How to Get Rich and Become a Millionaire in Your Spare Time

Whether you need more income to pay your bills or just want some extra cash to enjoy the activities you love, there are ways to make more money and build your wealth. You don't have to beg your boss for a raise, take a part-time job at the mall or risk your savings with high-stakes investing. With just a small investment of your time each week, you can take the things you already do and make money doing them.

Are you handy with a sewing machine? You could make some extra cash on the side tailoring clothes or custom making drapery and linens. Are you a good writer? You might be able to lend your services to local business that need some help creating brochures, training materials or sales flyers. If you have shed full of lawn and garden tools, you can do yard work and mow lawns for older neighbors, who can no longer do it themselves.

By identifying how your unique skills and experience can fulfill a need in your community, you can create a side business to earn some extra cash. All you need to do is spread the word to others. The internet is a great place to start.

There are lots of free resources you can use to advertise your services, like Craigslist and social networking sites like Facebook and Twitter. In time, you can create a nice supplemental income or build your business into a full-time venture if you so wish. If you want to make some extra cash, explore your options. What have you got to lose?

Forbes Rich List - World's Billionaires in 2009

On March 11, 2009, Forbes released it's most recent list of the world's wealthiest people. The annual list of billionaires shrank from 1125 in 2008 to 793 in 2009. Furthermore, the average net worth of the billionaires on the list dropped 23% over the previous 12 months to $3 billion per individual.

Americans dominated the billionaire list this year, carrying 45% of the list's slots and holding 44% of the wealth on the Forbes list. Economic declines in the last part of 2008 are partially to blame for the decline in both wealth and number of billionaires on the March list with some individuals losing 50% or more of their net worth over the last 12 months. Overall, the collective net worth of the richest people is estimated around $2.4 trillion, a whole $2 trillion lower than last year's list.

The top two slots remained the same as previous years, although the two top billionaires did switch positions from last year's list. Microsoft founder Bill Gates regained the #1 position followed closely by Berkshire Hathaway founder Warren Buffett, last year's leader, in the second slot. Bill Gates was estimated to have a net worth of $40 billion, down $18 billion from last year's list. Warren Buffett, last year's top billionaire, lost approximately $25 billion in net worth to end at $37 billion for this year's list. The number three spot went to Carlos Slim Helu, the Mexican telecom mogul, who lost $25 billion to end with a net worth of $35 billion.

The remaining top ten spots on the 2009 Forbes billionaire list went to Lawrence Ellison, Ingvar Kamprad, Karl Albrecht, Mukesh Ambani, Lakshmi Mittal, Theo Albrecht, and Amancio Ortega respectively. Members of the Walton family, heirs to the Walmart chain of stores, remained on the list in positions eleven through fourteen.

Almost all of the billionaires on the list lost money over the previous year. India's Anil Ambani, head of Reliance Communications, was the biggest loser with a total loss of 76% of his fortune equalling $32 billion. Ambani did stay on the billionaire list, however, unlike 29 other Indian business owners who disappeared from this year's list. 24 Indian billionaires remained on the list, however, but most of them lost large percentages of wealth over the course of 2008.

Much like India, Russia lost most if its billionaires during 2008, too. 55 Russian billionaires dropped off this year's list, two-thirds of the number that were on the Forbes billionaire list last year. Among the lost wealth was Vasily Anisimov whose fortune plummeted with the value of Metalloinvest Holding. His daughter, Anna Anisimova, is known for being the "Paris Hilton" of Russia.

Some of the billionaires from Forbes 2008 list lost almost all of their fortune. Among them was AIG head Maurice Greenberg and former Citigroup Chairman Sandy Weill, both of whom lost most of their wealth after their respective bank failures and government bailouts.

Despite massive loss of wealth, there were a few individuals that flourished in 2008. Joaquin Guzman Loera, a cocaine supplier, Wang Chuanfu, whose company began selling electric cars in late 2008, and John Paul Dejoria, founder of Paul Mitchell and Patron Tequila, all prospered over the last twelve months, showing the rest of the world that there is still hope in finding worthy investments in a failing global economy.

How to get rich or richer?

When giving my tax-planning, wealth-building seminars, I like to ask the audience, "Raise your hand if you know the Rule of 72 and how it works." Typically, about one-third of the audience raises their hands.

I'll explain this rule to be sure that we all understand it. Write the number 72 on a piece of paper. Assume you are getting a 10 percent rate of return on your investment. Divide 10 into 72 and you get 7.3, or the number of years it will take your principal sum to double at that rate. For example, $10,000 compounding for a 36-year period will double five times and eventually become $320,000.

