Investing Money, Apply Your Millionaire's Mindset

Investing money scares many people. They generally have several limiting beliefs about investing or their own ability to manage investments. Furthermore, fear is a very common emotion that prevents people to take steps.  

Fortunately, in today's modern world most larger companies offer investment programs (401K) that take much of the fear out of the equation. Even many smaller companies offer that investment approach. It is a wonderful thing and something workers should participate in. There is more you can do without being an expert in all the different investment vehicles. 

It begins with your mindset of a champion which is enhanced with your millionaire's mindset. The early you get started the greater the wealth accumulation because of the power of compounding interest. Investing money when you are young pays off enormously in the long run.

Investing Money and the Power of Compounding

Investing money does not need to be a fear ridden or risky experience. You do not need to really have any special college degree to be successful. You do need discipline, patience, and a millionaire's mindset which embraces investing.

Let's look at some investing money examples.

We will begin by assuming you are 32 years old and have a family, but you have never invested any of your money. You decide now is the time and manage to scrape up a measly $200 per month every month for the next 34 years and you had already managed to save $5000 which you use to open an account.

The $200 a month isn’t even close to 10% of your income, but you will have social security which is stealing 18% of your potential money for investing. You aren’t much into managing your finances and you know you need to diversify and you want some security. Because you have a mindset of a champion, you seek out the knowledge you need to invest your hard earned money, accumulate wealth for the betterment of your family and community. 

After investigating, you realize the S & P 500 has never lost money over any 20-year period let alone the 34 years you plan on investing, so that seems quite safe to you. It is certainly diversified as it covers the 500 largest businesses in America. You decide to invest in the ETF SPY which mirrors the S&P 500 and figure when you get close to retirement you will move it into an even safer investment.

For the next 30 years, the S&P just happens to do about its lifetime average and you get a 9.5% return on your investment. You have $730,100 in your retirement account. Transferring that into a much safer investment that generates a measly 5% annual return your retirement account will net you $36,500 in annual income plus whatever your social security would add to that. It is not a lot but given your expenses should be significantly lower you should be able to enjoy a nice retirement. If you want to determine what your social security might be you can look at that here.

Now, let’s assume you decide to wait five years to invest. If you do that the amount you would have at retirement is $445,371 or a “loss” of $284,729, which amounts to slightly more than $14,000 annually. If you started five years earlier you would have $1,187,118 or $59,356 annually. Under this scenario if you waited until you were 37 to start investing you would have to invest $355 per month to get to the same end. If you want to play around with those investment numbers you can down load this excel spreadsheet I created and watch my tutorial here.

(to Download to your computer, click the link. Once the spreadsheet is open find the "file" tab in the top left corner of the spreadsheet.)

Excel Spreadsheet

Then click "save as" and then click "download a copy"

If you are interested in the stock market and investing money in that, there are lots of courses available. TD Ameritrade offers some invaluable courses and their ThinkorSwim platform is excellent. Of course, most major investment houses and brokers offer lots of services for their clients. Fidelity is one of the biggest players and have great resources. One of the best investment books I ever bought was by Tony Robbins and was Money: Mastering the Game. There was another fabulous course I had on futures trading by Ken Roberts.

The Ken Roberts course is not an investment approach for most people because the futures market is not totally safe, but it does offer significant opportunity for profits. I do not invest in futures, but what I did learn from a technical stand point I have used to help manage my All Weather Portfolio which as of this writing has returned over 19% with only one losing year in the time I switched to that portfolio. Safety with good returns are hard to beat. That portfolio has been back tested (though doing that accurately is difficult due to the types of vehicles we now have available that weren’t available in the past) and the average rate of return practically matches the S&P 500 but with much lower risk.

The All Weather Portfolio was created by Ray Dalio and uses ETFs as the investment vehicle. Investing money in that portfolio gives you a mix of 40% long-term government bonds, 30% stocks, 15% short-term bonds, 7.5% gold, and 7.5% in commodities. The recommendation is to regularly redistribute – at least once per year. I redistribute as I invest and evaluate buying and selling weekly. I also look at charts and analyze historical values and the 39-week moving average to play around with those percentages. I may be a little more in one area for a while and a little low in another because of historical highs and lows or because of the moving average. I don’t want to buy high and sell low, even though dollar cost averaging in the long-term helps mitigate that problem. My approach seems to be doing quite well without a constant need to stay tuned into what the market is doing. It also takes away the emotion of investing money – a huge problem for many people.

Investing Money, The Real Estate Option

One investment option that is available to anyone is real-estate. Real-estate is not for everyone and there are different ways to invest. You can become a landlord which has worked very well for my sister and brother-in-law as well as a former client.

Let’s just run some numbers that are more than realistic because they are real numbers. If you over-time purchased 8 multi-unit buildings with a total of 25 apartments and the average occupancy rate in your community is 90% that would mean you are renting 22 at any given time. If the average rent were $1000 per month including utilities that would be an income of $22,000 per month. You would have maintenance, property taxes, and presumably a mortgage with that so all of that is not going into your pocket.

What I can tell you is when the mortgage is paid off you could be making significant income as a land lord. My brother-in-law was a real estate lawyer who stopped lawyering and simply managed his properties. I have known school teachers, tradesman, and small business owners who all invested in real-estate and had exceptional second incomes and even greater retirement incomes. Some sold the buildings in retirement because they didn’t want to manage property, but 6 buildings at an average of $500,000 gets you $3,000,000 profit because in this case the buildings were all positive cash flow so the owner never put his own money toward the purchase.

The other way of real-estate investing that is becoming popular is flipping and wholesaling. There are some outstanding courses and mentors out there in this field. Two I would recommend are Cameron Dunlap and Dean Graziosi, both of whom also embody the millionaire mindset.

Click below if you are interested in scheduling a private consultation to learn more about the incredible value of our full mindset training curriculum for your family, which would include training a millionaire mindset.

On this call we will take about 45 minutes to learn about what your desired outcomes are and your specific family situation. We will have an honest conversation to see if this training curriculum is right for you and your family.

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