Since I’m a member of the Financial Planning Association, I receive a complementary copy of “Money” magazine each month. Normally I just give it a quick skim, since it’s a bit… below my technical level.* This month, however, was different. The article that really caught my attention was “How to Reach One Million Dollars” by Carolyn Bigda, Lisa Gibbs, Elaine Pofeldt, and Donna Rosato. True to its name, the articles are jam-packed with all sorts of helpful advice on becoming a millionaire. Here are a couple highlights I really liked:
- Hold Real Estate – The article suggests that one hold at least three rental properties, and goes on to show a twenty-year chart moving up to over $1 million in equity and rental profits. While I can’t comment on the validity of the chart, I can affirm that a substantial number of wealth people who I’ve met have invested, in some capacity, in real estate. Some invest directly in rental property, but some also invest indirectly in quality real estate through real estate investment trusts. While the vehicle differs from person to person and situation to situation, I can affirm that I have frequently spotted real estate in millionaire portfolios. Does real estate belong in your portfolio? Talk to your financial planner to find out.
- Control Investment Costs – I like this. Something most people don’t think about is how much their investments cost them each year. Once you add up expense ratios, commissions, account fees and the like, you can get up to a pretty significant drain on the return.
There’s a lot more at the website, so go check it out. Generally, most of the info there generally agrees with my personal experience. Since there’s some investment advice in there, don’t forget to consult your financial planner so your personal investments match your personal needs.
* Much in the same way personal trainers and nutritionists (probably) don’t really read Self Magazine. Professionals read professional publications.