What if that 10 percent return was subject to a 40 percent income tax at the state and federal level? Then you would only have a 6 percent return because 6 into 72 results in 12-12 years to double your money. This means that $10,000 will only double three times over a 36-year period.

When you compare $80,000 to $320,000 when tax deferred, it can make a huge difference.

Two factors that are measurably important to creating wealth are rate of return and tax deferment.

If you have money in a qualified plan such as a 401(k), profit sharing or any of the many IRAs and other qualified plans, then you are on the road to tax deferment. If you are the owner of a Roth IRA or the new Roth 401(k), then wave your tax-free flag high.

Now we come to the hardpart--the rate of return. How would you like to average a16 percent rate of return (or greater) per year? With a senior settlement (SS), you can.

An SS is simply the purchase of an existing insurance policy from a senior citizen (who is 65 years old or older) by an investor. The selling senior, who no longer wants to pay premiums, gets a much larger price for the policy than the cash surrender value from the insurance company. The investor wins by making a large profit without risk (because the senior is sure to die).

How do you become such an investor? There is a public company, trading on the NASDAQ, that makes it easy. The average rate of return on SS investments is 16.36 percent per year and has been greater than 16 percent throughout the company's 14-year operating history.

You can become an SS investor in one of three ways: taxable, tax-deferred or tax-free. Let's examine these possibilities:

Taxable--This category includes your own funds or funds you control (such as corporation or other business entities, family limited partnerships or any non-charitable trust).

Tax-Deferred--Almost everyone can participate via their qualified plans (IRAs--traditional or roll-over, 401(k)s, profit-sharing and other qualified plans). The trustees of pension plans or other plans that are not self-directed can join the profitable fun by investing the plan funds in SS for the benefit of all participants.

Tax-Free--A Roth IRA or Roth 401(k) can fatten your tax-free accumulations. Charitable entities--charitable remainder and lead trusts and family foundations--are a perfect fit.

Because SS plans are probably new to many of you, here's a suggestion: Show this article to your professional advisors--CPA, lawyer, banker, financial planner and others. Discuss SS from at least two aspects concerning your investments (taxable and otherwise): 1) determine how an investment in SS compares to other possible investment choices, and 2) compare existing investments to your long-term and short-term goals.

Do you want more information about how you can earn an average 16.36 percent per year, without risk? Fax me your name, address, phone numbers for business, home, and cell, and include your estimated time to invest. Please note that the minimum investment amount is $50,000 for accredited investors

The easiest way to get rich!

Judging by their behavior, most people have an obsession with wealth. Politicians promise to create it, most popular magazines are filled with gossip about those who have it, and the average person spends much of their adult life trying to obtain it. We are creatures obsessed with money, partly for what it can buy, but also as a thing of value in itself.

But most people misunderstand money. They don't really know how to obtain it, or how to hold onto it once they have it.

If you're interested in getting rich, I'm going to give you the simplest formula for doing so. In fact, if you follow it you're virtually guaranteed to build enough wealth to get you into the top 5% of society. As the shampoo advertisement says: "It won't happen overnight, but it will happen".

The hardest way to get rich
Before I go into my formula, let me tell you about hard ways to get rich.

One of the hardest is to be born into it. Of course, if you happen to enter this world as a Hilton, a Gates or a Windsor, then life is sweet. But since 99.9999% of the population aren't that lucky, I'm assuming you didn't win that particular lottery.

And speaking of lotteries, gambling is another very difficult way to get rich. Sure, some people buy a lottery ticket and win big, but most don't. You can gamble your entire life and you'll most likely end up broke rather than wealthy.

When I was younger, I thought the easiest way to get rich was to become famous through some kind of creative act. Stephen King got rich writing horror novels, so why not me?

I'm now much wiser and realize that the vast majority of novelists never even get published. Of those who do, most wallow in obscurity. Only very few make it anywhere near the best-seller list, and only one in a million will achieve any kind of serious wealth.

The same fate awaits the majority of musicians, software company founders, sportspeople and website creator. For every Google that makes its owners billions, there are a million websites that lose money. Creativity is the most fun and rewarding way to get rich, but it's also a very difficult way.

The reason the media raves about and idolizes those who've built wealth through creativity is because they're so rare. You don't hear about the vast majority who wallow in obscurity and poor pay, because they're not interesting. "Young genius makes $1 billion from website" is a great headline "Ten thousand young geniuses make nothing from their hard work" isn't.

