This Is What Will Make You Truly Wealthy

The secret to successful investing is simple. That's what makes it all the more tragic that so many people miss out on their best chance to become truly wealthy.

In the arsenal of the average investor, the best weapon you have is time. If you have plenty of time before you'll need the money you're investing, then you can afford to sit tight through tough markets -- even sustained down markets like the one we've experienced over the past couple of years. You can confidently wait for the market's long-term upward trend to reassert itself, and even take advantage of bargain stock prices to reap some serious gains.

Time is on your side
The sad thing, though, is that so many workers don't take advantage of the period of their life where they have the longest time horizon. According to Fidelity, just 44% of those between 20 and 29 years old who are eligible to contribute to an IRA or an employer-sponsored retirement plan like a 401(k) actually do so. In contrast, by the time you get into your 50s, over 70% of those eligible have started saving in retirement accounts.

There are plenty of reasons why people choose not to start saving for retirement early in their lives. Yet each of those excuses is fundamentally flawed. Let's take a look at some of the most common reasons that people wait too long to start investing for retirement.

1. I'm too young to worry about retiring.
When you're just getting started, you have plenty of more immediate concerns than worrying about retirement. You might have student loans or other debt to pay down. You might be thinking about buying your first home or starting a family. Or you might just want to enjoy some of the money you're earning.

Still, there are a couple reasons why starting early makes sense. First, giving your money an extra 10 or 20 years to grow makes a huge difference to what you'll end up with in retirement. But perhaps more importantly, though, starting to save for long-term goals now begins a good habit that will serve you well for the rest of your life. If you learn to trade a little money now for a lot more in the future, then anything becomes possible.

2. Now's a terrible time to invest.
You might feel like right now is a terrible time to invest. Despite the big rally, companies like FedEx (NYSE:FDX) are still struggling to recover from the recession. Moreover, many stocks, including Dow Chemical (NYSE:DOW), Las Vegas Sands (NYSE:LVS), and Tupperware Brands(NYSE:TUP), have more than tripled in the past six months. Given those run-ups, it's easy to think that you've already missed out on the best gains those stocks will ever enjoy.

The problem with that line of thinking is that there's always a reason not to invest. Back in March, for instance, even well-known companies like General Electric (NYSE:GE) and Starbucks (NASDAQ:SBUX) looked like they were on the rocks. Many stocks, such as Sirius XM Radio(NASDAQ:SIRI), had fallen more than 90% in just a year's time. If you're always convinced that stocks are either too dangerous or too expensive, then you'll never invest -- and you'll miss out on plenty of profitable opportunities.

3. I don't have enough money to make it worth it.
It's hard to come up with money to invest, especially during a down economy. You might easily feel that the $25 or $50 a month that you might be able to scrape together won't do a bit of good in the long run.

But nothing could be further from the truth. Over the course of 40 years, you might reasonably expect to see your money multiply between 20 and 50 times, if you can earn between 8% and 10% on your money. That will turn each of those $25 monthly deposits into $500 or $1,250. A year's worth of saving could put $15,000 extra in your retirement account -- not bad for a modest investment.

Don't delay
As tempting as it may be just to procrastinate your retirement saving another year, the better choice is to move forward with your savings now. It's not the easiest thing to do, but it may be the best move you could make with your money.

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It’s roughly the same amount of time it takes to walk a quarter-mile on a treadmill… whip up dinner… read your children a bedtime story. And it’s how little time it takes to learn everything you need to know to begin investing in the stock market. (Which -- if you’re like most of us -- is something you know you should do… but keep putting off.) The Motley Fool’s Director of Investor Learning is eager to help you start down that venture -- absolutely FREE -- in just 30 minutes a day, for 13 days. Simply click here to get started.

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  • Report this Comment On September 21, 2009, at 5:20 PM, DUPEY wrote:

    Most of the articles I see are for 'those who have time' on their sides, but what about those who don't? What does one who, at 65-70, knowing you probably will out live your money do? My example: no debt, house, cars all paid for. Several hundred-thousand in savings; $15,000/ year income. CD's, money markets, bonds won't do the job. The equity markets are too volatile and mutual funds slow to show big gains except in rare cases. So, any good advice other than live it up and worry about the cliff when you come to it?

