Comments on: How to Get Rich Quickly!

By: jackowick

jackowick — Tue, 21 Jun 2011 20:36:30 +0000

@ #16 Thomas – 30 years is too long? If you start working at 20 full time and can retire at 50, you can do plenty.

Tom Cruise is 48. Brad Pitt is 47. Robert Redford is 74, so think about 20 years prior to that.

I think this comes down once again to people not wanting to wait…

By: donald t.

donald t. — Mon, 20 Jun 2011 17:42:18 +0000

Yes this is good advice – work for 45 years, squirrel away your income the whole time, and when you are ready to die, you will be rich (*disclaimer – rich in 2011 dollars, maybe not so rich in 2043 dollars)

By: lurker carl

lurker carl — Mon, 20 Jun 2011 14:39:22 +0000

If your thirty year savings goal begins at age 60, Thomas is correct. There is a simple solution for this. Just save about $400,000 each year for five years to make up for all that lost time.

By: Tom

Tom — Mon, 20 Jun 2011 12:26:06 +0000

Steve Martin said it best: the easiest way to become a millionaire is, first, get a million dollars…

By: getagrip

getagrip — Mon, 20 Jun 2011 11:45:24 +0000

Actually, if you are willing to really cut back what you think you “need” to live, you can be financially free in under ten years aka extreme early retirement (you can check out the blog to see how one guy did it). You have to really minimize your expenses and maximize your savings, but it can be done. The problem is that most of us, myself included, don’t want to go to that extreme. Thus Trent’s examples offer a reasonable middle ground as long as you keep in mind you are deciding on these wants and deciding on what you consider “rich”.

By: Rick

Rick — Mon, 20 Jun 2011 11:42:02 +0000

’30 years is still too long ‘
Thomas,
Instead of 30 years, how about 5 years ?
Check out Early Retirement Extreme by Jacob Lund Fisker – both the website and his book. He lived on 20% of his income, saved 80%, and retired in just over 5 years !

By: dave

dave — Mon, 20 Jun 2011 04:39:28 +0000

Im suprised at the negative comments. This is an easy to use approach. I would add to have an investment that the investor is interested in. This is crucial for a young investor. I always liekd investing in real estate because it is tangible. The investor can see his property and have pride in the ownership. Stocks are a piece of paper and less tangible. For a young investor, I like using an IRA to invest in real estate. Companies like http://www.capitalira.com are very effective at this.

Overall, great article! Thanks

By: The IIIrd

The IIIrd — Mon, 20 Jun 2011 04:17:23 +0000

Nice post Trent. I love how you put it “getting rich quickly” in drop dead simple terms we all can understand…

By: svwashout

svwashout — Mon, 20 Jun 2011 00:20:30 +0000

It worked for me. BTW I don’t call this “rich”, just financially independent.

By: Juliana

Juliana — Sun, 19 Jun 2011 20:29:08 +0000

Regardless of some of the more negative comments, this plan is a starting point that I find helpful. The recommendations give a perspective on what is possible. Thinking of possibles lead to more possibles. The word impossible only lead to a downward spiral. Starting somewhere is better than not having a plan at all. Thanks for putting it in a doable formula, Trent

By: Chere F

Chere F — Sun, 19 Jun 2011 16:57:12 +0000

I can attest to the truth of this article. In my mid20s I began putting HALF of EVERY RAISE into savings. Trust me, my raises weren’t much but I made it a habit. When I had enough to toss into a money market stock, I’d do that or something other investment. But hubby and I kept tossing that amount into savings.

We lived within our income (no excessive credit card amounts, drive my cars until they die, use up and reuse if possible, etc.) but we didn’t deprive ourselves. We took amazing (but economical) vacations – family camping tours of the Alps and in Greece. Home swapping with a new friend in France. Camping and canoeing all over the US. Many, many great memories shared with new and longtime friends.

I retired at 49, hubby retired at 55 to make sure we have health insurance until Medicare kicked in. Our time is our own to do as we wish. We’re doing much the same as before.

We still live frugally. Recently we spent 4 weeks in CA dog/house sitting for a new friend who needed someone during a hospital stay. We’ve been invited back anytime – just to visit and stay and hope my new friends visit me in FL sometime. Later this year we’re camping and canoeing 4wks in Utah w/ friends.

