Greenbook: A Local Guide to Chesapeake Living - Issue 3 | Page 62

4 TIPS

TO GROW YOUR

NET WORTH
By Rick Rodgers

A report released earlier this year
from the Chicago-based Spectrem
Group estimated there were 8.99
million households in the United States
with a net worth of at least $1 million
at the end of 2012.
A contrasting report issued late last
year from the American Payroll
Association showed 68 percent of
Americans live paycheck to paycheck.
More than two-thirds of the 30,600
people surveyed said it would be
somewhat difficult or very difficult if
their paychecks were delayed for a
week.
Is it possible for that average
American to become a millionaire?
American millionaires are not all
greedy corporate executives. Dr.
Thomas Stanley has studied the habits
of wealthy people for the past 30
years. His groundbreaking research
has uncovered the truth about the
lifestyles of the wealthiest Americans.
• Four out of five millionaires are
self-made.
• Many millionaires own their own
business and consider themselves to
be entrepreneurs.'¨
• Their companies are rarely
glamorous and are more likely to
be very ordinary jobs, like paving
contractors and pest control
businesses.
Becoming a millionaire most likely
doesn’t just happen to you. Rather,
it takes planning and perseverance.
Here are some steps you can take to
grow your net worth.
• Live below your means. This step
is so obvious we shouldn’t need to be
reminded. Unfortunately, most people
never learn to spend less than they

make. Unless you discipline yourself to
save something from every paycheck,
you will never be able to accumulate
money that can work for you. The
secret to living below your means is to
have a budget and work your budget
every month.'¨
• Save a minimum of 10 percent.
George Clason's classic book “The
Richest Man in Babylon” tells the
story of a man who wanted to become
wealthy. He started by saving 10
percent of his income and eventually
became wealthy by having his money
work for him. Research has shown
many of today’s millionaires
accumulated their wealth by saving
and disciplining themselves to increase
their savings every year.
• Invest your savings in businesses.
Your savings should be put into
growth-oriented investments. Not
everyone has the ability or desire
to start and run their own business.
However, we all have the opportunity
to own businesses by buying stock.
Stock prices can be volatile but you
can minimize the volatility by owning stocks through diversified mutual
funds. Investing on a regular basis
allows you to take advantage of the
stock market downturns through
dollar cost averaging.

the Wall Street Journal “A simple rule
dictates my buying: Be fearful when
others are greedy, and be greedy
when others are fearful.”
• Hire a financial adviser. It’s not easy
to stay the course. You often need an
independent third party to remind you
of your goals and help you make the
right financial moves -- especially
during times of great uncertainty. A
good financial adviser will try to help
you develop a good investment
strategy and keep you focused when
you need it most. Investors often
make their biggest mistakes by
allowing emotions to interfere with
good judgment. A financial adviser can
help you keep your emotions in check.
Becoming a millionaire is not easy or
there would be more of them! It takes
discipline to live below your means
and to save and invest. One of the
millionaires interviewed by Dr.
Stanley never made more than $60,000
per year.
"I have accumulated most of my net
worth by living below my means,” she
told him. “I have everything I want,
but I have learned not to want too
much."

Certified Financial Planner® Rick
Rodgers is president of Rodgers
• Don’t follow the herd. The Great
& Associates, “The Retirement
Panic of 2008 turned out to be one of
Specialists,” in Lancaster, Pa., and
the greatest buying opportunities.
author of The New Three-Legged
Stock prices fell by more than 50
Stool: A Tax Efficient Approach to
percent during this downturn and have Retirement Planning.
recovered to move on to new highs.
Unfortunately, many investors sold
For more information,
their stocks during this period instead visit www.RodgersSpeaks.com.
of buying as evidenced by the net
Reprinted with permission from
redemptions of stock mutual funds
RISMedia. ©2014. All rights reserved.
which totaled in the billions. This
prompted legendary investor Warren
Buffett to write in an op-ed article for