How You Can Join the Ranks of the New Millionaires

MillionairesIf you read earlier this week about the World Wealth Report's announcement of an 8.3% increase in millionaires worldwide in 2010, you might be wondering how you could get on that list.

The idea's not so far-fetched. The number of high-net-worth individuals -- those with $1 million or more in assets other than their primary homes -- passed 3 million in the United States. That's about 1% of the population, which means a millionaire is probably living within a slingshot's range of you. You could be the next one in your neighborhood.

DailyFinance
attended the conference for the World Wealth Report, researched by Merrill Lynch Global Wealth Management (BAC) and Capgemini, and asked some big shots there and elsewhere what it takes to become a millionaire. The advice was rich in common sense.

Investments"Contribute to your 401(k),"
recommended John Thiel, the head of U.S. Wealth Management for Merrill Lynch. You heard the man. Your 401(k) wants to kiss and make up. It knows it betrayed you during the, um, misfortune. These things happen. But now is the time to reconcile before you do something rash. It's free money, out of the purview of the taxman. "You're taking advantage of time," Thiel told DailyFinance.

Get back into the market.
Are you satisfied with the microscopic interest rates you're getting on your CDs and savings accounts? Go where the rich are going. Many of the new millionaires in 2010 reached the seven-figure mark by taking on more risk in equities, the study said, and more are expected to do the same in 2012. Small cap stocks have been a good choice -- they've outperformed the biggies for several years. Such trends can reverse, but we're just sayin'.

Ultimately, common sense will prevail. Merrill's Patrick Dwyer, whom Barron's rated as the top financial adviser in Florida in 2010, said, "Becoming a millionaire with your personal investments is less about making the optimal investment and more about avoiding the common mistakes: leverage, over-concentration, and a lack of patience."

Stop trying to hit a home run with every investment.
You can score plenty of runs stringing together singles and doubles. An Apple comes along maybe once a decade -- and you could very well strike out trying for the next one. "The key over time is discipline," said Mitch Slater, senior vice president of investments at UBS Financial Services (UBS) in Westfield, N.J. "You won't reap long-term profits if you keep swinging for the fences."

Be passionate about building wealth.
It's time to scrap the "aw shucks, who needs money" routine. Educate yourself. Hire some help if need be. A financial adviser can keep you from panicking when the market stinks and from being blinded by euphoria when it soars, said William A. Lorenz, managing director of the Central/Southeast Division for Merrill Lynch Wealth Management. "It's important to stick with your game plan. There's good days and bad days and good months and bad months, but it's all about having a plan, sticking with it, and having the fortitude to stick with it."

Saving youngStart saving young. The 4% increase in millionaires 45 years old and younger since the 2008 crisis underscores the importance of socking some assets away as soon as possible. Pay yourself first, Thiel said. The more money you can save while you're wet behind the ears, the better. Living with mom and dad right after college isn't a bad idea as long as you have a plan to move out, Slater of UBS noted.

Think about foreign investments. Household goods and foods and beverages in countries such as Brazil, China and India have the potential for healthy profits, Slater said. If you're feeling skittish, note that emerging markets beat the world by 8% in 2010. For the sake of balance, maybe let overseas market ventures occupy 20% of your portfolio, Slater recommended.

Take your time in choosing investments. This gets back to the Warren Buffett Invests Like a Girl philosophy, which you might have read about. Women tend to be far more deliberate in researching stocks, and that has proven to be a winning strategy, Thiel said. Female millionaires grew by 3% since the nation openly wept over our gutted portfolios in September 2008.

Just trying to becoming a millionaire is a good start. It's one goal where falling just short won't hurt so much.

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Bob Panerio

Go where the wealthy play. You are not privy to their inside information, but over time even the crumbs that fall off the table add up.

June 27 2011 at 2:12 PM Report abuse rate up rate down Reply
OMVCO.COM

sound advice though stock market may be a bumpy road in the short term.

June 27 2011 at 1:48 PM Report abuse rate up rate down Reply
radrut3

Ugh. Since so many of you faciists seem to want to turn it into a silly political conversation, why is everyone of you freaks forgetting who keeps stonewalling the budget to save tax breaks for peole making 250K. You forgot who put those breaks there in the first place? Who keeps giving tax benifits to companies that don't want to hire Americans, want to store their cash, and want to big bonus the top brass? All in the interest of keeping the so-called socialist liberals from heavy taxing? I'm sorry, that's as opposed to heavy tax breaks for the wealthiest groups? Ugh. Would you psycho investors and thieving contractors stop using phony conservatism as an excues to pay nothing to the government? People like me have to claim all our exceptiosn on the W4. We don't have a phony 25 tree farm or a failing investment portfolio.