  • Report this Comment On September 21, 2009, at 5:33 PM, jimratflorida wrote:

    You are in a Sucker Trap if you keep your assets totally in cash.

    You are lucky in today's environment to get more than two percent on cash deposits.

    Inflation currently takes 1.5 to 3.0%. Taxes take another 20-30%. If you are totally in cash, you need to recognize this.

    It sucks, but this is the way it is. You are going to have to take some risks if you are going to outlive your money.

    There are no guarantees in life - not in health, love, or money.

    A certain percent of your savings need to be in equities. No guarantees there - but what else can a peon do?

    You are not going to get ahead of the curve by taking the "safe" way out. Pick a smallish number that you are comfortable with - educate yourself on investing - and hope for the best.

    Getting investment information is so much easier now than it was 20-30 years ago. The internet has replaced trips to the library to look at 90-day-old information.

    You have stated your problem clearly and succinctly. Your letter shows obvious intelligence. You can do this.

    You have no other choice.

  • Report this Comment On September 21, 2009, at 6:01 PM, htownjester wrote:


    Some tips on how to organize your retirement:

    1) Stop reading these articles looking for a silver bullet. The articles are more to inspire and encourage, and sometimes have really good investing tips, but do not constitute a money management program.

    2) Set a budget and determine how much you NEED to live. Then add some WANT items so you come up with a range which is an absolute floor annual budget at the low end, and a budget that will allow you to do some things you truly want.

    3) Once you have your budget determine how much you will need to earn on your savings to augment your $15k/yr.

    4) Once you have the number from 3 determine what percentage this is of your savings. This will give you the expected rate of return you will need just to live.

    Assuming you need a return of at least 5% why not put your money into dividend stocks such as PAYX, BP, MO and others? Putting your savings into a basket of stocks which pay dividends should be good for 5-7% annual, or more if you are savvy and look around. On 200k (assuming of course that "several hundred thousand" of savings is 200k) that 5-7% return is $10-14k per year. If all of your basics are paid for and you have no debt, living on $25-29k/yr should be easy. Though it may not include many trips to france and only a modest wine budget. For reference my Dad is retired and living on less than this. He's not traveling much but is none the less quite happy in similar circumstances as you.

    If you are willing to have some lumps in your returns, and, in an extreme situation, willing to eat Raman if necessary, I would advise you put your money into BRK-B, MKL COST, ORCL, and/or FFH (my personal favorite) or an otherwise suitable combination of very good long-term investments. These should generate 15%+ annual over time. Again though, you need to be able to ride out dips and this will require fiscal discipline and some significant cuts to the non-essentials in down markets.

    If you want more from your savings, you will need to consider seriously learning about investing or you will need to hire a pro.

  • Report this Comment On September 21, 2009, at 6:40 PM, ironyworks wrote:

    The premise is based on the historical assumption that US fortunes will continue to rise as they have in the past.

    We are no longer ascendant and now are in the decline while China eats our lunch.

    If that's true, and it seems to be, then assuming that the value of one's US stocks will rise at 10% over the long run, is not plausible any longer.

    I invested small amounts in critical bio-techs when i was poor, only to have those investments snatched out from under me by buy-outs, etc when the value of the stocks sagged.

    Perhaps the most reliable investment is to invest in the hopes of new investors? sigh..IW

  • Report this Comment On September 21, 2009, at 6:48 PM, edshock wrote:

    I am always amazed by the reasons people don't consistantly invest for themselves. "Pay yourself first" if you have a 401k, after a few weeks on not seeing the money you don't miss it. If you have a 401k with a match it's "FREE money" If there's no match the government is still subsidizing your contribution by allowing you to to them before taxation.

    Self employed individuals have even better options.

