But Kinder Morgan has rewarded those who showed some faith in the company at the start of the year. Here is why the company should be a part of your wealth-building strategy.
Warren Buffett.Jason Reed/Reuters
The secrets of the super wealthy are something many people want to know. In fact, if you search for titles related to wealth on Amazon.com, you get a staggering 43,050 results.
Unfortunately, there’s no silver bullet to becoming the next Warren Buffett, Mark Zuckerberg or Jeff Bezos. But there are some wealth-building secrets that millionaires and billionaires used to help them get where they are. Here are six secrets to keep in mind when building your wealth.
To build a seven-figure net worth, you need more than a winning investing strategy and steady salary boosts (though both can help a lot). You also need the right mindset. Research shows that millionaires tend to share key habits and attitudes that have helped them amass wealth over a lifetime.
These winning habits were first identified by Thomas Stanley, co- author of The Millionaire Next Door. His daughter, Sarah Fallaw, is continuing his work as head of DataPoints, a behavioral research firm that analyzes wealth-building potential. These behaviors are linked to greater wealth potential for people of all ages and incomes, says Fallaw. Do you have the potential to be a millionaire? Take this quiz to find out. Then check out your results to learn more about these millionaire traitsand what you can do to develop them. Plus, get tips on how to get your head into the game so you can realize your millionaire dreams.
Ever take a look at the Forbes 400 annual listing of Americans with more than $1.7 billion in holdingsthere are only two Blacks listed. Even though we keep celebrating the fact that African Americans buying power reached $1.1 trillion in 2015, Black wealth still lags woefully behind that of white Americans. Due to a lack a wealth building in the Black communitywe tend to spend our money outside the community and dont save or invest as muchit will take Blacks in America hundreds of years to just to catch up to white wealth.
Lancaster poverty commission to hear Thursday about Richmond, Va.’s push to end segregation, reduce poverty
Thad Williamson, an associate professor at the University of Richmond, was the principal author of Richmonds poverty commission report. While on leave from the university, he was the first director of Richmonds new Office of Community Wealth Building.
Albert Einstein is credited as having said compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesnt, pays it.
While there is some conjecture over whether Einstein really did make this statement, its hard to deny that compound interest is indeed a very powerful, wealth building tool.
Heres a practical example which highlights the beauty of compounding your money.
Imagine you could save $6,000 per year – thats the equivalent of putting aside $500 every month.
From a standing start (let’s assume from age of 34) you begin setting aside $6,000 each year and investing it in the stock market.
For arguments sake, well figure you achieve a 10% return per annum (pa) on your investments – thats certainly no slouch for a return, but its also not an impossible achievement either.
Listed investment companies (LIC) Australian Leaders Fund Limited (ASX: ALF) and WAM Capital Limited (ASX: WAM) have achieved total shareholder returns (TSR) of 11.9% per annum (pa) and 9.7% pa respectively over the past 10 years.
Meanwhile, Magellan Financial Group Ltds (ASX: MFG) flagship global fund has returned 10.8% pa since inception 9 years ago.
The maths is quite straight forward…
An investment plan committing $6,000 every year for 30 years at a rate of 10% pa will grow thanks to the beauty of compounding into $1,091,661 by the time you are 65.
Who wants to retire a millionaire?
There are a few key takeaways from this example.
Firstly, it takes time to build wealth. The earlier you start and the longer you allow your wealth to compound the better.
Secondly, compounding is a must! That means not touching the money you put in and reinvesting all the profits too. Its worth noting that under this example only $186,000 of savings are contributed over those 30 years; the balance of $905,661 is all thanks to compounding.
Thirdly, returns matters and can make a big difference. Whilst 10% pa was used in this example, a review of the returns achieved by successful long-term investors such as Warren Buffett shows that even higher returns are possible. Taking the time to carefully construct a portfolio that will maximise your returns can make a huge difference to your wealth.
It would be naive to say that getting rich is easy. By utilising the above steps however, it certainly can be achievable.