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Why take this course?

Most people work a lifetime and have little to show for it when they retire. Why? The primary reason is they don't have a plan for their personal finances beyond paying next month's bills. With proper planning, discipline, and enough time, it is possible to retire with a nest egg of a million dollars or more.

The Million Dollar Question

It's been said you can't be too thin, too rich, or too good looking. Is it hard to become rich? Let me answer that question with another question. Is it difficult to lose weight? For most people the answer is both yes and no. The theory of weight loss is simple. Eat fewer calories than you burn. If you eat 500 calories less a day than you burn, you will lose one about one pound a week. What could be simpler, by doing essentially nothing, you lose weight! However, if you ask someone who has been on a diet if it's easy to lose weight, they will tell you "No way!". While the theory is simple, the practice is hard and can take a long time. Similarly, the road to becoming well off is theoretically simple, but as in losing weight, it can take both a large amount of discipline and a long time.

Let's Go!

There are four main components to generating wealth.
  • Time
  • Money (to invest)
  • A Plan
  • Discipline
Depending on your personal circumstances, you may already be on your way towards greater wealth. Lets briefly review each of the four components to understand why they are important.


While each of the four elements is important, time perhaps has the most influence and is the one you have the least control over. If you are 64 years old and plan to retire at 65, there's nothing you can do to get additional time. The effect of time, simply stated, is this: The longer your time horizon, the more likely you will succeed. If you try to turn $100,000 into $1,000,000 within a year, you will almost certainly fail. By the same token, if you have 30 years, you will almost certainly succeed. Yes, it's POSSIBLE to turn a small amount of money into a large amount in a short time frame. You can turn $100,000, or even $1 into a million dollars in less than an hour by going to a casino in Las Vegas and being very very lucky. The reality is you are much more likely to leave flat broke than with that million dollars. A general rule is the higher the return you expect on an investment, the greater the chance you will lose money. For example, when you buy a lottery ticket, the potential payoff (return) is astronomical. The chance you will lose your entire investment is very high. If you put your money in a savings account at a bank, the return is quite low, but you are practically guaranteed to get both the expected return as well as the original investment back.

One more thing while we're on the topic of high risk investing. Which do you think is more fun, betting $10 at Las Vegas or putting $10 into a savings account. If you're like most people gambling is much more exciting than savings and can be more fun. High risk "investing" is often tantamount to gambling, but with less of a stigma than playing cards or dice. There is a certain thrill associated with taking risks which can make ordinary investments seem boring. Frankly, investing for the long term can be kind of boring. Slowly, but surely, building your net worth one brick at a time. It's sometimes only after you've put in your effort over many years that you can stand back and appreciate what you've done.

Here is an example of the power of time in investing. When you are 20 years old, you invest $1,000 in a retirement account yielding 8% interest. The next year you do the same, and the next for a total of 10 years until you are 30. You then stop investing in your retirement account. Your twin brother, contributes $1,000 a year to his retirement account, but instead of starting when he is 20, he starts at age 30 and continues to add $1,000 every year and never stops. How long will it take your twin to have as much in his retirement account as you? The surprising answer is your twin will never catch you even if he keeps adding $1,000 a year for the next 1,000 years. The 10 year head start combined with the compounding power of interest will keep you in the lead forever.


Like time, more money is better than less money. It's a lot easier to turn $100,000 into million than $10 into a million. The old saying "It takes money to make money" is all too true. You don't need to start with a lot of money, but you have to start with something. You should plan to make at least small regular contributions towards your wealth program, and ideally, you will gradually increase your contributions over time. Even a modest initial investment can yield a large nest egg if the money is invested wisely and for a long enough period of time.

A Plan

Dr. Laurence Peter, author of The Peter Principle: Why things always go wrong said "If you don't know where you are going, you will probably end up somewhere else." If you don't have a plan for your finances, when you go to retire, there's a pretty good chance you won't be where you need to be. If you end up in the wrong place, then there won't be enough time to correct the situation. In order to make the optimum use of your time, you must have a plan and constantly monitor progress against the plan.

For most people the basic elements of a plan will be the following:

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