Do I need to invest to become millionaire?
"I get the sense that this is a ""the world is unfair; there's no way I can succeed"" question, so let's back up a few steps. Income is the starting point to all of this.  That could be a job (or jobs), or running your own business. From there, you can do four things with your income: Obviously Spend and Give do not provide a monetary return - they give a return in other ways, such as quality of life, helping others, etc. Save gives you reserves for future expenses, but it does not provide growth. So that just leaves Invest.  You seem to be focused on stock market investments, which you are right, take a very long time to grow, although you can get returns of up to 12% depending on how much volatility you're willing to absorb. But there are other ways to invest.  You can invest in yourself by getting a degree or other training to improve your income.  You can invest by starting a business, which can dramatically increase your income (in fact, this is the most common path to ""millionaire"" in the US, and probably in other free markets). You can invest by growing your own existing business.  You can invest in someone else's business. You can invest in real estate, that can provide both value appreciation and rental income.  So yes, ""investment"" is a key aspect of wealth building, but it is not limited to just stock market investment. You can also look at reducing expenses in order to have more money to invest. Also keep in mind that investment with higher returns come with higher risk (both in terms of volatility and risk of complete loss), and that borrowing money to invest is almost always unwise, since the interest paid directly reduces the return without reducing the risk." You're ignoring inflation. Even if we assume the ECB sticks to its 2% inflation  target, and your salary only rises in line with inflation, you will be saving considerably more in forty years' time than you are today. In fact, an interest rate of 2% and an inflation rate of 2% make the sums exceptionally easy. You need to save €25,000 per year in 2057 euros to be a millionaire by 2057, which is €11,322 in 2017 euros. Challenging, but achievable. Of course, you'll only be a millionaire in 2057 euros, which will be worth less than half as much as a euro is worth right now. If your take-home salary after taxes etc is 35K / year, and you say you will be able to save at most 40% of that, you will need to find something that pays 2.75% to reach one million in 40 years*. However, these numbers can chance dramatically depending on your specific circumstances. If you're just starting your career, 40 years of saving is not impossible. If you're in the middle or nearing the end, you will have dramatically less time to achieve your goals. *40% of 35000 is 14000 saved per year, at an interest of 2.75% compounded annually, you will reach 1000000 after roughly 40 years.
"Your dad may have paid an ""opportunity cost"" for that outright purchase.  If the money he saved had been invested elsewhere, he may have made more money.  If he was that well off, then his interest rate should have been the lowest possible.  My own father is a multi-millionaire (not myself) and he could afford to have paid for his house outright.  He didn't though.  To do so would have meant cashing in on several investments.  I don't know his interest rate but let's say it was 2.5%.  If he invests that million dollars into something he expects to get a 7% return on in the same period, then he would make more money by borrowing the money.  Hence, he would be paying an opportunity cost. Assuming you need to work, some jobs will also do background or credit checks.  Credit cards can be used by well off people to actually make them money by offering rewards (compared to straight cash transactions).  The better your credit history, the better the cards/rewards you can get.  You can build that credit history better by having these loans and making timely payments." "let's talk on ""qe"" by: raul m. ramos   20  september  2012  thursday, manila, ph   i want to share this to all the - “brilliant economists” - in this world   let's talk on ""qe""    by:  raul m. ramos  qe is not a cure - it is a stimulant. qe is synthetic - no more, no less. qe is artificial - it cannot and will never hold water. qe is only a temporary relief - not an outright, total solutions. qe is absolutely not a guaranty - not an assurance for recovery or growth. qe is a very good tool - this acts as an oxygen to a dying patients to breathe. qe is now and forever - taking away the oxygen, the patient will going to die. qe is a big balloon - continues to expand, amplify, waiting to explode, to burst. qe will keep you moving today - but not for the rest of your life. qe is quicksand - the more you move the more you get sucked down. qe will bring joy today - (later) it will bring tears, pouring in your eyes that could not stop. qe is worthless - infusing, injecting precious blood, highly precious dollar to a zombie economy (a lifeless economy), an “absolute waste”. qe is brainless - simply do not know what will going to be the consequences to the economy. do not have the idea of what will going to be the final result. qe is only a dream - being over optimistic that one day everything will go back to normal, that at the end of the day the economy will recover and finally would realize growth. qe is