The Multi-Millionaire Next Door: My 2-cents on How to Become One

You are the multi-millionaire next door. And you probably don't know it.

We know of Henry Sy and Lucio Tan. But who is Philip Ang? The 3 of them are in Forbes Magazine's richest list in the Philippines. Henry Sy is worth 5 billion dollars, Lucio Tan is at 2.1 billion dollars while Philip Ang is at the "bottom" of the 40 Forbes Magazine-listed richest Pinoys, worth 50 million dollars. Many probably know that Henry Sy and Lucio Tan own conglomerates. But little is known about Philip Ang because he's in the field of mining (with holdings in Taganito Mining and Nickel Asia).

It's safe to say that the 3 gentlemen are of Chinese descent. But that doesn't automatically make them multi-millionaires (actually, billionaires!). The question is, "how did they do it?" And the next best question would be, "can I do it?" Yes, you can.

To be one, think like one.

The mind is one heck of a powerful engine of humans that if they are just able to tap 10% of its capability, then a lot can be achieved. Your brain is so powerful that it can command the other body parts to do what it tells them to do. Thus, what the mind can conceive, the body can achieve.

Have a multi-millionaire mindset. As my old friend John Calub would say in his seminars, be a "Money-Magnet." People attract what they want to attract. So first, you'll have to think and believe that you will be rich. Tell yourself everyday that you will get rich. This is the subject of the book and film titled "The Secret."

When I was little, I knew in my heart that I would someday be a successful entrepreneur of sorts. We weren't well-off then. But I wanted to have those cool toys my rich classmates had. I had a pair of used penlight batteries as toys way back then (boo-hoo). In my mind, I saw myself as a rich and successful entrepreneur. I had to start somewhere so I practiced. I started when I was in grade 3. I started a small comics rental business after school hours. I sold Choc-nut to classmates and family. I even went around the campus collecting soda bottles to claim "deposit" at the canteen. I eventually graduated to selling magazine subscriptions in high school and jewelry and retailed eggs in college. Today, I have a media consulting enterprise and some billboard rentals on the side. I also do seminars on starting a business with no capital. :)

Even if you pray daily for financial blessings, but you are not truly convinced that you can have these riches, then you won't have them. That's how it works, my friend.

Don't be afraid to dream. 

Never believe when others say,"only in your dreams" that you can achieve and be who you want to be. If you don't dream, there's nothing to come true, right? Be concrete and specific on what you want to have and be. Have a Dream Board. Also called a Vision Board or Dashboard, this is a collage of pictures and affirmations of your dreams or visions. Like a dashboard, a dream board is supposed to be some kind of a control panel which is in front of you all the time. It helps direct you towards your destination or goal. Affirmations such as Ï am Healthy, I am Rich, I am a Pilot, I have a large Farm, etc. are key to having an effective, besides a picturesque, board.  Place it somewhere you can see everyday -- when you wake up and just before you go to sleep. The Dream Board will help you maintain your focus. I placed a Tagaytay House and Lot in my 2010 Dream Board last December. I bought a nice property right beside the clubhouse last April. :)

Stay Away from Negative People

The company you keep defines who you are. Many years ago, I was bent on fulfilling my dreams. I wanted to build my own house as a promise to my wife. In my haste, I didn't take time to assess the people I dealt with. Their negativities affected my dealings. Eventually I closed all my businesses with them and just pursued my consulting and corporate job. Today, I only keep positive people within my circle. They provide the sunshine despite some storms that come.

Save and Invest Properly.

Put away at least 10% of your net income (after taxes) in banks and financial interests that earn a decent return. A decent return is defined as something you're comfortable with and not putting too much risk on your savings. There are many financial instruments available besides the basic savings account that only earns 1% interest per year. Ask your bank what they have to offer. There are those bundled savings with "free" insurance, mutual funds, and others tied to the stock market. Of course, you have to calculate and decide the acceptable risk on your part such as purely stock trading. Stay away from forex trading unless you have a real expert to help you out with. Read books and the newspaper for insights. My basic investment instruments are: property (especially with rental opportunities), gold and cash (all kinds of stable currencies like Hong Kong Dollars). If you are an OFW recipient of U.S. Dollars, put some of your money in U.S. Dollar-denominated mutual funds to safeguard your money from erratic exchange rates with the Peso.

If you know of a financial adviser, much better. They are the experts in handling money and making them grow. If you don't know one or can't afford one, then be one. Read up on investment subjects. Just make sure they appeal to you and are comfortable with them. Also make sure the types of investments are applicable to your situation or location.

The best investment I would recommend is a business. It's more long-term and fun. No need to depend on retirement financial plans. If you're looking for the safest investment haven, buy gold. :)

Be an Entrepreneur.

