More income. Save more. Avoid lifestyle creep.
  • In your’ 40’s. Generally, the rule of thumb. 3x your household income in retirement savings. $60,000 a year would be $180,000 in retirement savings. That habit gets you to $1M by age 65.
  • In your 50’s. Kids are gone. Or kick them out. Or charge them rent. These are your highest earning years. And you’ll be investing for 30-40 more years. At least if you’re following good advice. You can do catch-ups.
  • 60’s. Spending it. Going on that Alaskan cruise to ride the whales, pet the bears, slide down the glaciers.

You know this already, but you see some people don’t believe. Because they look at wealth like looking up at Mt. Everest. It’s tall. It’s cold. Someone might die. Meh, I’ll stay at base camp near the fire.

Think of it like this. If you took Mt. Everest, squashed it so it was flat, it’s about the size of a 10k race. 5+ miles.

99.9% of people probably walk that far over 2-3 days depending on your job. My nurse friends walk 6 miles a day at the hospital.

You must be thinking – wait a minute, Everest is a mountain, not a flat 10k race. Well, isn’t it true you can finish a 10k race by walking? One step at a time.

That’s how you become a millionaire. $100 at a time. Takes 10,000 steps to finish a 10k. You save $100 ten-thousand times, you get $1,000,000.

10,000, that’s a lot!

The nice thing about investing is depending on when you start, maybe you save $100 two-thousand times. The compounding kicks in with investing. It’s kinda like sherpas hauling someone’s lazy body up the mountain. It’s like cheating! But it’s legal. And it works. Invest and make your money cheat for you. Cheat to win.

Or it’s like getting picked up at mile one by a golf cart in a 10k race. I ran a mile! I’m taking the golf cart the rest of the way.

Not so hard now, right? Is that more believable than climbing Everest? Walk a mile and then getting picked up by a golf cart? Yet it’s the same distance.

When you break the big things down into manageable pieces, then you’ll see how the pieces fit.

Dumb, is seeing it on paper, and not doing it. Or not listening to your college professor. Or not following what I teach. Realizing it can be as little as $100 a month. It could be $1,000, it depends on your age, stage, and wage. Then believing to yourself ‘I can save that’.

It’s never too late. Today is the best day to start. Yesterday would have been better. Tomorrow is 2nd best. If someone is starting late, some goals might need to be adjusted. They might be crossing the finish line in a 2016 golf cart, and not the neon blue golf cart with the jacked-up tires and built in refrigerator. Finishing is more important than coming out of the starting gate at top speed.

There is a link in the show notes about the line to get to the summit of Mt. Everest this past week. Check out the picture and share that with people. That’s picture is crazy. It’s also crazy to think – it’s 10,000 steps, give or take a sherpa carrying you.

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