Making Money and How to Become a Millionaire
Investing in this Economy is the Only Path to Make Money and Wealth
Apr 12, 2009
The offers are numerous and persistent. They tell you that one can “make millions” through work at home ventures, franchises or self-made businesses, or Multi-Level Marketing (MLM) programs.
There are programs to surf the net, read email, or do assembly jobs. On the surface many sound very appealing, but in reality most fail and many that do work do so as a pyramid mechanism with the very few at the top reaping the financial rewards while others lose their investments.
Caveat Emptor and Internet Businesses
Caveat emptor is Latin for "Let the buyer beware.” It applies as much in the world of business as it does in consumerism.
In the article, “Major Internet Fraud Investigation Reveals Shocking Truth You Must Know Before Choosing A Work-At-Home Program”, (Dr. Richard Andrew Stera, Chairman, SiteReviewAuthority.org, April 29, 2009) an examination of 172 work at home websites were vigorously tested. It was found that 141 ranked so low that they were considered scams, and only 32 fulfilled their promise to be able to deliver money. Of these, only three demonstrated outstanding performance.
According to author Robert Fitzpatrick, people are led to believe that Multi-Level-Marketing programs are successful if only one faithfully believes in the system and adheres to that model. Fitzpatrick points out, however, that the MLM model, as practiced by most companies, “is a marketplace hoax” ("The 10 Big Lies of Multi-Level Marketing," Robert L. FitzPatrick, falseprofits.com). In one “program” it was found that 88 percent of all participants lost their money. He states that often these offerings are either fraudulent or fail to meet expectations, and some have deceptive earnings claims, trade practices, or false advertising.
This is not to say that all such MLM ventures are schemes. In the article “Anti-MLM Zealots” (Len Clements, Market Wave, 2005, 2007) the author points out that there are some 2,100 MLM companies and one cannot state that all are fraudulent or unsuccessful. In fact, there are “dozens of MLM companies over ten years old”, including Herbalife, Mary Kay Cosmetics, and Amway.
Franchises are often said to be more successful than other business ventures. But according to the article “The Truth About Franchising” (Mark Munday, ZeroMillion.com - The Top Entrepreneurship Resource Online), if one is considering buying a franchise, he or she should not believe everything told and should examine the records carefully. The article reports that due to harsh realities in the business world, only about 62% of franchised businesses survive after four years of operation. It is said that it would be best to buy a franchise from an established company with a history of success, and with strict criteria for franchise location and operations. Even here, however, upfront costs, hidden fees, and company restrictions can sour what seems to be an otherwise lucrative opportunity.
Even thoroughly planned, well funded and legitimate businesses frequently fail. According to the Small Business Administration, each year about 600,000 businesses start, and over 50% of these small businesses will fail. Irrespective of having sound business plans, good marketing, hard work and an appropriate market niche, businesses fail at a high rate often leaving owners and investors in debt.
Investing is the Way for Most to Get Rich or Become a Millionaire
However, there is a legitimate and simple plan where an average person could become a millionaire by the time he or she retires. Immediately upon entering the workforce, a young adult should invest the highest percentage of wages possible into an Individual Retirement Account (IRA), Simplified Employee Pension plan (SEP), or into a 401 (k) plan. These vehicles allow long term savings for retirement purposes while providing income tax advantages. Investments and savings made in one’s early 20’s have much more growth potential than when made in later life. The interest from early onset investments compounds, and these returns further compound and continue to increase until retirement.
For example, after college a person, age 22, enters into the workforce and starts a 401 (k) tax shelter contributing $5,000 per year (pre-tax dollars) into that account. Assume that the account returns 7 1/2 percent on the investment, the contributions continue annually, and no monies are withdrawn prematurely. With compounded interest, by the time the individual retires at age 62 that account has accumulated $1,258,873. If he/she retires at age 65 he or she has accumulated $1,590,194. The individual retires as a millionaire to enjoy the golden years with resources for comfort and a high quality senior life.
Interest rates do fluctuate and if low, will rise again. As such, this plan can be modified and still be worthwhile. The key is to start the investment while young and invest as much as possible especially in those early years.
Get Real Wealth - Real Money - Real Income
For the vast majority of people, there are no fast and easy get rich quick schemes. One needs to be aware as many internet based programs are either fraudulent or impractical.
Getting rich is really about earning money and living beneath your means. It is about setting aside as much as possible, as early as possible, as consistently as possible, at the best rate possible, for as long as possible. If needed, work a part time job in addition to the regular job, and dedicate those earnings totally and directly into a retirement plan. Even with adjustments in the interest rates, with this simple formula over the long term one can earn a significant return on the investment for retirement.
Resources
The Top Five Ways to Become a Millionaire
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