    I just don't unserstand


  • Report this Comment On September 21, 2009, at 7:12 PM, whitemice wrote:

    There have been some great opportunities to invest in income producing dividend stocks especially since the beginning of this year. The stock of many of the best companies in the world has been on sale--and market moves have recently raised most boats with the rising tide. When PE ratios are way down on long-term consistent divident stocks, one should take the tiime to evaluate long-term prospects for those stocks. Some examples this year include PG, BP, TEVA, IBM, PEP, SLB...there are many more out there. Of course, one cannot rely on past performance, so due diligence must be done. An example of a long-term dividend payer which was caught in the financial system collapse over the last year is GE. Whether or not it will fully recover its stock price is anyone's guess. Cutting a long-term dividend is often a last resort for a large company which may be on the brink. But for many other dividend payers, there have been discounts this year which actually increased the yield on these solid companies. Do your homework by finding lists of dividend payers and making sure that the company still has great management, a good financial position (such that dividends will continue without putting the company at risk) and distinct competitive advantages. Remember, dividends are taxed at a much lower tax rate than regular income or interest. Watch for value plays in these stocks and snap them up for regular income.

  • Report this Comment On September 21, 2009, at 7:32 PM, ds10 wrote:

    To Dupey:

    I was in the same boat. I wanted a stream of income I could count on in retirement. Something less risky than equities ( an above comment has merit: we may no longer be able to count on a perpetually rising stock market), yet better than the paltry earnings of CD's. I found the solution in annuities, both fixed and variable, from several different issuers (did not want all eggs in one basket).

    I am now retired and most comfortable with this solution. I have read the comments of equity-types who pan annuities---they are wrong! The annuities are with large reliable issuers (for ex.,Fidelity) and I am pleased with this constant source of monthly income.

    When I started the annuities early in 2000, a $100,000 single premium immediate fixed annuity guaranteed $800/month for life. In the present environment, the monthly income will most likely be less, probably closer to $650-$700/month.

    I still own low-risk stock but the annuities provide the comfort.

    Look into this.

  • Report this Comment On September 21, 2009, at 8:07 PM, clayton666 wrote:

    WHY IF ONE OF THE 5 GREAT STOCKS YOU RECOMMEND = GHM isn't doing anything just going DOWN = bad recommendation

  • Report this Comment On September 21, 2009, at 8:19 PM, thisislabor wrote:

    so anyways, i'm 24, and i just wanted to say though i "know" everything your telling me to do here, hearing it again spelled out clearly really helps me stay focused and on track.

    thanx guys.

  • Report this Comment On September 21, 2009, at 8:21 PM, Sozurmama wrote:

    i thought it was going to be "love" :(

  • Report this Comment On September 21, 2009, at 10:52 PM, PsycheDaddy wrote:

    It's always fun and entertaining to read the comments posted here. I am a new retiree, sold my business and need to find investments. I am cashed out with no debt at the time but want to make money to give to kids. I am 57 and enjoying not doing anything after owning a 24/7 retail business. I started watching the markets since last fall. Watched the November and March 9 lows. People said buy and some said it would go lower. Now. I'm here still watching, never buying. I know I want and need to jump in but the waters too cold. I think I will slowly put one toe in and test the water. And gradually put a little more at a time. I don't like the current administration and something tells me inside that I need to see what this government does in the next few months and see what happens with "healthcare" (I don't this will have a major effect on the markets) and "cap and trade". If "cap and trade" goes through, it will be bad for individuals and companies and should cause markets to go down. But if they go up, the fix is in. I know the markets are not reacting to bad news like I thought they should. Most news is bad and the markets keep going up. I think I'll wait for "cap and trade". Am I wrong? I can always buy some RE, Gold, or maybe a farm.

  • Report this Comment On September 21, 2009, at 11:23 PM, DutchManDan wrote:

    Hey everyone, I'm 28, regularly investing in mutual funds and purchasing individual stocks. However I'm wondering what is going to happen in the long run as the baby boomers are all going to want to cash in their retirement plans at a faster rate than their children will be able to purchase stock. Do you believe this could really eat into potential stock market gains (perhaps less than 8% per year returns), or perhaps you believe that it could result in falling stock prices? Would love to know your opinions, thanks!

