How to Get Rich in 10-15 Years

What Does it Mean to be Wealthy?

Being wealthy has nothing to do with a set dollar amount or what car you drive or which labels you sport.

If the income and/or returns of your investments are more than twice the amount of your annual living costs, then you, my friend, are wealthy.

If you own a business and make millions of dollars, but the business will fail if you are not in it, then all you have is a very highly paid job.

Real wealth is about securing a stream of income for yourself that consistently throws off returns that are at least double your annual living expenses.

A Big Salary Doesn't Automatically Make You Rich

Getting rich takes a lot more than just securing a big income. Many who aspire to be multimillionaires stumble at this point.

They work hard, get promoted or build their businesses and start earning large amounts of money. but these "would-be" millionaires fail to fulfill their true wealth-building potential at this point.

You see, they get seduced by the illusions of wealth as portrayed by the aforementioned luxury-goods marketing machine that they see in magazines and on television.

Don't get me wrong; if you have a large income, you have a huge leg up over the person earning an average income. But if the odds hold true, then you are could blow that big advantage by overspending.

Are You an Aspirational Spender?

Aspirational spenders are above-average-income earners who yearn to possess the lifestyle of the truly wealthy but do not earn enough money to do so.

Instead, they employ credit card and home equity loan debt to acquire the trappings of wealth -- fancy cars, vacation homes, designer purses, designer suits etc.. They actively pretend (self-delude is a better word) that they are rich. This becomes an all-consuming pantomime of self-delusion, as more and more money is required to fuel this facade of wealth.

The aspirational spender typically earns between $100,000 and $150,000 per year. This is 2 1/2 to 4 times greater than the national average income.

In fact, it is more than enough of an income to get wealthy on within a 10-15 year period.

But these people never do develop real wealth.

Their incomes continue to grow, and they make terrific employees and are usually very good at their jobs, but their desires are always one step ahead of their income.

The Key to Developing Real Wealth

Many years ago, I read a book titled "The Richest Man in Babylon" by George S. Clason. In that book, I learned that I would never be able to satiate every single material desire that I have.

So, instead of trying to fulfill as many of my "wants" as possible, I started getting very picky about which "wants" I chose to indulge ... which "wants" I chose to postpone and which "wants" I chose to abandon.

Once I fully accepted that I'll never have every single thing that I may wish to possess, it was like a great weight was lifted off my shoulders; it was very freeing. It also allowed me to better appreciate what I already possessed.

But the most important thing it did was get me off the spending carousel and onto the road to living beneath my means ... and start saving and investing, which is the real route to obtaining large-scale sustainable wealth.

Your Desired Future is Just a Decade Away

Wealth can be created from any starting level; it is not income-dependent. However, in this article I want to highlight how much easier it is to get rich if you already have a large income.

It really doesn't matter which vehicle you use to create your wealth -- whether it be real estate, stocks, commodities, options or your own business. Any success that you find in any investment endeavor will be meaningless if you continue to spend more than you earn.

It is only when you start living beneath your means that you will truly be on the road to real wealth-creation.

If you earn over $150,000 a year, you have absolutely no excuse for not being rich!

What's the secret? All you have to do is live on 30% of your gross income and invest the rest.

Your 15-Year Plan to a Lifetime of Riches

At $150,000, assuming a 35% tax rate, your take-home pay would be a shade under $100,000.

If you want to get rich, start by simply living on $50,000 and investing the other $50,000. Do that for 10-15 years and you will be rich, period.

If you can average just a 12% compounded annual growth rate over 10 years, you'll have a shade under a million dollars.

Over 15 years, you'll have over $2 million -- two million dollars that is growing at 12% per year is more than enough money to last a lifetime.

That's it; pretty simple right?

Are You Ready to Sacrifice What You Want Now for What You'll Need Later?

So, what is the real way to measure personal wealth? The yardstick is whether our investment income covers our living expenses.

If it does, then you are well-off. If your investment income is 2x or more greater than your annual income, then you are well and truly rich!

I know I have now lost 99% of you. The thought of the relative deprivation that such living would require is probably too difficult for many of you to face squarely.

And that's OK; not everyone possesses the necessary discipline that it takes to acquire true wealth.

Don't beat yourself up about it. But, by the same token, don't fool yourself into thinking that you are rich just because you have a big salary, a shiny Benz and a nice sprawling McMansion.

We both know you are one pink slip away from financial Armageddon.

I'm here to tell you that you don't have to live that way anymore.

Downsizing is only painful when you are not emotionally prepared for it. Once you make the decision to be "for real" rich instead of "pretend" rich, the decision to downsize instead of "super-size" will be an easy one.

Downsizing Your Spending = Super-Sizing Your Wealth

Don't squander the opportunity that you've been given by being blessed with the ability to earn a large income. You have a huge edge over every other person earning less than you. You blow that edge when you over-spend and under-save.

Remember -- even if you win the lottery or increase your income dramatically, but refuse to spend less than you earn and refuse to save and invest surplus capital -- you will never be rich.

You will never experience true financial freedom, and you will always be at the mercy of your spending habits, your employer and the economy.

It's always a good time to re-evaluate your financial plan, but especially with the dawn of a new decade just around the corner, there's no time like the present to plan to become a millionaire. You'll thank yourself in 2020!

Holiday period is coming

Well....I am happy for those lucky souls having fun and going oversea for their holiday, that is the way to go in life. But for me....well, maybe next year if things go as plan....I might also enjoy this period. Until then....I will just have to envy other people.

