Posts Tagged ‘Life Balance’

Woman Shares The One Decision That Made Her a Millionaire Before Age 40

Friday, October 3rd, 2014

millionaire roadWhile many women are not millionaires and don’t necessarily have aspirations of becoming millionaires, many women are interested in becoming financially independent and having financial freedom. The mistake that many women make is that they desire financial freedom and may even think they have it but still depend on either a job or a man to provide it. While having a great job with adequate pay is good, people lose their jobs all the time. The same applies to being with a man who is an excellent provider; unfortunately, some marriages do end in divorce.

Below, Laurie Itkin, writing for businessinsider.com shares the decision that helped make her a millionaire before the age of 40:

My grandparents on my father’s side were poor. I was 24 when my paternal grandmother died, and she left me $1,600. Although I wanted to spend that windfall on things that most young women like to spend money on (like clothes and shoes), I knew I needed to begin investing for my future. I was employed but had already been laid off twice and concluded that I couldn’t count on a man or a job to provide financial stability. I had to build a financial cushion myself.

In thinking about whether I would save or invest that $1,600, there was only one clear choice: invest in the stock market. I recalled an eye-opening chart presented by Wharton Professor Jeremy Siegel when I was studying finance that demonstrated that over the long run (despite its short term risk of going down) the stock market generated higher returns than other asset classes, such as bonds or certificates of deposit. Because I was in my mid-20s, I had quite a long time horizon and knew that stocks were the place I wanted to invest my cash.

The decision I made to invest that $1,600 (not merely save it) was the most important wealth-building decision I made in my life. It is the reason I became a millionaire before I turned 40, a feat that would not have been possible had I chosen to keep that money in the bank.

That’s why I feel sad when I read articles about the large numbers of millennials who are shunning the stock market and keeping their money in cash. It’s a mathematical fact that you can’t grow your money by keeping it in a mattress or in a bank account earning close to zero percent. But according to a recent Wells Fargo study, only half of millennial women agree that the stock market is the best place to invest for retirement, and only 9 percent are saving at least one-tenth of their income.

I’m doing my part to change that trend. If I can inspire just one more percent of women to not only save more of their income — but to invest it in the stock market — imagine the millions of dollars of wealth that we as women can build on our own.

Was it easy to go from $1,600 to $1 million in just 15 years? Did I get lucky on one stock pick that doubled in value every year? Of course not. I had to regularly add money I earned at work to my brokerage and retirement accounts. It wasn’t easy, but it also wasn’t as hard as you might think.

Read more: http://www.dailyworth.com/posts/2791-how-to-become-a-millionaire-on-your-own/#ixzz3F5lJoH2p