I'm not saying you shouldn't keep your dreams alive. It's one of the best parts of life. But this article isn't about the most fun way to try and get rich - it's about the easiest way.

Okay, here's the system.

Step 1: Get a well-paid job
This is a reasonable amount of work, and takes a few years, but it's a virtually guaranteed way to make a good income. If they're willing to put in the work, almost any intelligent person can get a job paying $100,000 or more within the space of a few years. While it's not easy, it is by far the easiest and most likely way to secure a good income. In fact, I've already written an entire article on how to get a job paying more than $100,000 a year for those who wish to pursue this avenue.

Step 2: Get good tax advice
However you make your money, your number one expense is likely to be funding the government. In most developed countries, the average worker pays around 30% of everything they earn straight into the taxman's pocket. If you've taken my job advice, you'll most likely pay even more than that.

While taxation is necessary to fund the good things governments provide, you don't do yourself any favors by paying more than your fair share. If you're serious about building wealth, get a good accountant who understands how to legally minimize your tax bill.

Step 3: Save 20% of everything you ever earn
As soon as you get paid, arrange to have 20% of your income removed into a savings account. Many banks can do this automatically for you. Keep your savings account separate from your spending account, and you'll barely miss this money.

There's a saying in economics "expenses rise to meet income". This means money that's easily available to you is certain to be spent. That's why most people's paychecks disappear before their next payday. They get used to having a certain amount to spend, and habitually run down their bank account.

Have your savings moved somewhere it's a hassle to get them out of to avoid this risk. Many high interest accounts require you to give them a few days notice, which is ideal for this purpose.

Step 4: Conservatively invest the funds that build up in your savings account
Once a month, go into your savings account and divide the money by investing it into the three core conservative assets: shares, property and cash. Open a mutual fund account for shares, a property fund for property, and a money market fund for cash. Look for share and property funds that invest in a broad range of assets and most importantly charge very low fees. An index fund is ideal for the shares. An index of property funds is ideal for property.

Put an equal amount into each account. This will diversify you against risk in any one particular asset. If you're younger, this rule is a little bit flexible, allowing you to take a little more risk and put more into shares and property if you like.

Step 5: Reinvest any income you get from your assets straight back into buying more assets
Mutual funds and property funds pay dividends. Money market accounts pay interest. Don't take this income into your spending account. Instead, select the option to have it reinvested into the fund that generated it.

Step 6: Never touch these funds and do your best to ignore them
The business press, like the mainstream press, loves a crisis. "Shares to skyrocket" or "Property to plummet" headlines will sell many more copies than "Things to continue steadily". All markets go up and down. Every day, some speculation will be published about some crisis or opportunity.

Ignore it all.

Just keep putting the 20% into your assets. Sometimes they'll go up and sometimes they'll go down in value. But over the long term, they'll almost certainly go up.

Step 7: Wait a decade
Do what I've outlined above and in a decade you'll be rich. Sure, you won't be Bill Gates, but you'll almost certainly be in the top 20% of wealth holders. Wait another decade and you'll be in the top 5% or higher.

That's the plan. It's not the most exciting or glamourous way to build wealth, but it's the easiest. Quite simply, this is how most rich people got there.

You too can join them, if you follow it.

Four easy steps to pay yourself first

1. Create an account that is separate from all your other accounts. This account should be only for a specified goal, usually saving or investing. If possible, choose an account with a higher interest rate--usually these types of accounts limit how often you can withdraw money, which is a good thing because you're not going to be pulling money out of it, anyway.

2. Determine how much you want to put into the account and at what interval. For example, you can decide to put in $300 per month, or $150 per paycheck. This will depend on what you intend to do with the money. For example, if you want to put a $20,000 down payment on a home in 36 months (three years), you’ll need to save about $550 per month every month.

3. Put that money into the account as soon as it is available. If you have direct deposit, have a portion of each paycheck automatically deposited into the separate account. You can also set up an automatic monthly or weekly transfer from your main, active account to your separate account, if you can keep track of your balance enough to avoid overdraft fees. The point is to do this before you spend money on anything else, including bills and rent.

4. Leave the money alone. Don't touch it. Don't pull money out of it. You should have a separate emergency fund for just that--emergencies. Typically that fund should be enough to cover your for three to six months. Do not confuse an emergency fund with a saving or investing fund. If you find that you don't have enough money to pay your bills, look for other ways to make money or cut expenses. Don't charge them on your credit card (see Warnings below).