Since I have said that I shall treat my present place as my fun place esp the pools, sauna, gym, makan places and Bt Timah hill....so be it for now lor. Now also ramp-up time at work. Nothing to complain about...since at most I will be doing this for the next 9 mths before the whole place shut-down! Not likely there will be a last minute change of plan too. I might as well enjoy the time and work....together with the rest of the crew.

For the Forex and Stock trading thingy....no trading for Forex for the week but lost in the stocks esp HK stocks due to the fact that it is winding down for the year. I have no experience with the market there, the lucky thing was that I am just starting out as the bets were not too much....therefore same with the losses too.

4D....no luck too, anyway I have also cut down on it too. So it is manageable.

Looking forward to my bonus hehehe and the "return of my pay cut for Oct to Dec" that is 30% of my pay. Then....by Jan 2010, it is back to normal for my pay. Things are really looking great for the company too....the share price has gone from US$3+ to present US$17+. Hehehe....I still have some option shares left plus this year employee's one. Wow....should be a nice bonus in time for Chinese New Year if I sell them by then.

For the family....well, things are going on fine. All are in good health and busy with their own stuff. For the other thingy....well, I am already used to the idea it's in the past. So I shall let the sleeping dog rests....no point to rekindle the passion and whatever!

Seem like the Asian markets are having correction now

Yes....esp HK, SSE and Kospi are having a correction. People are taking out the money to park away from the markets. Esp the fund managers....and those who had already earned their keep for this year. They can close down for the year....to go on holiday with family since it's the school holiday time or just to relax at home.

Not having a great time for my trading....already suffer losses on over the past few days. Today....again already stopped out for all of my trades total 4 counters.

The story of the baby whale

Yes....I went to Waterloo Temple to pray pray and also to ask for guidance for my luck. Got a chaim see....No 2 and it was about the story of the baby whale.

POWER.....really understand what the story is all about esp in relationship with my stock / forex trading. How the baby whale is dependent on the mother whale and to better protect itself....it must swim in shallow water and not to venture too far out and away from the mother whale. Must always remember that since it's a baby, it has not enough experience to deal with dangers from other bigger fishes eg killer whales & sharks and men!!! esp from Japan hehehe!
In it....is the warning about losing money if doing any form of gambling /investment esp if have not proper understanding of the whole situation. And true....to it, immediately the Hong Kong stock market went south. In fact....I had time to react but I didn't do anything. In the end....I lost!

By today....I lost back what I made last week plus 20% more. Just in 2 days....lost a total of 28+% of my total funding. Well....at least, this made me realised that it is also possible to make the same if I do the right trade. One of my mistakes...was to open too many counters and that made it hard to monitor. The thing is....when the market turns down....even the good counters went down with it, yes...maybe in small %age. Same thing for up market....even rubbish stocks will go up too in bullish market.

Now that I understand this....I will do my trade accordingly to market condition for that day. Also to trade up to max 3 counters.....easily to monitor and to re-act accordingly to situation faster. Trading right is all about fast decision and no regret. In fact....if can trade with no emotion then, half the battle is won!

Now it's time back to the drawing board and to re-think what I should improve my trading better and to pick the right stock.

Blue chips or index stocks

Yes....came to realise that it is much better and safer if trade only with blue chips or Index stocks. This is due to the fact....better margin and easier to be in/out of a trade. The same applied to SGX and HK stocks.

Now...I traded mainly on HK stocks. So many stocks to choose by and in high volume too.
That way....also safer as can get out faster.

I want to learn about Swing trading and Day trading. I have read-up and printed out quite a few great ideas about both. Yes....esp at this moment, I cannot strictly depend on what was taught at T3B....that method would have work-out well during the early bull-run ( esp from Mar to Jul 09 ) but since now we are at the "toppish" end of the trend....gotto stay nimble and not too greedy. Still....should have another nice run-up before the whole bull-run runs out of "gas" which I predict should happen around Feb or Mar since everyone had said that the next Qtr GDP...should be on the high end, then follow by lower close qtr by qtr until the last Qtr. Well...base on that and looking around....that should be about right!

Now...must plan to trade according to the above which means that I should be "shorting" stocks at about the end of the 1st Qtr or around Apr....let the whole situation become clearer. A falling market....should be a profitable market too.

Monday trades

Yes....remember that the Dubai thingy would be the main theme for today's trading, so I didn't do much trading. In fact...when the HK stock open for biz at 10am, the market just went into a tail-spin of 200+ points and continue till 300+ by 11am, luckily since I have clear most of my positions on Friday...I went for a swim and sauna at 1130am.

By the time...I was back at 1.40pm, the HK market had recovered and added some 30+ points to the positive. So...when the market re-started after the lunch break, I started to monitor the market and lookout for good buys. Since it recovered so fast, I keep my distance....and true enough after 1 hr of the re-start, some stocks started to fall back into negative. So....scan the HK Index stocks for buys. Spotted a few stocks with a nice upwards trend lines.

So watch out out the list and finally I went in for a couple of cheapo stocks. Johnson Elect and Global Bio-chem at just before the close as the Dow futures is showing a nice
up day.....70+. Learned for past experience, if Dow can closed higher....then most other markets would follow the following day esp at the open. And since I decided to do day-trade....this method can work out well.

So....shall up-date on my finding for above tomorrow.

Friday trades

Wah....not bad as I clear most of my outstanding trades by the morning. Managed to swing back in the black.

And also with very little load to worry about over the weekend. I read about the swing trading method that which I tried out. So far....got positive result.