The Simple Process of Getting Rich, Part 2
By Bob Moeller
WEAC Member Benefits
November 2001
Financial
Planning Seminars
Achieving
Financial Independence
This is Part 2 of an article on how to get rich. It is an article based
on my hundreds of meetings with members about to retire and the clues
I’ve picked up as to what separates the “rich” 55-year-olds
and those who will struggle in retirement. It is not a matter of luck.
First let’s take a quick review of the first three principles, which
I laid out in last month’s article, and then we’ll examine the
rest of the clues:
- Rich “about to retire” members had and have a plan. They
agree with each other, if married, and they follow their plan.
- They pick up the most advanced degrees quickly. They get a higher
income and higher retirement because of it.
- They avoid life insurance companies for such investments as tax-sheltered
annuities or single premium annuities. They buy only term insurance.
And now the final clues…
- Members on the way to getting rich know how they spend their money
and live within their means. They pay their credit cards off every month.
They do not have high-cost debt. Debt is in the form of college loans,
home mortgages, and home equity loans. They are conscious of interest
rates and have plans for debt repayment. They are proud of their spending
habits, realizing that by living within their means early in their career
they will build the ability to live much, much better in the last 30
or 40 years of their lives, and I don’t mean just retirement here.
Developing good patterns early on has meant that many of our members
are essentially living the good life from age 45 on.
- A key for most members in wealth building is they got started in
a good tax-sheltered annuity early and stuck with it no matter what.
In today’s world, the amount that can be sheltered is increasing
dramatically ($11,000 in 2002, plus Roth IRAs.) Basically, after paying
off high-cost debt and providing for your degree enhancement, this is
a crucial decision to make. Make sure your TSA is a good one regarding
sales charges, annual fees, etc. Read #3 again. Suggested minimum investment
amounts: In your 20s – 5% of your gross salary; in your 30s –
10%; 40s – 15%; 50s – 20%. Sometimes it will be difficult,
like when you have children in college. You can do it!
- Members who will be rich develop good money practices, maintain them,
and teach them to their children. They make sure their “daily interest”
money is invested in the highest-paying safe accounts. Their after-tax
investments in mutual funds will generally be in “no load”
funds. They use Money Market Mutual Funds or equivalent investments.
(These are different than the typical bank money funds). If they are
buying CDs, they shop for the best rate. They stay aware of possibilities
even though they may be using them sometime later. They realize that
the more they can do themselves financially, the less they will pay
someone else to do it. They never listen to phone pitches.
- Can you really follow all these tips, work in the schools, raise
kids etc.? This won’t be as hard as you think, especially if you
and your spouse (if married) agree on the approach. In fact, you will
benefit by earning a higher investment return, paying less in fees,
earning a higher salary, and having more in retirement. In 20 years,
you will be very proud.
- May I take this opportunity to suggest you come to one of the WEAC
Financial Planning seminars listed on this page. Phil Beavers and I
guarantee that we will not sell you anything! Then arrange an individual
meeting with me or Phil. To make an appointment, contact Diana Buchholz
at 1-800-362-8034, extension 253.
So, that’s it. Some key steps in getting rich. Practices that work.
I’ve seen the proof in hundreds of individual meetings with members.
Let it work for you!
Posted November 20, 2001