5 easy steps to retire in 30s

1. Define the dream, while documenting the reality. How do you want to spend the rest of your life, post-retirement? Where do you want to live? What do you want to do? And most importantly of all, how much will it cost, year after year, for the rest of your life? This will tell you how much money you need to save and what kind of investments you're going to have to make in order to support your retirement lifestyle. Don't forget to include things like health insurance and the effect of inflation. Make a detailed spreadsheet to chart all these variables exactly.

2. Make a lot of money. Perhaps the quickest, high odds way to do this is by focusing on landing a high paying job. Consider the types of jobs that pay extraordinarily well in exchange for hard work, little psychological satisfaction, and a punishing lifestyle. After all, you're not choosing a career in the sense that most people are, seeking lifelong satisfaction, as you hope to be only in this job for a decade. Focus on jobs that will reward the fact that you are willing to work harder than anyone else. Some suggestions:

3.Investment banking - These Wall Street jobs can pay extremely well. In exchange, you sell your soul: the hours are a grind, the work is dull, and your boss is an egomaniac. But the goal is to get in, work hard and bank the money. Focus on delivering the results, and watch your peers melt away as they think "there's no way I can do this for 40 years" - you know you don't have to.

Sales (positions in high-ticket industries, such as many high-tech enterprise software companies) - Because your pay is directly linked to your sales, and your sales are in a large part proportional to how hard you are willing to work, you can earn a lot doing this dull job of sucking up to corporate IT drones.

Engineering - Software development, bio-tech, and other technical positions are high risk paths to wealth. Unlike the investment banking and sales which have high current income, many engineering jobs only hit the jackpot on chancy stock options. However, if you join early at the right startup, you might be be able to Buy a Private Island after 4 years of work. But more likely, you will grind away endless hours for an incompetent 27 year old CEO and his insatiable venture capital masters before the company goes belly up, leaving your options worthless.

Lower your expenses. The #1 reason people in high paying salaried jobs are still working hard when they are fifty is because they can't keep their spending under control. To soothe their agony regarding their dull, demanding job, they placate themselves with toys that fail to make them happy: a penthouse apartment, a fancy car, a diamond ring. Resist the massive pressure to dress, eat and shop like your peers, and live a modest lifestyle. Focus on work, as your play will come later. Some keys to not spending:

4. Buy or Rent a modest apartment/condo. You will be at work all the time, so do not splash out on housing. Clean and small will do just fine. Studies show that homeowners have 5x the net worth of rentors, so buy something well within your means as soon as it's financially feasable.

Don't eat fancy dinners. Unless you are a gourmet connoisseur, you have to admit that a $5 burrito tastes 90% as good as a fancy steak served on fine china.

Keep a budget. Track your expenses. Set goals for saving and celebrate when you meet them.

Invest wisely. It is beyond the scope of this how-to to explain exactly how to invest your money, but do the research and find a way to make your savings grow and work for you. The richest people invest in real estate and the stock market. Remember that the more you play it safe, the longer it'll probably take you to retire; on the flip side, the more you gamble, the more you risk losing your money and having to spend another year or more at your high-paying but miserable job.

5. Keep your eye on the mark. Not everyone is cut out for the kind of life you're going to have to lead in order to reach such an early retirement. There will be many times when you feel like giving in and throwing in the towel. Have a very clear vision and several ways to remind yourself why you're doing what you're doing, because you'll need them.

How to save money?

1. Set savings goals. For short-term goals, this is easy. If you want to buy a video game, find out how much it costs; if you want to buy a house, determine how much of a down payment you’ll need. For long-term goals, such as retirement, you’ll need to do a lot more planning (figuring out how much money you’ll need to live comfortably for 20 or 30 years after you stop working), and you’ll also need to figure out how investments will help you achieve your goals.

2. Kill your debt first. Simply calculating how much you spend each month on your debts will illustrate that eliminating debt is the fastest way to free up money. Once the money is freed from debt payment, it can easily be re-purposed to savings.

3. Establish a timeframe. For example: "I want to be able to buy a house two years from today." Set a particular date for accomplishing shorter-term goals, and make sure the goal is attainable within that time period. If it’s not attainable, you’ll just get discouraged.

4. Figure out how much you’ll have to save per week, per month, or per paycheck to attain each of your savings goals. Take each thing you want to save for and figure out how much you need to start saving now. For most savings goals, it’s best to save the same amount each period. For example, if you want to put a $20,000 down payment on a home in 36 months (three years), you’ll need to save about $550 per month every month. But if your paychecks amount to $1000, it might not be a realistic goal, so adjust your timeframe until you come up with an approachable amount.