just a fantasy - meaning punching the moon, the stars (thinking it will resolve the year 2008 economic meltdown). qe is an investment - yes!!! a massive investments to a dying economy, (absolutely wrong investments). qe will keep you running - it is like a ticking time bomb. qe is not good for the economy - the government acts (or play) as an investor instead of the businessman. qe is being very kind and generous to businessman, while keeping the country, the state's economy at stake or in jeopardy. qe is putting more money to a moribund business - supporting the company to stay, to exist for the time being. and later on will literally closed shop. qe is killing the mighty, precious dollar - slowly but surely. qe is hide and seek - like suze orman (of cnbc) say's, ""show me the money"". qe is treasure hunting - ultra rich, millionaires, billionaires is keeping it. they hide it. where are those precious dollars? making the economy sick, crippled, dead. qe is a money making machine (printing press) - once the economy becomes frail, weak, all they have to do is just print. qe is putting plenty of money to a basket full of holes - truly very few will benefit and so many will going to suffer.  this is inequality.  disparity is very disturbing (counter to a good economy). qe is experimental - (trial and error, testing) probability never done before. qe is good at the start (year 2008) - after spending, investing, releasing, trillions and trillions of mighty precious dollars - big companies, millions of jobs were blessed, saved, rescued, erstwhile salvaged.  and like magic - america the wealthiest and most powerful country in the  universe is now going to act again (today!!!) to spend, invest, release again (and again and again and again . . .) trillions and trillions of mighty precious dollars for the economy to keep moving, (my God!!! what an “abnormal cycle of the economy”). qe is a wild guess (absolutely speculative) - before only big businesses, huge companies are at stake.  today it is now the whole country is at risk.  not yet talking of the whole wide-world (with special mention - to my dearest, my beloved country - the philippines).  this is certainly,  absolutely contagion, domino effect.  no one, not one will ever be spared. qe is very contagious - before only america needs to be saved to be salvaged. today all countries is in distress (suffering), badly needs a rescue. qe is keeping inflation very low - yes!!! absolutely for today but not for tomorrow.  the medicine that they used during the 2008 economic slump is luckily still moving.  meaning still working.   but once this medicine starts to slowdown and begins to die down.  you may call all the saints above.  and the (true) inflation you are looking for, searching for will surely and definitely come into your midst.   inflation will going to kill us all. qe is a wrong medicine - temporary patch or band.aid qe is phoney - it is just an easy money and definitely not a hard earned (labor generated) money. qe is a gamble - trillion dollars is at stake. if we are lucky the dying person or the economy will live. if we are not lucky the dying person will die, the economy will going to collapsed, and still we have to pay all the “debts” as long as we live. qe is domineering - the economy today is at the mercy of ""qe"".  (the economy is captive, hostage by ""qe"") interest rates is a lose-lose situations. keeping it zero.  the u.s.a. government will lose trillions  and trillions of dollars, that is badly needed.  now, raising this rates will surely and definitely starts  the u.s.a. markets and precisely the world economy to react, pulling down the unstable economies  of the whole world to jeopardy.  now, which one would you like to choose? again, which one would you prefer? qe is trial and error - a complex, complicated solutions.  healing one part of the body and the other part will swell and burst. qe is evaporation - (using taxpayers money) pension funds, retirement benefits and all entitlements is going to fade, will vanished in thin air. qe are waiters - simply waiting day and night for growth, for recovery. qe is thirstiness - it dries up the u.s.a. treasury. qe is debt - a never ending debt. keep in mind there is no such thing as unlimited debt or debt unlimited. don't be fooled. qe will going to keep you in good sleep - but will wake you up bankrupt. qe is not an answer - it is the culprit. qe is universal - it was copied all over the world (worldwide). qe is an absolute solutions (yes!!! for all dumb economists) - a 100percent “hopeless, desperate, solutions”. qe to be specific is going back again to the 1930's depression or the great depression part 2 – yes!!! precisely but with a ""big bang"". qe before is only a staggering risk. today it is now “debt impregnating” - simple as, it keeps on giving birth (by the hour, the minutes, the seconds) and after eight long years the final,  the end result is massive “pure debt”. very sorry to say, not growth (and) or definitely not recovery. qe is a dying move - no one, not one ever dared to affirm, to attest, to certify, that this is a “correct solutions”. qe is mad - it will make you crazy because of ""debt"". qe is the only options - yes!!! absolutely, when your big brains is ""not working"". qe is easing the pain - correct!!! for a very short period of time, but will going to ""destroy"" the economy in the long (or short) run. qe is history - it will haunt you forever and ever. qe - what more can i say?   fb:     thegreatdepression.part2@yahoo.com" Yes, it is.   