This special 7-day online blog event is brought to you by Biba Pedron from Your Business in Style. Today I introduce you to Bonnie Gortler from https://www.bonniegortler.com
Do you wish to be a millionaire but don’t know where to start? The first million might be the hardest but with the right steps in play you can achieve this goal with ease. The key to reaching your first million is all in the planning. You spend many hours of your life working hard for your money, so for most, gambling in Vegas is out of the question simply because the chance of losing your hard earned money is too great.
Get rich quick schemes might get you that million fast or it may be a quick trip to the bankruptcy court. Although investing in diversified portfolios takes patience and time, your patience is rewarded by a less risky investment through planning that nets long term gains. Investing is about taking small calculated steps toward implementing your plan. Belief is also key since you will have to be in it for the long term. Which leads us to our first key concept called capital preservation and it is here where we are going to explore the idea of wealth accumulation but with an attention to capital preservation. No worries, read on as I explain in detail how this concept can move you closer to your first million.
One way to achieve the goal to have $1,000,000 is by investing in the stock market where there are always opportunities of wealth accumulation with a lower risk. Years ago, it was easier making money by keeping your funds in the money market of a quality mutual fund or by purchasing long term CD’s and where you could achieve a good rate of return on your investment with little or no risk. The 80’s and 90’s were the best decade for quick growth on your investment where people some investors made 30-50% on their money. Now, the market climate is different. Money markets are paying less than 1%, and the last decade the market virtually went nowhere and no money was made. You need to start somewhere. Are you aware of the power of compounding? Money makes money!
To understand how to make money in investments we will first have to define the second key concept, compounding interest. Compounding interest is the idea that the interest earned in an account can then be reinvested and will then also earn interest on itself. Below are examples on how compounding interest will help you plan your investment in order to reach a million dollars.
Example 1: If you can make an initial investment of $10,000, and were able to get a 6% annual rate of return for 20 years you would have $32,071.35 at the end of 20 years. This is illustrated by the graph below. Of course we’ve made the assumption that there were no withdrawals or deposits during this time. After 30 years with the same assumptions you can expect a portfolio value of $57,434.91.
THE MILLION DOLLAR CONCEPT
After the previous example you may still not understand how a million dollars can be possible with an initial investment of just $10,000, so we will continue our example with a few changes. Imagine, with a bit of discipline on what you spend, perhaps less coffee or going out to dinner with your family and maybe with annual increases in salary, you can add $26,312.72 each year to your initial investment of $10,000 with the assumption of the same 6% annual rate of return. This would grow to $1,000,000 in 20 years as illustrated in the graph below.
The same million could be achieved if you were to invest for 30 years instead of 20. By extending the time of investment you can contribute less to reach the same result, so by contributing $11,922.43 a year for 30 years you can also reach a million dollars.
The magic of compounding is the million dollar concept. By investing $10,000 initially and by adding just a little more, $11,922.43, than your initial value each year you can have a million in your portfolio at the end of 30 years. You’ve also learned that if the time span of investment were less than the contributions would have to increase in order to match the same ending portfolio value. There is of course no perfect investment with guarantee of growth each year, but there are investment choices that are better than others. Gambling is not a viable option. Money market funds, CDs, and short-term bonds do not offer much in return of investment. You will notice that within this economic climate diversifying among different types of securities will give you the chance to meet the return you require but it will take time. Segregate funds now to implement a strategy for your future that will compound your money so you can have future financial stability within the Million Dollar Concept.
Bonnie Gortler is a successful stock market guru who is passionate about helping people reach their dreams, persevere, and live life to the fullest. She has successfully lost 65 pounds through her shift of living a healthier lifestyle focused on personal growth, mindful eating & exercising. Bonnie invites you to visit her blog where she posts weekly on the topics of business and health & wellness. Feel free to download, Twitter Magic https://bonniegortler.com/, her FREE informative straightforward guide packed with great tips that will allow you to make friends, build lifelong connections, and grow your business.
Disclaimer: This is a hypothetical result and is not meant to represent the actual performance of any particular investment. Future results cannot be guaranteed.
Although the information is made with a sincere effort for accuracy, it is not guaranteed either in any form that the above information is a statement of fact, of opinion, or the result of following any of the recommendations made herein. Readers are encouraged to meet with their own advisors to consider the suitability of investments discussed above for their own particular situations and for determination of their own risk levels.