  • Report this Comment On September 21, 2009, at 11:33 PM, DonaldS812 wrote:

    To Dupey, et al,

    I read these postings occasionally. I consider the information given and apply it to my situation. Most of the posts in this thread are concerned with the income side of the equation, which is important. I look at ways to affect the expense side of the equation. There is no indication of where you live, so the information will be generic, but can be applied to any climate.

    Is your home as energy efficient as can be economically justified by your climate and energy costs? Uncle Sam will help with a tax credit for many efficiency improvements. This will require some research on your part, but it is no more difficult than investigating possible investment options, and you can be fairly certain there will be a positive return on this investment, if you don't go hog wild.

    Does your local utility have a program to conduct an energy audit and make recommendations for improvements?

    I get a 10% cut in my electric bill for the summer months because I allowed my utility to install a switch they use to disconnect the compressor of my central air unit when their load reaches a certain level. I have never noticed that the compressor is off in the 10+ years the switch is in place. The installation cost me nothing and I get a reduction in my energy costs.

    I work for a company that provides energy audits and does the work recommended by the audit. I consider it part of my job to spread the word about energy conservation as far and wide as possible.

    On the income side, my employer puts an amount equal to 10% of my salary in an investment vehicle I select. I don't need to match, but I also put some aside in the same vehicle, a mutual fund. We are somewhat limited in that the company, about 125 people, is 501c3 and the mutual fund must meet 403b requirements.

    I am starting to envision pulling the plug in about 18 months. Lots to think about.

  • Report this Comment On September 22, 2009, at 7:01 AM, DACircles wrote:

    I would go even simpler then most of the suggestions above. Take 10% of your total savings and put it in a money market account. Divide that amount by 24 and pay yourself that much each month out of the money market. Take the remaining 90% and put it in Vanguards Wellington Fund (low fees, diversified, over 30% in bonds) each year transfer 5% of the balance in Wellington to your money market fund, divide the balance by 24 and that is your new amount to withdraw from the money market fund until 12 months from now when you make your 5% deposit again. Good retirement my friend, good luck.

  • Report this Comment On September 22, 2009, at 10:17 AM, DutchManDan wrote:

    Hey again,

    What I meant by my last post of children not buying stock at as fast of a rate as their parents did is twofold:

    a) they don't seem to save as much as their parents did

    b) the parents don't seem to be having as many children as they used to, thereby lowering the potential purchasers of stock.

    c) the parents will all be retiring in the next 20 years and all cashing in their retirement accounts..

    These things I saw as lowering the demand for stocks and perhaps slowing the growth down from the standard "8%/year".

    Any comments?

  • Report this Comment On September 22, 2009, at 5:05 PM, voicedupdotcom wrote:

    Why not purchase invsestment property and have residual income yearly?

  • Report this Comment On September 22, 2009, at 5:45 PM, Alex1963 wrote:


    Pay a good financial advisor to help you. I see some tips I would agree with above but I wouldn't dream of advising someone I haven't peppered with questions for at least15 minutes. I met with an excellent one a few years back who offered a free initial consult and then billed at a reasonable hourly rate thereafter. Now that would be a good investment for you, IMO. Also I got a lot out of reading up my own from the library starting with The Dummies series like Investing For Dummies, Retirement Planning. And then went on from there. It helped me to even know what questions to ask the Financial Planner.

    best of luck!


  • Report this Comment On September 22, 2009, at 5:51 PM, mikecart1 wrote:

    I started investing in elementary school. First it was sports cards, then it was jewelry, then it was poker, then it was stocks. I'm not a business man, I'm a Business... MAN!

    Born to be king!