The reason they are forced out, is because their homes become so valuable.   If you living in a home that has become worth millions, and can't afford the taxes, then sell up and enjoy your riches.       Should that necessary tax money instead come from the working class, to subsidize millionaires that want to stay in their homes? "Your questions seek answers to specifics, but I feel that you may need more general help. There are two things, I feel, that you need to learn about in the general category of personal finance.  Your asking questions about investing, but it is not as important, IMHO, as how you manage your day-to-day operations.   For example, you should first learn to budget.  In personal finance often times ""living on a budget"" equates to poor, or low income.   That is hardly the case.  A budget is a plan on how to spend money.  It should be refreshed each and every month and your income should equal your expenses.  You might have in your budget a $1200 trip into the city to see a concert, hardly what a low income person should have in theirs. Secondly you need to be deliberate about debt management.  For some, they feel that having a car payment and having student loans are a necessary part of life and argue that paying them off is foolish as you can earn more from investments.  Others argue for zero debt.  I fall in the later.  Using and carrying a balance on high interest CCs and having high leases or car payments are just dumb.  They are also easy to wander into unless you are deliberate.   Third you need to prepare for emergencies.  Engineers still get laid off and hurt where they are unable to work.  They get sued.  Having the proper insurance and sufficient reserves in the bank help prevent debt. Now you can start looking into investments.   Start off slow and deliberate with investing.  Put some in your company 401K or open some mutual funds on the side.  You can read about them and talk with advisers, for free, at Fidelity and Vanguard.  Read books from the library. Most of all don't get caught up in too much hype.  Things like Forex, options, life insurance, gold/silver, are not investments.  They are tools for sales people to make fat commissions off the ignorant.      You are fortunate in that Engineers are very likely to retire wealthy.  They are part of the second largest demographic of first generation rich.  The first is small business owners.   To start out I would read Millionaire Next Door and Stop Acting Rich.  For a debt free approach to life, check out Financial Peace University (FPU) by Dave Ramsey (video course).  His lesson on insurance is excellent.   I am an engineer, and my wife a project manager we found FPU life changing and regretted not getting on board sooner.  Along these lines we have had some turmoil, recently, that became little more than an inconvenience because we were prepared." Value investing is just an investment strategy, it's an alternative to technical investing. Buffet made money picking stocks.  It's not obvious how that adds value, but it does. Everything about the stock market is ultimately about IPOs. Without active trading, of stocks after issue, no one would buy at the IPO.  The purpose of an IPO is to finance the long-term growth of a business, which is the point in the process where the value to the people gets created.  There is a group of elites that needs to be dealt with, you're correct, but I worry that your definition of this group is overly broad. "It is difficult to become a millionaire in the short term (a few years) working at a 9-to-5 job, unless you get lucky (win the lottery, inheritance, gambling at a casino, etc). However, if you max out your employer's Retirement Plan (401k, 403b) for the next 30 years, and you average a 5% rate of return on your investment, you will reach millionaire status.  Many people would consider this ""easy"" and ""automatic"". Of course, this assumes you are able to max our your retirement savings at the start of your career, and keep it going.  The idea is that if you get in the habit of saving early in your career and live modestly, it becomes an automatic thing. Unfortunately, the value of $1 million after 30 years of inflation will be eroded somewhat.  (Sorry.) If you don't want to wait 30 years, then you need to look at a different strategy.  Work harder or take risks.  Some options:" They might not have to open accounts at 12 bank because the coverage does allow multiple accounts at one institution if the accounts are joint accounts. It also treats retirement accounts a separate account. The bigger issue is that most millionaires don't have all their money siting in the bank. They invest in stocks, bonds, government bonds, international funds, and their own companies. Most of these carry risk, but they are diversified. They also can afford advisers to help them manage and protect their assets. There's no limitation on what you can invest in, including trading stocks (as long as trading is not a business activity, like day-trading or investing for others). You just need to make sure you have a tax ID (either ITIN or SSN) and pay taxes on all the gains and dividends. Also, consider your home country tax laws, since you're still tax resident in your home country (most likely).