Using The Stock Market To Become A Millionaire
In a previous article, I explained that to become a Millionaire you would want to invest in one of three venues: The Stock Market, Real Estate, or owning your own business. I would like to give my personal experience in all three. This article will focus on the Stock Market, but please look up the articles on “Real Estate” and “Owning your own Business”.
I started investing in the stock market when I was twenty-one years old, back in 1983. At that time, I did not know a lot about the stock market and most people had no investments in the market. It was just about that time that pension plans started investing in the market and mutual funds started to be formed.
If I had known then what I know now about the stock market, I would have invested everything I could in the market. At age twenty-one, I was very conservative and young, and the stock market did not mean much to me. I would occasionally purchase some stock, but most of my money went into CD’s because I knew they were safe. At that time, CD’s were earning about 6%, which I thought was fantastic. Little did I know that the stock market over many years would average several points higher than my CD’s, and with the knowledge of “The Power of 72”, this would have made a significant difference.
I spoke with my first financial advisor in 1987, which convinced me to invest on a weekly basis with some stocks that had a great history of paying out conservative amounts of money and had the potential to grow. Being young and leaning towards the conservative side, I started investing and watched my money start to grow, but not enough to get hooked on investing in the market.
It was not until 1993 that I talked to another financial advisor who had called me from an inquiry I had made about investing on the TV. At first I did not want to be bothered, but the advisor convinced me to spend an hour with him so he could explain what “American Express Financial Advisors” could do for me. My wife and I agreed to meet with him and after an hour, he me not only convinced to invest with his firm, but also had me excited in doing so. He re-introduced to me the “Power of 72” with many examples and felt comfortable that with our age and salaries, we could become financially secure before our retirement. That was the starting point where I would track my investments and do financial statements quarterly to see how our assets have grown.
Since 1993, I’ve been with the same financial institution and have been very satisfied. I allow the professionals to make well-educated suggestions on where my money should be invested and how to make the best of these investments. Because my portfolio has grown to a substantial amount, my advisor now works on a commission of a percentage of my growth per year versus receiving money on buying and selling. This gives my broker an incentive to make as much as he can for his clients because that is what pays his salary.
The bottom line here is to use the stock market as one of your tools towards being a millionaire. What percentage is totally up to you and your comfort zone, but I strongly advise you to get a financial advisor that has your best interest at heart.