So you want to be rich, eh?
Well, this may come as a bit of a shock to the trust-fund babies in the back row, but most of the 'rich' in North America (which I personally define as having over $500,000 in net worth), do not come by their money by ways of inheritance or gifts.
Actually, the largest majority of the rich are working class folks such as your tradesman neighbour.
Ye of little faith, check out 'The millionaire next door'.
Although this book is a little old, having been published in 1998, I personally believe that many of the tenets within have held true.
By working a steady job, earning a decent wage (much like most trades will provide), early in ones life, living below ones means, and investing patiently, I believe that anyone can retire at an earlier date, and with more assets then most.
For example, we can take a person such as myself:
Occupation: I.T. - soon to be Welder
I.T. - ~$40,000 /year
Welder - ~$45,000 / year + Overtime
I will work hard and make $50,000 take-home, with raises of ~$2000 /year as I gain experience and education.
I will invest as much as comfortable (~$25,000 + $1000 /year)
I will seek investments that are >2% dividend yield.
If I realize a return of ~4% after inflation (~3%), I will see a growth of ~7%.
Over the next 14 years, this investment will grow to over ~$733,000!
This means that when I am 40, I will have 3 quarters of a million dollars to my name.
Does this take into account taxes? No.
Does this take into account large raises or significantly higher wages? No.
Does this take into account market volatility (up or down)? No.
But, it does show that if you have the balls, and some luck, you can be rich before you're 40.
Will it be easy? No.
But it is possible, and as a wise man once said:
"The first hundred-thousand was hard. After that, it got easier."
Want to see the math in action? I've posted the results of my spreadsheet calculations below, and also ran them out to the usual '40 year' working period:
Bonus Calculation Chart:
Rate Of Return
Want to use this spreadsheet for your own calculations? Comment below and I'll e-mail it to you!