How to become a millionaire

The goal of this blog is to give free advice to help people (preferably under 30) become millionaires by the time they retire. This goal may seem far fetched, but it is possible for a middle class American to retire and support themselves long after they stop working.

Why is this important? Social security is a joke and pensions are becoming a thing of the past. It is becoming increasingly important to take care of yourself financially. If you follow this blog, I will give you everything you need to know about securing your financial future.

Rules of thumb to investing:

1. As a rule of thumb you should invest 10% of your post-tax income

2. Believe that the stock market will always go up in the long term.... It is the American way.

3. Diversify your investments. Don't put all your eggs in one basket.

4. The best method to invest long term is mutual funds. Mutual funds are a collection of many different stocks. The stocks are chosen by the fund manager. Buy and hold.

Where to invest (in general):

1. Invest in your company's 401K. A 401K just means a selection of mutual funds that you pick using pre-taxed dollars. Your company typically matches a percentage of what you contribute. This is awesome. Take advantage. You pay the taxes on it when you take it out.

2. Invest in a Roth IRA. A Roth IRA is an account that you can put up to $5000 per year to invest in whatever you want. The key is that you do NOT pay taxes on your money when you take it out. Woohoo!

If you invest in your company's 401K and you personally invest $5000 per year in a Roth IRA you can become a millionaire by the time you retire. The earlier you start the better.

Help on selecting mutual funds will come in future blogs, but if you want a good starting point find an Index fund. An Index fund is a mutual fund that follows the Dow Jones industrial Average or the S&P 500 almost exactly (two very well know American indexes)

Please write with any questions you may have!