  • Report this Comment On September 23, 2009, at 11:29 AM, gogojoann wrote:

    I do think most of your advice is great for the Young ... but I, for one, have long since passed that era of life. I am 78 and have seen my "wealth" disappear. I lost more than half of my life savings in the "recession". I would appreciate some thought given to how to try and recover. Do I sell my AIG stock and lose everything I put into it? And Bank of America? And City Group? How much should I throw away? Help ! gogojoann

  • Report this Comment On September 25, 2009, at 1:28 PM, GOFORAWILDRIDE wrote:

    The easiest way to make money is to invest in dividend stocks such as CFP 26%,CIK 9.8%, CLM 16.8%,DHY 11.8%, DPO 15.8%, IGD 14.3%, PHK 14.1% OR PVX 11.3%.

    Each of these stocks pay dividends on a MONTLY basis.

    I have either owned or own these stocks and get my dividend paid like clock work. One to maybe take a chance on is CYRV this is a quarterly paid stock and the upside is that the stock price is around 1.50 27% the future dividend is 175% once the market comes around. I personally will wait until after the EX-DATE and will look at buying this stock if it drops down to around 1.00 or lower then the dividend payback will be around 40% and future dividend will pay 260%.

  • Report this Comment On September 25, 2009, at 9:21 PM, TheodoreKGuy wrote:

    There is only one way to wealth, make more than you spend.


  • Report this Comment On September 26, 2009, at 6:26 AM, deadlysaber wrote:

    When it comes to planning your retirement, it is always better to start sooner than later. You will be certainly have more time to relish your golden years if you've stocked away a good sum of money and have given it ample time to grow and work for you. You should then plan your investments in the long-term instead of making them into quick-turnover investments. It is certainly tempting to invest in a venture that has a quick return. However, it seems impractical to put your future at stake with high risks and uncertainties.


    Money without intelligence is like a car without a road.

  • Report this Comment On September 27, 2009, at 11:29 PM, mariocavolo wrote:

    Sorry optimists, but only A MORON would start to invest now except in carefully filtered listings that are shown to somehow still be undervalued bargains....find me one please......Cheers, Mario

  • Report this Comment On September 28, 2009, at 8:08 PM, JohnWrote wrote:

    For learning to invest for the short term there are ways to risk smaller amounts of money to seek larger gains that will grow over time if you can find the right opportunities. I am using options on stocks that allow me to get a 50% or more return in a few days or a few weeks. I am growing that account over time where that can eventually become an amount that I could use as monthly income in the future. The key I have found is find a options expert that will teach you to find winning trades or use there service to provide you trading ideas that you can use to make trades.Start with a $500 or $1000 account and it can grow to $25000 in a year and $100000 in 2 years if you get the right teacher. Hope that helps some of you older guys to grow your accounts back.

    And if you are still holding AIG or BAC or C I would sell before they crash again. Cut your losses before they go down again.

  • Report this Comment On September 28, 2009, at 9:36 PM, jfrankh57 wrote:

    It certainly nice to see and hear all the buzz about SiriusXM, but one question about the China and India plays---yeah, I'm an long term investor in this company---Where is the infrastructure to support an expansion into these markets. Right now, it seems the only region supported is North America. Of course, if a huge market opens up in Asia, it would make sense to place satellites and other support infrastructure in that area of the world.

  • Report this Comment On February 22, 2011, at 4:12 PM, Lucracy wrote:

    I started my Roth IRA last year (I just turned 26) and am so glad I did. The only thing I regret is not starting sooner.

  • Report this Comment On May 19, 2012, at 7:51 AM, malo182uk wrote:

    I think you should start investing sooner than later.No point in risking your money at 65 unless you have piles of cash.Look at


  • Report this Comment On April 02, 2013, at 7:14 PM, 5talentsfinance wrote:

    people are living longer so 65 is like 50 I agree you cant risk as much but the fact that interest rates are so low seniors have no choice but to take a bit of risk to survive. Dividends are a must! If there isnt much money then create an online business with very little money since not much is required but your time.

