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To hit a million dollars.

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Subject: Career question for you

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5 answers


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Samantha’s Answer

Then start saving now. 50% of your pay goes to daily living expenses, 30% of your pay is free to spend, and 20% of your pay goes into savings. I have some in stocks and some in a retirement account.
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Paul’s Answer

The answers provided are all correct but I would also add to to keep the amount of debt you take on to a minimum. Any interest you have to pay to the bank is money you could be saving. For example, minimize your usage of credit cards by not charging more than you can pay off in 30 days. Also, if you need to borrow money for college, only borrow what you need and consider a less expensive school. When it's time to buy a car, consider a used car made by a reliable manufacturer. This will minimize the amount of the car loan as well as costly repairs in the future.
Great point about only borrowing what you need for college. Nowadays some student borrow so much, its like they have a mortgage payment by the time they graduate. So unfortunate. Ben Gof
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Fred’s Answer

Agree. There will always be people touting the latest/greatest investment scheme, but if you consistently save money - starting now - into a low cost index fund that tracks the S&P 500 and always take full advantage of any company 401k match...it's hard to argue with the 8th wonder of the world (compound interest):

https://www.inc.com/jory-mackay/1-simple-technique-made-warren-buffett-billions-he.html

https://www.moneyunder30.com/power-of-compound-interest
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Ben’s Answer

Over 70% of millionaires in this country got there from real estate, so that would be an important part of your portfolio if your looking to gain wealth. I have purchased properties and rented them out over the years and have friends that do the same. In doing so, the tenant is paying down my mortgage. However, the beauty of this strategy is that you can also build equity as the property value rises! Do some research on being a landlord to learn more and understand what it means to rent out properties.

Another path I suggest would be to invest in a Roth IRA or Mutual Fund. (Google them both to learn more) Contribute to the fund monthly. A mutual fund\IRA provide instant diversification in the stock market. If the fund goes down, don't panic, continue to contribute because it means you are buying more shares at a lower price and it will grow over time. The Stock market averages an 8% yearly return over the last 50 years.

If you start to work in the Corporate world, sign up for the company's 401K. This is similar to a Roth IRA and the company usually matches up to 6% of your weekly contribution from your paycheck, so if you don't sign up you leaving free money on the table. They will take your contribution directly from your paycheck and you don't even feel its missing. One of my friends recently told me he has been in his company's 401K for about 20 years and has almost $1.5M in there now!

Lastly, someone already mentioned to avoid unnecessary spending and bad credit card debt so I wont go into detail on that, but it is very sound advice. However, be very cautious about investing in Stocks on your own. At some point some of your friends will tell you that they made 2 thousand dollars or more in just a few days of stock trading and it is probably true. What they don't tell you is when they lose thousands of dollars. If you do decide you want to trade stocks on your own, do a lot of research, open an account with fake money and practice for 6 months before you venture on your own.

If you focus, follow a good plan and manage your risk, you will do well. The opportunities are there and I'm sure you'll be very successful!
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Nicholas’s Answer

Hi Shafal, I am going to answer your question in a slightly different approach. When I was your age, I thought I was going to be a millionaire with several houses and a family by the time I was 30 years old. I am now 36, and just starting a family in San Francisco. Don’t be so focused on your net worth, or how much money you have in your bank account. Financial security does allow you more freedom and flexibility to travel, explore, dream, and discover, but $1 million dollars won’t guarantee your future happiness or success in life. First, invest in yourself by earning a college degree and pursuing a career that aligns with your interests and skill sets. Be smart about how you spend your money and try to live within your budget - something that I struggled with into my late 20s. There are some great books on living and investing - The Automatic Millionaire; How to Win Friends and Influence People; Think & Grow Rich; and The 7 Habits of Highly Effective People. Read as much as you can and connect with as many people as you can. Good luck!
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