Everyone has a knack for business. Only in the Philippines will you find Sari-Sari Stores in almost every street.You have probably noticed food kiosks sprouting almost everywhere commercially possible. There was the Litson Manok, Shawarma, and Zagu phenomena. Today, it's Double Burger and Scramble.

We just don't know it, but anyone can sell something. The most basic is selling ourselves. If we can't sell ourselves to anyone, we won't have any friends or relationships, right? Besides, everyone has some kind of talent and interest. Discovering what talents and interests we have is the first step in being a successful entrepreneur. Remember that entrepreneurs do not work a day in their lives. They simply do what they love to do -- whatever it may be. They simply add a lot of research, hardwork, and faith to what they pursue, and they're off!

You can be an entrepreneur. Believe it. Work on it.

Learn perpetually.

No one is too old to study. You have to continue learning new things and to keep abreast of technology. Improve on your skills. These are the great enablers in life. If you fall behind, you will miss out on a lot of opportunities.

In 1995, when the Internet was just starting to become commercially applicable, I was blessed to be part of a publishing company that was launching digital versions of its products. We were "forced" to learn this new technology which introduced links to the World Wide Web. Two years later, I was employed as an "expert" in Internet advertising by a travel website that made 25 thousand dollars in banner advertising in its first 3 months of operation. It was surely unheard of in those years, especially when I sold advertising spaces in the Philippines -- during the Asian Crisis!

Today, having studied basic web and graphic design, and having been in digital media ever since, many consider me a veteran (not old, huh!). Well, only a few people like Janette Toral (one of the authors of the E-Commerce Law) and my good friend Jovel Cipriano (Pinoydelikasi.com) can claim to be digital media veterans and experts. We have continuously studied trends and have branched out into separate niches: Janette into blogging, Jovel into e-commerce safety, and me into social media and digital marketing consulting. 

Don't be lazy to learn. Learning is freedom.

Be the Millionaire Next Door.

You are a certified millionaire when you have a million pesos in cash stashed somewhere. Whether it's in the bank or in some financial instrument like mutual funds, as long as it's cash, then you're liquid.

When you have earned your first million, keep your head down. Maintain a low profile. Be humble. This attitude keeps you frugal and thus, maintains your liquidity. Of course, you have to enjoy your money, too. Just don't spend beyond your "investable" means. You can spend from your earnings but not on your principal.

Avoid spending on flashy cars unless you can truly afford it. Cars depreciate in value over time. But if you're really looking into a worthy automobile, buy a Mercedez Benz. The Benz doesn't lose its value much over time. Parts are available and don't cost a fortune. Japanese-made cars like the Honda Civic, CRV or Odyssey, or Toyota Altis are also considered investments based on dependability and availability of parts,  without spending top dollar.


One last thing.

If you're "in the market" for a long-time partner, find someone who will complement you. Find a teammate. I may be a good salesman and business developer but I couldn't have saved and invested properly without my finance manager and lifetime partner, my Sweetie. I tell her my plans. If she disagrees after much convincing on an investment opportunity, I don't go for it. Your partner has to be the person who is on-the-outside- looking-in. This gives you a different perspective when finding the right financial instrument, investment or savings. And believe it or not, my Sweetie holds the so-called key to the vault and my ATM (haha). That keeps my hand away from the cookie jar. :)

The Challenge.

I want you to be the next Multi-millionaire Next Door. When you do, share your blessings in whatever way you can. Remember that we are just stewards. We are only passing through. Let us leave this world better than we found it.

======================================================
HOMER NIEVERA
Business Development. Social Media. Digital Marketing.
http://homernievera.net

Retirement Checklist: What to Do From 35 to 55+

by Walter Updegrave, senior editor
Friday, September 24, 2010
Yahoo! Finance


The road to retirement is littered with distractions. In the hurly-burly of life, so many things compete for your attention that you can lose sight of what really matters most.

That's where MONEY's checklist comes in. We've created to-do lists for each of the main stages of retirement planning. Think of them as basic reminders you can set aside and refer to on occasion -- say, every year or so -- to make sure you're on the right track.

It needn't be a complicated list. Says Charles Farrell, a financial adviser and author of Your Money Ratios: "Simpler is better. Focus on a few key goals and you won't miss the forest for the trees."

TO DO: Mid-30s to early 40s

Goal: Develop the habit of saving. Savings: 1.5 times your annual salary by age 35.

• Take full advantage of my 401(k) match. Your employer-sponsored retirement plan is the easiest way to put your savings on autopilot. And if you take full advantage of your company match, you could earn 50% to 100% on your money before taking on any market risk.

