Newspaper article THE JOURNAL RECORD

Hitting the Jackpot

Newspaper article THE JOURNAL RECORD

Hitting the Jackpot

Article excerpt

Becoming a millionaire is surprisingly easy.

Any American teen-ager with average intelligence and decent health can plan to retire with more than $1 million in assets.

An article in the August/September issue of The Futurist magazine lays out the simple guidelines for retiring rich.

To guarantee "future wealth," just get a solid education, work hard, invest early, stay married and don't squander money on frivolous purchases.

But could it really be that simple? Could a blue-collar worker with no college degree or inheritance really retire as a millionaire?

Absolutely.

Here's how, based on financial calculations in The Futurist:

Simply saving

Let's say a teen-ager finishes high school and gets a job. He lives lean so he can put $500 a year into a savings account and still spend about $3,000 over a few years to pay for the training to become an auto mechanic.

Now at age 22, he has $2,000 in savings and lots of opportunities to earn $30,000 a year as a mechanic. If he puts his savings into a mutual fund paying a 10 percent compounded rate of return (equal to the appreciation of the stock market over the last 50 years), he will collect $194,000 from that one-time investment at age 70.

Then assume our young mechanic can average a 2 percent annual pay raise (after adjusting for inflation) throughout his career.

If he saves just a tenth of his income each year and invests it conservatively for a 6 percent rate of return, he'll have $1.1 million at age 70. Throw in the $194,000 from his initial investment, and he's living on a lake, golfing every day and driving a big luxury car.

If he stays married to someone who earns and saves a similar amount, the couple will be multimillionaires, and that's not even counting the equity they might have in a house.

Without getting any inheritance, without worrying about Social Security, without depending on his boss for a pension plan, our mechanic will retire wealthy. …

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