  • Report this Comment On November 29, 2013, at 4:07 AM, indianmoney wrote:

    For a young person the thought of retirement is a distant one.With things being so expensive ones thoughts is on day to day expenses.The art of splurging on wants rather than needs makes sure that one has no money in his pocket and planning for a retired life is not even considered.The first practice youth need to learn is to distinguish between a need and a want.Once a minimum amount of saving is done the rest of the amounts can be invested towards a retirement corpus leaving sufficient time for wealth to accumulate.The early bird gets the best worm approach needs to be followed.

  • Report this Comment On September 09, 2014, at 2:15 PM, Goodsteward55 wrote:

    I have never invested in stocks, and today I jumped in with both feet.. Recently I bought a Samsung Galaxy 5 series phone, and went to the phone store to pay my first bill, and saw the watch/wrist band device, and loved it! This time putting my $$ where my thought is, and that being this is a great idea that will catch on. I will buy one now that I have invested in the technology.

    As a newbie, I appreciate you more experienced investors, and look forward to gleaning a lot of good information from you.

  • Report this Comment On September 09, 2014, at 2:20 PM, Goodsteward55 wrote:

    FYI, after seeing, Wolf of Wallstreet, I won't be investing in Penny stocks anytime soon! For those referring to investors as MORONS, nothing ventured, nothing gained. With your attitude I predict your gains will be nil.

  • Report this Comment On September 09, 2014, at 2:23 PM, Goodsteward55 wrote:

    Thank you JohnWrote for the tip! Next spring I will do that!

  • Report this Comment On September 26, 2014, at 11:06 PM, traci120671 wrote:

    I am 42 years old, self employed, an in a panic over retirement! I have about $3500 in American Funds and that is it. My husband is a lot older than I am and if he passes before I do I will get 80% of his yearly retirement of $32,000 until I die. Other than this I have $35,000 in the bank, about $10,000 in credit card debt, I owe two more years on my car, and I owe 28 years on a mortgage of $142,000. I have approximately $5000 to invest and need to know what is the best way to invest to grow my money for retirement. HELP!

  • Report this Comment On February 02, 2015, at 8:24 AM, WickedWillie wrote:

    "Time & tide wait for no man," said old Canute "up to his neck in it" on Southampton water.

  • Report this Comment On February 28, 2015, at 11:31 AM, qukedynil wrote:

    Here's the path to retire on your own terms, in 7 steps:

    1) Pay off your debts as fast as you possibly can. If this means living in a crappy studio apartment and eating ramen everyday for a couple of years, do it. If you want to buy a car, get a reliable beater. Get insurance for $25/month from Insurance Panda. Forget about buying a house until your debts are paid off.

    2) Once you are out of debt, stay out of debt. The only exception to this rule is a vehicle and a house. If you want to get a nicer car, buy used and be able to pay it off in a year or 2.

    3) If you are going to stay in the same spot for at least 10 years, buy a house, preferably with at least a little bit of usable land. An acre is good, 5 acres is better. Take the amount you are pre-approved for and cut it in half - that's how much you should spend on a house. Come to the table with at least 20% down and make a couple of extra mortgage payments every year. If you're going to be transferred or relocate every 5 years, forget about buying a house and rent instead.

    4) Develop multiple revenue streams. Do contract work. Start a business on the side. Invest in a business as a silent partner. Raise chickens, breed dogs or grow apples. Build websites. Buy and sell antiques. Acquire rental property. Sell something that generates residual income. Learn to play the currency markets or trade stocks. Do whatever you can to generate income from multiple sources.

    5) Grow these multiple revenue streams to the point that they generate enough consistent and reliable cash flow to replace your current income.

    6) Make as much as you can. Save as much as you can. Give away as much as you can.

    7) Retire!- the sooner, the better. Be sure you understand that "retirement" doesn't necessarily mean you stop working, it just means having the freedom to do what you want to do, when you want to do it.

    Don't be foolish and fall into the trap of trying to measure your wealth by the value of your assets. Markets change. Valuations fluctuate. Instead, measure your wealth by the amount of cash flow your assets consistently generate.

  • Report this Comment On June 03, 2015, at 8:22 AM, WickedWillie wrote:

    Time & tide waits for no don't miss the boat.

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