• Boost my 401(k) contribution. As your paycheck grows, your savings rate should too. Sign up for "auto escalation" to boost your contributions by a percentage point or so a year. If your 401(k) doesn't offer this feature, sock away half or more of each raise.

• Find other tax-advantaged ways to save. Already maxing out on your 401(k)? If you make less than $120,000 -- or $177,000 for married couples filing jointly -- check out a Roth IRA. Already hitting the $5,000 annual IRA limit? Move on to investment options such as index funds that don't expose you to stiff tax bills.

• Cover six months of expenses. Make sure you've got an emergency stash, so if you get laid off you won't be forced to dip into your 401(k) and IRAs. Put this money in a safe place like an FDIC-insured bank account or CD, or a high-quality money-market fund.

• Invest for growth. You may feel skittish about stocks, given the recent market turmoil. But with retirement still two to three decades away, your best shot at building an adequate portfolio is to put most of your retirement savings -- 80% or so in your thirties -- in stocks and ride out turbulence along the way.

TO DO: Mid-40s to early 50s

Main goal: Focus on how you invest your money. Savings: 3 times annual salary by age 45

• Rebalance my portfolio. Periodically reset your holdings in stocks and bonds back to your desired mix to smooth out the market's bumpy ride. Keep it simple by rebalancing annually on your birthday or after you get your year-end statements.

•Go over my investment strategy. You still need to invest for growth, but now's the time to start gradually dialing back your stock exposure to guard against another downturn. So if you started your late thirties with an 80% or higher stake in stocks, trim that to 70% or so by your early fifties.

• Make my catch-up contributions. The extra $5,500 you can throw into your 401(k) starting at 50 will not only grow into a surprisingly big stash down the road (see the chart), but will also reduce your taxable income now. You can also stuff a bonus $1,000 a year into an IRA starting at 50.

• Give myself a reality check. Assess whether you're on course for a secure retirement. The Retirement Planner at CNNMoney.com will tell you the odds of meeting your goals -- based on your current balances, savings rate, and investment strategy. It will also let you know how to catch up if you're off track.

• Consolidate my far-flung retirement accounts. After career changes and job switches, you may very well have left a trail of 401(k) accounts scattered among former employers. Rolling these funds over into an IRA or your current 401(k) will make it easier to manage your entire nest egg.

TO DO: Mid-50s and beyond

Main goal: Decide what type of retirement you want. Savings: 6 times your annual salary by age 55.

• Prune my stock portfolio. Going into the 2008 crash, nearly four out of every 10 401(k) investors in their mid-fifties to mid-sixties had 80% or more of their accounts in stocks. To avoid damage from market meltdowns near the end of your career, scale back your stock stake to 60% or less by your early sixties. And once you're close to retiring, keep two years' worth of expenses in cash.

• Map out a blueprint for my retirement. When you quit working, how will you fill the hours of each day? How much traveling will you do? And will you stay put or relocate? Fill in the blanks and create a real budget.

• Run (and rerun) my income plan. A financial planner or the Retirement Income Calculator tool at troweprice.com can help determine if your savings plus Social Security and any pensions will generate enough income -- safely -- to meet your needs.

• Look into when to take Social Security. Should you collect Social Security benefits at 62, or wait longer to boost your checks by as much as 77%? The Social Security Administration's Retirement Estimator tool will help you map out your options.

• Work on my Plan B. Things don't always go as planned. So keep your income options open. In case you need part-time employment, maintain ties to colleagues at work even after you retire. And look into ways you can tap home equity, for instance through a reverse mortgage.

(homer nievera)

7 Expenses You Can Ditch In Retirement

Mark P. Cussen
Saturday, May 1, 2010
Yahoo! Finance

If you're like most Americans, you're probably not saving enough for retirement. Most people - 57 percent - say they are either "a little" or "far behind" their retirement savings goals, according to a new survey by TD Ameritrade.

Excuses abound, but here are the most common ones:

Everyday Expenses: Some 56 percent of respondents said they had "little or no money left" to save for retirement after paying for daily expenses, including food, housing, and transportation.

[Click here to check savings products and rates in your area.]

Late Start: The same percentage of respondents reported that they got a late start on their retirement savings. Starting late means losing out on years of compounding, which can have a severe negative impact on the final amount saved at retirement. For example, if you start saving $12,000 a year at age 25, you'll have $3.2 million by age 65, assuming an 8 percent rate of return. If you save the same amount at age 40, you'll only have $915,000.

Parenthood: Parents say that having children makes it more difficult to save money for retirement. About half of female breadwinners and four in ten male breadwinners said they scaled back their own retirement savings in order to put more money towards their children.

