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Tags: investing | budget | Life | Lessons

The $3 Million Difference and Basic Life Lessons

By    |   Friday, 30 March 2012 07:27 AM

There is no requirement that students learn the two most-important skills that every American adult will need at some point in their life, regardless of their race, creed, what city they live in or what profession they choose: budgeting and investing your savings in safe, high-yield investments.

Many people will argue that budgeting is basically common sense and that you just need to save more than you spend. Anyone with little or no education can understand that simple concept.

The main thing everyone needs to learn in their life, but few actually do, is investing their savings in safe, high-yield investments.

Editor's Note: Inside the World’s Greatest Retirement Lie
Find Out the Truth, See the Details.

Anyone who works 40 years and puts $5,000 in an Individual Retirement Account and their investment paid 6 percent would have $773,810 at retirement and would be earning about $50,000 per year annually on their money. They wouldn’t outlive their money if they lived prudently.

However, if you saved the $5,000 and compounded your money in safe, high-yield investments that earn 12 percent annually, your total would be double the 6 percent, right?


In fact, because of the miracle of compound interest and the reinvestment of dividends, your estate would be worth $3,835,455 ($3.8 million) and would be earning you more than $450,000 annually without touching your original investment.

Now that is preparing for retirement, isn’t it?

Just imagine if you were able to save more than that each year or you could compound your money at even a higher rate.

Now, do you understand why it is crucial to learn how to compound your money at higher rates?

Folks, your children and grandchildren don’t possess your life experiences and wisdom to learn this on their own.

They will spend thousands of hours in classes and thousands of dollars on education, which won’t teach them this crucial skill set.

Encourage your children, grandchildren, nephews and nieces to develop an interest in allocating capital.

The fact is the Dividend Machine newsletter has averaged over 31 percent compounded annually since inception almost 3 years ago.

Mark Hulbert has been writing and publishing The Hulbert Financial Digest for over 30 years, tracking the advice of over 180 newsletters since 1980.

I am proud to say that my newsletter was No. 1 in performance for portfolios that are low risk (which is volatility at least 40 percent less than the Wilshire 5000 over the same period) over a one-year return.

My father paid three weeks’ salary that he barely had for an encyclopedia when I was small.

It was really interesting but it didn't help me become a great investor.

Thankfully, my fantastic parents encouraged my brother and I to be financially independent.

But we learned through trial and error and lost 20 years of "productive" investing which can never be recouped.

If I had this newsletter when I was a child I would have retired at 22 years old, not 42 years old.

For less than a cup of Starbucks coffee a week, my newsletter and access to my entire investment library is available for your child or grandchild.

So now you know the $3 million "difference," which you learned in just the few minutes it took you to read this article. Smart capital allocation makes all the difference in your future — and the future of your loved ones.

People all around the world have emailed me and told me this information has changed their life.

Remember, the only people who don't need to learn how to allocate capital are those who don't have any.

About 56 percent of workers report having less than $25,000 in savings and investments (not including the value of their primary home and benefit plans) and 29 percent of workers have less than $1,000 saved.

Is this what you want for your children and grandchildren?

About the Author: Bill Spetrino

Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now.

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Friday, 30 March 2012 07:27 AM
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