How Did I Turn $166 Into Six Figures in Less Than 10 Years?
My Outline for Reaching Six Figures
A lot of people use clickbait in their headlines and titles. Doesn’t that make you mad when you read the article and the title wasn’t true?
Well, it does for me.
I try very hard not to mislead my readers.
When I had the opportunity to invest, I had a goal. Everyone needs a goal rather than throwing their money blindly into something.
My goal was to have a million dollars invested.
It was doable and not very hard to accomplish in 40 forty years or so.
When I first started investing, I invested in mutual funds.
I was brand new to investing and no one really showed me what to do or how to do it.
Based on what I read, I put everything into an IRA, Individual Retirement Account.
Back then, the only option was the traditional IRA. The Roth IRA wouldn’t come around for another decade or so.
I figured I didn’t need money today but would possibly need money when I was older and retired.
From what I read, the stock market was doing a lot better than my bank account with a less than 1% return.
Since options were limited, I went with mutual funds because I wasn’t sure how to invest in stocks. The ease of investing in stocks now wasn’t available when I started. So yes, you might say I’m a dinosaur when financial transactions were over snail mail instead of over your smartphone.
After a few years I saw my account balance reach $10,000.
For anyone who didn’t have a lot of money growing up, this was huge. I was excited and told my friends that I worked with.
Then something happened.
I saw my next balance drop several thousand dollars in a month.
I couldn’t check my balance update daily like you can now. I had to wait for my paper statement to arrive in the mail about 30 days later.
Times have changed haven’t they?
Then the Asian Tiger crash happened as the price of Asian currencies dropped against the dollar and created a domino effect in the stock market.
My account was divided between an international fund and a growth fund. As you can guess, the international fund really took a hit.
I saw more of my money disappear. I really didn’t like this.
Personally, I don’t like losing and want to control my money more than letting the market control it for me.
The international fund was doing okay but I started to read more about the science and technology fund that was hitting new highs month after month. So I added some money here as well.
In a few years, the tech bubble popped.
Many high flying tech stocks took a hit and my portfolio crashed again.
During this time I was using a simple strategy which is dollar cost averaging. Basically, I would invest money every month into my portfolio.
I was watching my account grow month after month, and I still wasn’t satisfied.
I was reading stories about people my age, people in their 20s and 30s making millions already.
These were people my age.
Thinking to myself, I was sad, why can’t that be me?
What can I do to 10X my investment faster than it was growing now?
I wasn’t a techie so that was out of the question.
Sports was also out of the question. I was an average athlete and usually one of the last picked for pick up games.
Music. That’s a laugh. I can barely carry a tune.
Then I started to look at real estate investing.
People were buying homes and becoming millionaires.
I figured this could be my way.
But I had no idea where to begin.
So I went back to what I was good at.
Reading.
I would spend the next few years reading about real estate investing while continuing to invest in my retirement account.
Robert Kiyosaki became my new real estate mentor in his books and videos.
His books didn’t always go into detail about real estate investing so I would pick up other books along the way.
After buying my first home which became a rental, I wanted to buy more homes.
So I started to buy homes over the next few years. Some I lived in and others were just straight rentals that I bought.
There is no magic or science to this.
Before you go out and think you can invest in real estate. You need to put in the work.
I have read dozens and dozens of books and articles about real estate investing.
I have also attended a few conferences and real estate events.
A few people I can call on the phone and talk about investment properties.
For the most part, I just do my own thing.
I try to share what I know and most people are at the early learning stages.
They’re content buying the one property they live in.
I have heard horror stories from others about tenants wrecking their property.
Usually, these investors self manage the property themselves.
There is nothing wrong with that, but I would advise doing a thorough background check.
Personally, I like property managers.
That’s less headaches for me.
I don’t mind paying the property management fees.
When it comes to investing, you need some general guidelines or principles to follow.
You can’t treat this like the wild wild west and do whatever you want or you’ll end up broke.
These are some investing tips I live by in no particular order.
Five Investing tips:
- Buy and hold
- Buy assets that are undervalued or on sale
- Don’t try to time the market
- Flipping or day trading is not investing — don’t confuse the two
- Always have an emergency fund especially if you have rentals; the more rentals you have, the larger emergency fund you need
Having principles or guidelines will help you when the market is good or bad.
When the marketer turns like it is going through now, be ready to weather the storm.
These are also good times to buy assets undervalued.
In any type of investing, always do your research and due diligence.
Even if someone like Jim Kramer says to buy a stock. You still need to do your own research.
- Does that stock fit in your portfolio?
- How long will you keep this investment?
- When will you sell this investment?
It’s easy to follow the advice of a TV personality and burn yourself while doing it.
Take it from someone who has been burned a few times.
These mistakes can get costly and become very expensive over time.
Always do your own research after you read an article, watch a video or take the advice of someone else.
You’ll be glad you did.
Here are some other articles you should read:
The Top 10 Habits of Millionaires
Five Steps to Become a Millionaire
Tips for the New Stock Investor
Have you written down or know what your financial goal is?
Tom Handy is a top Investment and Bitcoin writer on Medium, and father of two kids. He retired from the Army and sits on several non-profit boards. Tom is the top Yelper in his community and a top Google Guide. He’s on several social media channels and you can find him on Twitter @tomhandy1 and Instagram @tomhandy1.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.