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How can I become ultra rich?(17 posts)

How can I become ultra rich?mr_spin
Apr 30, 2002 3:59 PM
I have a bizarre desire to pay high taxes. Therefore, I must become ultra rich. I am thinking somewhere in the $200 million range would do quite nicely.

All ideas welcome.
re: How can I become ultra rich?zk3
Apr 30, 2002 4:37 PM
duh...it's called super lotto :-)

or I bet e-porn makes a bunch of money too....
re: How can I become ultra rich?MrCrud
Apr 30, 2002 6:22 PM
....yeah, e-porn makes obscene amounts of money....

Cheers!

Mr.Crud
DotCom stock optionsmickey-mac
Apr 30, 2002 6:43 PM
Oh, never mind.
re: How can I become ultra rich?Duane Gran
Apr 30, 2002 7:29 PM
I doubt if many people have become ultra rich without some serious family momentum (having a rich uncle helps), but becoming wealthy is pretty attainable. From what I've read, there are two fundamental steps:

1) Live below your means. Swallow the pride and drive a lesser car and live in a smaller house. Take whatever you earn and assume that you really earn 75% of this. Use the remainder to build assets.

2) Acquire assets instead of liabilities. Most people don't quite get it in this regard. They think their car and house are an assett, but in the sense of becoming wealthy they cost you money. The real test of an assett is weather it generates wealth. Common examples are stocks, real estate and intellectual property.

This doesn't guarantee success, but the odds are better than with a lotter of a dot-com stock. ;)
re: How can I become ultra rich?TJeanloz
May 1, 2002 4:28 AM
Contrary to popular belief, the "Ultra" rich didn't inherit their wealth for the most part. Of the top 25 richest Americans, only the Waltons (Wal-Mart) and Mars (M&M Mars), did not earn their money 'themselves'. And the richest, Gates, Buffet, Ellison, and Allen, all made their own wealth.

I think proportionally, the "middle rich" have the largest segment of inhereted income. The simple fact is that inheritance is very dilutive. Two kids splits a fortune in half. Three splits it further.
Also,TJeanloz
May 1, 2002 4:44 AM
In terms of assets and liabilities, I heard that one first from the guy pitching the Rich Dad/Poor Dad book (whose get rich scheme was to badly write and promote a bestseller- it worked for him). It simply isn't really true. A house that you own is an asset. A mortgage on that house is a liability. The house itself, and the equity in that house, is all asset. And quite valuable too. The beauty of home equity is that it is a very safe asset that you can mortgage at a VERY low rate. How else can you borrow $250,000 at 7%? Put that $250K into a higher yielding (but riskier) investment at, say 12%, and you're clearing $12,500 a year on this "liability." I'd like to have more liabilities like that. The trick is, of course, that you need to make more than 7% on your money- which isn't necessarily easy. And there is quite a bit of risk involved. So a house is simply an investment in real estate, and should be looked at as such- the mortgage is the liability, and needs to be serviced as such.

So to answer the original question of how to get really rich:

We can draw from others' experiences on this. First, we can assume that you won't inherit it. You can get rich with a combination of exceptionally hard work and exceptionally good luck. Nobody got rich on the golf course- that comes later. Careful saving can easily get most people to a ~$5,000,000 nest egg; but most people are unwilling to take the sacrifices necessary to achieve this. Beyond that threshold, nothing but hard work and luck will get you there.
Don't forget risk taking.Len J
May 1, 2002 5:25 AM
I agree that hard work, luck and saving are all components of getting rich but at some point almost every "rich" person I know (ignoring inheritance) reached a point through hard work & luck where they had to take a large risk, obviously these risks paid off but they were willing to risk the whole thing on an idea.

No risk, no reward.

Len
You forgot to mention that you can deduct mortgage interest (nm)ColnagoFE
May 1, 2002 8:12 AM
A word about mortgage interestDuane Gran
May 1, 2002 1:43 PM
Many people think mortgage interest is a good thing, and they even look at it from an investment standpoint. From what I can tell, it is simply an incentive from the government to purchase instead of rent, which in turn is a way of promoting the banking and construction industries.

As far as the investment goes, you get something like 30 cents on every dollar you pay in interest. I'll tell you what, I'll do you even better. Give me your dollar and I'll give you back 50 cents. Deal?

Mortgage interest isn't all that it is cracked up to be, and on the scale of investments and incentives it isn't as big of a factor as people make it out to be.
A word about mortgage interestDougSloan
May 1, 2002 1:55 PM
If you are paying 7% on a mortage, the real cost to you is about 2/3's of that after the deduction, right? So a 7% mortgage is really about 4.6%.

If your salary goes up yearly at about that rate (some do, some don't), then you are coming out ahead, even more so if your house is also appreciating.

Property taxes can be expensive, but then they are also deductible, and usually the bulk of them pay for local schools.

Maintenance can be expensive, too, but then those costs reduce the basis in your house, so that when you sell it there is less of a profit to realize (not important, though, if there is no capital gain tax).

Over all, it's still better to have your house paid for, rather than be paying a mortgage -- unless, you can borrow at an effective rate of 4.6% and invest and make more than that.
"plastics, my boy, plastics"DougSloan
May 1, 2002 5:42 AM
Well, that was the advice to "the graduate" in 1966(?)

First, you gotta have some kind of talent -- writing, singing, acting, jumping, creating -- something.

Second, either that talent needs to be desired by a whole lot of people, or by a few people a whole lot. A singer's talent appeals to a whole lot of people, and they make a little bit on each sale. A CEO's talent appeals a whole lot to a very few people (boards of directors).

Here's the paradox - if you have to ask you probably don't got it. It seems that wealth, for the most part, is not created by the desire for wealth -- it is a result of doing what you love to do really well, and having the good fortune to have people want to pay you for it.
Marry into it! ;-0 nmBrooks
May 1, 2002 7:17 AM
One thing is for certain...DougSloan
May 1, 2002 12:04 PM
...and we all can likely agree on this -- spending lots of money on bikes, all your spare time riding, and wasting time on this website is NOT the way to get wealthy, at least financially.

Doug
Agreed. And thanks for that brisk slap of reality...>;(128
May 1, 2002 12:28 PM
Unless we measure wealth by the quality of life spent riding and talking to digital strangers?
Nah! I'll take the cash Montey!
you can say that again (nm)ColnagoFE
May 1, 2002 2:22 PM
You can start a charity ride!!Rusty McNasty
May 6, 2002 5:32 AM
Hey, it worked for Dan Palotta! Of course, you would become a fraud, but if you really want the money............