It wasn’t hard once we got in the savings habit – and kicked the habit of “buying buying buying” stuff we didn’t need and really didn’t want. Even with our frugality our 4b2b home is packed to the rafters with too much stuff – we are now trying to downsize and get rid of all this “stuff”. I’m giving lots away to friends (via FBook) that say they could use it.

By: valleycat1

valleycat1 — Sun, 19 Jun 2011 14:52:44 +0000

#10 Thomas – In Trent’s post, he posits starting at age 25, so taking 30 years brings his hypothetical person to 55. Do you seriously consider a 55 year old “too fragile” to enjoy life? I’m beyond that & far from being on life support! I’m guessing you didn’t start at 25 and now need to accelerate your retirement funds. I’d like to see your (or anyone’s) plan for achieving financial independence in 5-10 years – I doubt most people can or would be willing to save/invest for only 5-10 years and end up with enough to live on for the rest of their lives.

By: lurker carl

lurker carl — Sun, 19 Jun 2011 13:21:30 +0000

#10 Thomas – If your thirty year savings goal begins at age 60, you are correct. There is a simple solution for this. Just save about $400,000 each year for five years to make up for all that lost time.

By: Walter

Walter — Sun, 19 Jun 2011 12:53:26 +0000

Wish I had started this when I was younger. This is great advice and I hope you will soon do a artical on creating income with investments after retirement for us lower income folks.

By: deRuiter

deRuiter — Sun, 19 Jun 2011 10:53:13 +0000

Dear Thomas #10. This is easy, marry someone who is rich, don’t sign the prenup, and you will be rich over night.

By: Thomas

Thomas — Sun, 19 Jun 2011 09:19:12 +0000

30 years is still too long – after that ammount of time, most people are too fragile to actualy enjoy that kind of money and will spent most of it on just keeping them alive.

What we’re looking for is achieve this goal in 5-10 years, so we can enjoy it in this lifetime.

By: Steve Linderman

Steve Linderman — Sun, 19 Jun 2011 07:39:26 +0000

My first comment after reading your site for years. Thanks for the great article. I have paid down debt from 22,325 to 9,875 (yea, I rounded it off). The Simple Dollar has given me inspiration when I couldn’t find it any place else. Thanks!

By: almost there

almost there — Sun, 19 Jun 2011 06:01:45 +0000

#6, Kim this is just on paper “what if” by Trent. He assumes a 25% contribution rate earning 7% but once the nest egg has grown to 800K dollars it earns 5 percent return and the person earns the original $40K in interest that his pay was at the start 23 years ago. It doesn’t factor in inflation or the growth of wages, etc. Just showing the younger you start and the more you save the better off you will be. Kind if like a life insurance policy quote I am looking at in front of me. If I pay $639.80 per month for 20 years (total premiums $153.553) It would earn a guaranteed 4.5% having a cash surrender value of over $206 thousand dollars in 20 years time and no more premiums. By 33 years of coverage it would be guaranteed cash value of over $271,000. Where they hook you is with the projected current earnings rate of 6.875% and the cash surrender value of over $500 thousand dollars with a death benefit of over $591,000 dollars on a $350,00 face value policy. In the past 18 years the earnings rate has fallen from 8.5% to the current rate. Not bad but a good example of showing one cannot base future earnings on current ones.

By: Other Jonathan

Other Jonathan — Sun, 19 Jun 2011 05:43:58 +0000

Kim – If you have 20 times your income, that means that one year of income is equal to 5% of your investments. If your investments return 5% every year, you can withdraw that amount each year (equal to your original income) and still have 20 times your income remaining invested.

The “rule of thumb” is quite conservative, in my opinion, but accounts for the fact that investment returns are not necessarily that consistent (see the past 4 years). If you’re living off of your investments, you have to draw from them in good times and in bad. If you had 20x your income in 2007, it may have gone down to only 12x your income in 2008; but you still need to withdraw the same amount, so you really reduced your net worth by 8.5% that year, not 5%.

One quibble – it should read “20 times your annual EXPENSES.”

By: *pol

*pol — Sun, 19 Jun 2011 05:27:14 +0000

I love this post, it’s got a great kick in the butt to remind me that there is a reward to this saving thing!