Longer Life: Living longer is a good thing, of course, but it also means retirees need more money - enough to last into their 80s and 90s.

Do any of those reasons sound familiar? If so, it's time to get cracking - and up your savings so you don't face deprivation during what should be your golden years. The first step is to calculate just how much money you should be putting away.

Most people fail to do any sort of calculation at all, so this step will already put you in a better position. You can find a good retirement calculator with a quick web search, but be sure to use one that incorporates tax rates, inflation, and an adjustable rate of return so the results are as accurate as possible. Some good ones include TD Ameritrade's WealthRuler, Bankrate.com's retirement calculator, Transamerica's worksheet.

Once you've worked out just how far you're falling short, it's time to do something about it. Here are four suggestions:

Save More, Not Less. Most financial advisers say taking money out of the market when shares are down or you really need the cash is the wrong move, because you miss out on any future gains and compounding in the meantime. Plus, you might have to pay a penalty for early withdrawals.

Change Your Budget. Diane Young of TD Ameritrade says the biggest mistake people make is underestimating how much they can put away for later. "They're thinking they can't save more than they're already saving. But you can. You don't have to go out to dinner four times a week or spend $5 on coffee," she says. Even saving such a small amount pays off in the long run, she says.

Follow Tried-and-True Strategies. Diversify your investments through index or mutual funds, and decrease your exposure to stocks by shifting into safer vehicles such as bonds and cash as you approach retirement. A new survey from Vanguard found that investors are increasingly looking to low-fee funds, which keeps more money in their accounts.

Then Forget About It. There's no good reason to follow every dip in the market. Instead, focus on a hobby, get some fresh air, and spend time with friends.

(reposted by Homer Nievera)

The Millionaire's Retirement Plan

Fleur Bradley
Monday, June 28, 2010
Yahoo! Finance

If you're just entering the workforce, retirement probably seems like a lifetime away. A million dollars by retirement? That's someone else's dream, right? It doesn't have to be. Here is the millionaire's retirement plan. For these calculations, assume an average annual return of 8%, adjusted for inflation at 3% - a reasonable estimate of average market returns.

[Click here to check savings products and rates in your area.]

Age 25: A Good Beginning

You're 25 and landed that first job on your career ladder - congratulations! Before you start living to your new paycheck's standards, budget your retirement savings. If you have a 401(k) plan that matches your contributions, use it! These matching dollars are like a guaranteed return on investment. If you don't have a matching 401(k), look for a mutual fund through an investment firm with low fees; many now offer target funds, which allocate your investment risk with your targeted retirement year in mind - great for a beginning investor.

Choose a Roth IRA if you can; you don't get to deduct your contributions from your taxes, but you'll enjoy tax-free withdrawals at 65. Plan to start by saving about $200 a month to reach your millionaire goal; increasing this monthly amount by $10 annually as you get a raise or promotion will only speed up your saving.

Age 35: Rolling Along

By now you have saved about $45,000 and you've grown in your career with a bigger paycheck, but often, family commitments like children and a mortgage will seem more pressing than saving for your golden years. Don't make the mistake of slowing down your retirement savings. By now, you should ramp up your contributions to about $400 a month - remember that a matching 401(k) will help you in attaining this amount.

If you have kids and worry about saving for their college, look at it this way: the best way to help them in the future is by ensuring you're financially sound in retirement. Make saving for retirement a priority.

Age 45: Holding Steady

You're mid-career, and things are looking good in your retirement portfolio. Your savings have grown to about $160,000 - not bad, but it still isn't quite time to slow down. Increase your retirement contributions to about $450 a month or more, and you'll be rolling your way to millionaire status by 65.

Age 55: Close to the Finish Line

By age 55, your retirement portfolio should be at $400,000 or so. You can start to see the finish line, but begin to wonder about risk. If you've been investing in a target fund, your portfolio has been adjusting its allocation for you; otherwise, look at adjusting some of your investments to reflect a lower risk tolerance. And remember: your income at, say, age 70 won't be withdrawn for another 15 years - plenty of time to ride out market fluctuations.

At age 55, expect to really ramp up your retirement contributions, to roughly $600 a month, and more if you can manage it. The more you save, the sooner you can leave the nine-to-five behind.

Age 65: Prudent Asset Management

You're at the finish line: a millionaire at 65! Since you have no way to add to your savings now that you're out of the workplace, prudent asset management is vital. Keep a close eye on your portfolio so you can make your nest egg last. Protect yourself against inflation as well as market risk, and you'll be enjoying your golden years without financial worries.

The Bottom Line

With steady savings and smart financial habits, you can retire a millionaire - maybe even before you're 65.

(reposted by Homer Nievera)