June 27 2011 at 2:36 AM Report abuse +1 rate up rate down Reply
zollette

If I could sell my boogers I'd be a millionaire real fast. If my feet ran as fast as my nose, I'd be an Olympic track $tar like Bruce Jenner!

June 26 2011 at 11:12 PM Report abuse -1 rate up rate down Reply
thaines908

There is no way I will invest in Wall Street again - no 401k and no stock market. I will only invest in assets that I can directly control. Real estate, rentals, businesses, etc. This article will only make your stock broker a millionaire. Screw Wall Street.

June 26 2011 at 10:43 PM Report abuse +3 rate up rate down Reply
MARK

If you're lucky it's easy hit the lottery!

June 26 2011 at 8:31 PM Report abuse rate up rate down Reply
bchrist751

Living below your means, savings, investing, compound interest and time! That's the millionair's secret

June 26 2011 at 7:14 PM Report abuse +2 rate up rate down Reply
Mark Davidsaver

If you really want to see how much you have to save each month for a given return on investment there's a calculator in the savings section of http://www.yourmoneypage.com which will tell you. For example if I want to become a millionair in 20 years and assume 6% return then I need to put aside $2164 each month.

June 26 2011 at 7:02 PM Report abuse rate up rate down Reply
dwight

Two Trillion Spent on Tarp, QE1 &2.. The devaluation of the dollar coupled with low interest rates have wipe out the savings and investment portfolios of millions of Americans. These are the one’s that worked and saved, paided their taxes and put their children thru college in an effort to give them a better life experience than they had..(The American Dream) What did they get for it? Their Children got indoctrinated in to socialism by the schools. They dumbed them down on the fundamental life skills, reading, writing, math and basic economics. The government has sponsored indoctrination of a whole generation of young people taught to feel guilty if they try to succeed and be successful..

The country itself is run by a bunch of narcissistic idiots both republican and democrats are to blame.. Their thirst for power and self enrichment has trumped any desire to serve the electorate..

There is a simple solution no one talks about. It requires basic math and common sense ..Get out your pencil and paper. If you are one of the lucky ones who got a quality education devoid of political indoctrination..

Using the principal of basic integrity and accountability let’s assume that instead of the government giving all these Trillions of Dollars to the same criminal felons that created this problem they simply did one thing..

They apologized to the American people..The Laborers, and the professionals for their failure to serve them.. THEN THEY CARRIED OUT THIS ACTION.. They refunded to each actively working tax paying American a portion of the 2 Trillion equivalent to their contribution ratio.. Consider the consequences of this action.. Those that originally caused this problem would be allowed and fail .. The criminals proscecuted.. Those millions of intelligent people out there who trusted the system would get to choose how to reinvest that money. Jobs would be created. The housing market would be saved. Banks would have to compete honestly for deposits and pay interest rates that retired Americans depend on ..The unemployment rate would decrease to a level equal to the percentage of illegal aliens in this country.. Just IMAGINE!! Letting the individual working tax paying American solve the problem.. Then of couse then why would be need government if they made common sense decisions like that???

Just remember if you are already indoctrinated this solution is already beyond your grasp to understand .. You have already been assimilated into the collective.. You cannot exercise free will and depend on other to make decisions for you… To Those Readers you have my SYMPATHY..

June 26 2011 at 1:06 PM Report abuse +4 rate up rate down Reply
1 reply to dwight's comment
suealiaim

stopped reading when i reached "indoctrinated into socialism"...what a crock. just imagine what the u.s. could be if we didn't spend 58% of our budget on bombs.

June 26 2011 at 2:46 PM Report abuse -1 rate up rate down Reply
thoubelive1

North korea must surrender

June 26 2011 at 10:33 AM Report abuse +1 rate up rate down Reply
2 replies to thoubelive1's comment
savemycountry911

Didn't we say that 50 years ago?

June 26 2011 at 2:37 PM Report abuse +1 rate up rate down Reply
MARK

Better the way it is, there's just too many there to support and too many that would probably work all day for a pack of cigarettes and a bar of soap.

June 26 2011 at 8:37 PM Report abuse +1 rate up rate down Reply