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.

9 easy steps to get rich and survive this hard times

It seems that everyone wants to get rich. There are books out on that subject, classes that are headed by someone who can show you an easy way to get rich, rich people willing to drop advice on how to get rich, and many other schemes that guarantee you will get rich fast. Getting rich is one of the main goals of most people, and while it is never easy, there are some sensible techniques that will increase your chances of getting rich.

1. Define "rich". It's one of those subjective words that everyone uses but no one defines. What are your standards for being rich? In other words, what do you envision when you think about being rich? This can be different for everyone. Usually it whittles down to a few common goals:

2. Prestige. For many people, the idea of getting rich is tied to getting respect. It's not so much about how much money you have, but about maintaining a luxurious standard of living--exotic vacations, nice cars, swimming pools, etc.

Retirement. Some people want to get rich so that they never have to work another day in their lives. In this case, the standard of life one wishes to maintain once retired is critical to understanding how much money is needed to get rich.

Keep your eyes and ears open. All the time interesting people and chances appear and disappear. Get a feeling when to step forward and when to wait.

Delay gratification. If you're looking for information on how to get rich, then you're probably not rich right now, and there's a reason for that. Are you spending money on things that won't get you rich? Are you sticking with a job that doesn't make that much money to begin with? In order to get rich, you're going to have to give up some of the things you enjoy doing now, so that you can enjoy those things without restriction later. For example, you might like having free time, so you give yourself a few hours a day to do nothing. But if you were to invest those few hours into getting rich, you could work towards having 20 years of free time (24 hours a day!) with early retirement. What can you give up now in exchange for being rich later?

3. Cut expenses

4. Get a job that pays more or get a promotion

5. Downgrade or give up your car

6. Downgrade your apartment or house

7. Reallocate your spare time

8. Save money. You've heard the phrase "It takes money to make money." So start socking away the extra money you're making now that you've delayed gratification as outlined previously. After all, what's the point in giving up the stuff you like if you have a hole in your pocket? Start building a "get rich fund" at the bank. Always pay yourself first. This means before you go and blow your pay check on a new pair of shoes or a golf club you don't need, put money aside in to an account that you don't touch. Do this every time you get paid and watch your account grow.

Invest. Once you've stockpiled your savings, start thinking of ways to invest it. This is where your definition of "rich" really comes in handy. If you're looking for prestige, for example, a good investment would be education. Save up enough money to attend an Ivy League school and obtain a degree in something that will make decent money but, more importantly, earn great respect (doctor, lawyer, dentist, any kind of professional). If your goal is to retire early, on the other hand, invest that money in stocks, bonds, or other vehicles of investment that will give you an annual return on investment (ROI) that's enough to maintain you in your retirement. For instance, if you have one million dollars invested and you get a reliable 7% ROI, that's $70,000 per year! Invest in relatively stable assets - rental properties or potential development land in steadily growing areas is a good example. Put your money not in luxuries that will be worth nothing in a couple of years (a fancy car, for example), but in things that will increase in value over time, and that will earn you supplementary income in the interim.

9. Stay rich. It's hard to get rich, but it's even harder to stay rich. Your wealth is always going to be affected by the market, and the market has its ups and downs. If you get too comfortable when times are good, you'll quickly drop back to square one when the market hits a slump. If you get a promotion or a raise, or if your ROI goes up a percentage point, don't spend the extra--save it for when business is slow and your ROI goes down two percentage points.

Network with the Rich It's always an excellent idea to surround yourself with other rich people; whether you have already become very rich or whether you are just starting out and clueless. Understand how the rich think and the way they manage their money. Fly first class or business class once in a while, spend a weekend at a luxury golf course; if you can't afford to do too much traveling and spending, then use the internet instead.