5. Keep a record of your expenses. What you save falls between two activities and their difference: how much you make and how much you spend. Since you have more control over how much you spend, it's wise to take a critical look at your expenses. Write down everything you spend your money on for a couple weeks or a month. Be as detailed as possible, and try not to leave out small purchases. Assign each purchase or expenditure a category such as: Rent, Car insurance, Car payments, Phone Bill, Cable Bill, Utilities, Gas, Food, Entertainment, etc.

Keep a small notebook with you at all times. Get in the habit of recording every expense and saving the receipts.

Sit down once a week with your small notebook and receipts. Record your expenses in a larger notebook or a spreadsheet program.

6. Trim your expenses. Take a good, hard look at your spending records after a month or two have passed. You’ll probably be surprised when you look back at your record of expenses: $300 on ice cream, $100 on parking tickets? You’ll likely see some obvious cuts you can make. Depending on how much you need to save, however, you may need to make some difficult decisions. Think about your priorities, and make cuts you can live with. Calculate how much those cuts will save you per year, and you'll be much more motivated to pinch pennies.

Can you move to a less expensive apartment or house? Can you refinance your mortgage?

Can you consolidate your debts so that you're not paying as much interest?

Can you save money on gas, or give up a car altogether? If your family has multiple cars, can you bring it down to one?

Can you get a better price on insurance? Call around and make sure you are getting the best price you can. Consider taking a higher deductible, too.

Can you drop a land line and either only use your cell phone or save money by calling over the internet for free with services such as Skype?

Can you live without cable or satellite TV?

Can you cut down on your utility bills?

Can you restrict eating out? Buy food in bulk? Start using coupons? Cook more at home? You might be able to save a lot of money on food.

7. Reassess your savings goals. Subtract your expenses (the ones you can't live without) from your take-home income (i.e. after taxes have been taken out). What is the difference? And does it match up with your savings goals? Let's say you've decided you can definitely get by on $1500 per month, and your paychecks amount to $2300 per month. That leaves you with $800 to save. If there’s absolutely no way you can fit all your savings goals into your budget, take a look at what you’re saving for and cut the less important things or adjust the timeframe. Maybe you need to put off buying a new car for another year, or maybe you don’t really need a big-screen TV that badly.

8. Make a budget. Once you’ve managed to balance your earnings with your savings goals and spending, write down a budget so you’ll know each month or each paycheck how much you can spend on any given thing or category of things. This is especially important for expenses which tend to fluctuate, or which you know you're going to have a particularly hard time restricting. (E.g. "I will only spend $30 a month on movies/chocolate/coffee/etc.")

9. Stop using credit cards. Pay for everything with cash or money orders. Don't even use checks. It's easier to overspend when you're pulling from a bank or credit account because you don't know exactly how much is in there. If you have cash, you can see your supply running low. You can even bundle up the predetermined amount of cash allocated for each expense with a label or keep separate jars for each expense (e.g. a bundle/jar for coffee, another for gas, another for miscellaneous). As you pull money from a jar for that particular expense, you'll see how much remains and you'll also be reminded of your limit.

10. Open an interest-bearing savings account. It’s a lot easier to keep track of your savings if you have them separate from your spending money. You can also usually get better interest on savings accounts than on checking accounts (if you get interest on your checking account at all). Consider higher-interest options such as CDs or money-market accounts for longer savings goals.

Know where your money is. And how much of it, too. If you accidentally overdraw your bank account, you will incur hefty bank fees; worse yet, the place you paid with that check may slap a bounced check fee on top of that, and send the check in again, resulting in a second overdraft fee from the bank! So just a few cents missing to cover that check could result in over $100 in fees. To avoid that, you should always know how much money you've got in your account(s), so you never cut a check for more than what you have.

11. Look into checking and savings accounts that pay interest. Also, consider CDs (certificates of deposit) for longer-term savings with low risk.

12. Pay yourself first. Savings should be your priority, so don’t just say that you’ll save whatever’s left over at the end of the month. Deposit savings into an account (or your piggybank) as soon as you get paid. An easy, effective way to start saving is to simply deposit 10% of every check in a savings account. If you get a check or sum of cash, say 710.68, move the decimal point one place to the left and deposit that amount: 71.07. This works well and requires little thought; over several years, you've a tidy sum in savings. Over decades, you'll be a millionaire.

You can set up an automatic transfer from your checking account to your savings account.

Many employers allow you to deduct savings from your paycheck. The money is directly deposited in your savings account so you never even see it on your paycheck.

You can also have investments for retirement taken directly out of your pay, and the taxes may be deferred with this option.