Getting Rich in America

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Getting Rich in America

• 8 Rules to 1 Million

By D.R. Lee and R.B. McKenzie
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Whos the Richest?

• Bill Gates
• 75 B
• Worth 0.88 of GDP
• 54 B in 2011

• Rockefeller
• 900 M worth 15 B
• Worth 2.5 of GDP in his lifetime, or in todays
  dollars, 212 B.

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What would he have paid for .

• Son?
• Modern medical and dental care?
• Television?
• Central heating?
• Plumbing?
• Car?
• Airplane?

• King Henry VIII

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Whats Rich? U.S. versus EU
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GDP per capita in richest and poorest U.S. states
and selected EU countries (WSJ 6/18/04)
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U.S. versus EU

• Most EU countries have GDPs below the average
  U.S. GDP
• GDP per capita in U.S. is 32 higher than EU
  countries
• Average U.S. citizen can spend 9,700 more per
  year than average European
• Average size of newly built homes in the U.S. is
  2,300 square feet compared with 818 in the UK and
  1,216 in France. (http//news.bbc.co.uk/2/hi/82019
  00.stm)

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Comparing the U.S. with EU

• 25 of U.S. households are considered low
  income (below 25K)
• 40 of Swedish households would be low income
• U.S. poor
• 45.9 of own their own homes
• 72.8 have a car
• 77 have air conditioning (a luxury in EU)
• 1,200 square foot of living space (vs 1,000 sq.
  ft. for all income groups in Europe)

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Getting Rich in America

• Whats rich?
• 1 Million in todays dollars by retirement age
• You CAN do it!
• 8 rules

By D.R. Lee and R.B. McKenzie
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8 rules to getting rich

• 1 Think of America as a land of choices
• Optimistic attitudes
• If you want your prayers answered, get off your
  knees and hustle.

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2 Take seriously the power of compound interest

• Graduate at 22
• Take 30K job
• Save 10 of salary
• 250 per month
• Earn 8 return
• Retire age 65
• How much will you have?

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2 Take seriously the power of compound interest

• A 256K
• B 416K
• C 844K
• D 1.2 M
• E 2.4 M

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3 Resist temptation

• Candy test

• Increase retirement wealth
• buy used Camrys instead of new, 870K
• buy regular coffee and bring own lunch, 283K
• cook steak at home monthly instead of eating out,
  198K

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4 Get a good education

• Median household income
• High school 39K
• Assoc. degree 51K
• Bachelors 64K
• Masters 76K
• Professional 103K
• Graduate in 3 yrs v 5 yrs
• 39K salary for 2 extra years, interest on
  funds, saved tuition, lost summer wages
• in 44 years 1 million!

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5 Get married and stay married

• Married couples earn 45K vs all couples 39K
• Married couples have 2x the wealth as unmarrieds
• Live and work longer
• Divorce is costly

• Cooperation, specialization, economies of scale
• More time and productivity
• Most important business partnership

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6 Take care of yourself

• Live longer so get power of compounding
• Save 3K per year from 22 to
• 67 1.26 million
• 73 2.01 million
• Enjoy your wealth

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7 Take prudent risks

• Diversify
• Buy index funds
• Start your own business

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8 Strive for balance

• Live by principles
• Give back
• Live satisfying life

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You Can Do It!
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Questions?