I want to be rich...I want to win the lottery... I want to be set for life or I don't need to be rich, I just want to be comfortable, etc. I'm often amused when I hear these statements. As much as I understand where people are going when they say this, they don't realize what they are saying is as hopeful as trying to have an intellectual discussion on Camp 8 with Can't Get Right. You've seen the movie Life - Gun Line Boss! There are two facts that have to be pointed out. Rich is not the same to everybody and getting rich doesn't just happen with a few haphazard wishes.
As often as people talk with The Investment Forum about being rich, I've frequently found that they don't have a clue what that means to them or more importantly what they want but they are sure it means a lot of money. Although it usually contains a monetary component, I bet you it doesn't take as much as you might think. Let's try a little exercise. Whoever wants $20 million raise your hands? Now that we have the majority of the crowd, you can get the money literally if your ultimate dream goals add up to $20 million plus or minus $25,000. There are three caveats. You can't add on things until the number gets to $20 million, the items must be itemized and listed in a series in a spreadsheet with the total in today's dollars backed by documents to prove your costs and you have 30 seconds to respond- heck let's make it 90 seconds. Ready, set, go! Too late, time's up. I know the masses have failed for two reasons. One, people who have written down the list of things they want either already have them, have exceeded them or are so far down the path of getting them they don't need any motivation to create a list. Two, if you're reading this and currently thinking of what can go on your list, then you don't have one which badly places you at risk of never obtaining your dreams or being rich. Now the question is what makes you think if I gave you $20 million you would have enough to get all the things you want? I'm willing to bet that most of your lists don't total anywhere close to that much.
It bears repeating that you don't need as much as you have made yourself believe you need and you won't have it until you have a list and a plan. Deciding the investments from a wealth management standpoint gets a lot easier when we know the type of return that's required on your money and we have a time horizon. Recently, we visited a couple in suburban Maryland to go over their portfolio and see what was needed. After a pleasant two hour conversation of question and answers we reached a unanimous decision. They didn't need our help. Do we want to make money? Of course, helicopter time is expensive but am I going to charge someone when I know they don't need it? Absolutely not. This fine couple obviously mapped out a strategy years ago about what they wanted and began to execute. Today, they are doing just fine. Ask if they are rich and they will probably say no. But did you know if you ask a couple who's worth one million if they are rich they say the same? The answer doesn't change until people get to around the $10 million net worth mark at which point they say, "We're comfortable but we're not rich." So you see, it's a relative term.
Now, let's get back to the question that made you read this newsletter. Do you want to be rich by the year 2016? Of course you do but it takes some people five years, if ever, to write out what they want. How many millions will it take? We don't know but it probably won't even take $1 million. I'm almost willing to bet that if we awarded someone three months worth of living expenses plus 10% for the shoes you don't want to admit you snuck in the closet or the money you secretly lost in a bet on the Redskins game thinking they were going to beat a team as good as Dallas, you'd instantly begin to feel a lot richer. I'm also almost willing to bet that the number for you high earning Washington DC metropolitan workers is somewhere in the neighborhood of $20,000 (6k a month in expenses x 3 + 10%). Imagine how comfortable it would be for the next three months to have your expenses vanish. Here's the really good part. I'd be willing to bet with a decent income tax return and a moderate investment plan yielding a 6% return you can all have the three months plus 10% in no time. When you don't know where to start or have a remote idea how, that's when you call The Investment Forum, but I'd bet most of you already have enough insight to get started. I don't just want you to be rich, I want you to live your ultimate dreams but neither I nor the lottery can help you until you can define what that means. With a solid 5 year plan, you can cover more ground than you ever expected. Don't let another self-guided plan that yields the same results as the last five years hold you back.
This month's newsletter is dedicated to all the troops out there defending our expensive freedom who still have time to read my thoughts monthly, the Southern Maryland family who are doing just fine and the shopping lines just waiting to rob you of your dreams this coming Black Friday. There is a definite probability that while you're fighting the long lines too disgruntled to return the items back to the shelves because you've spent too much time and money already which has robbed you of the goals you haven't set, I'll probably be somewhere near a helicopter on a yacht in the sunshine. Who wants to bet me? Now get back on the clock before I yell, "Hey Boss! He ain't working!"
