In today's economy in the US, can people go from...?

Question

being lower-middle class and possibly having no knowledge of investing, to being upper-middle class & having a strong investing portfolio?

If so, how?

Answer 1

NO WAY. The government has guaranteed that the rich will keep getting richer and the middle class/poor will continue to lose ground. It's government by the highest bidder!

Answer 2

Certainly. It happens regularly. One economist, Thomas Sowell, points out in his book "Basic Economics" that income statistics are often misunderstood. People often assume that there's little movement between the income levels.

However, quite the contrary is true. A majority of those on the low end wind up in a higher bracket at some point over the next 20 years and a large percentage of the low end find themselves at the high end. How could this be?

It's easy. As we age, we more likely to acquire valuable skills and knowledge and are exposed to more opportunities over the years.

One of those skills is money management and investing. As you are developing your career you should also be developing your investment philosophy. You can do this by educating yourself with investment and personal finace books and magazines and resources from mutual fund companies.

You don't have to become a stock trading savant to accumulate assets and invest those assets to provide a good and comfortable retirement. A good discipline of investing a percentage of your income along with some good stable investing will grow you an investment portfolio over a couple of decades.

It's kind of like planting a tree. For the first few years you look at it all the time and try to figure out if it's growing or not. Then you kind of forget about it and then 15 or 20 years down the road you look at it again and realize it's huge.

Good luck. Some resources I found helpful were Kiplinger's Personal Finance, Money magazine and David Bach's automatic millionaire. There are many more, but these are good starts.

Answer 3

Very easily. But you need to start with seed capital, and I guess there's the difficulty.

The easiest way to do it from the investing standpoint is to find a decent mutual fund and plunk money into it. Many credit unions have investment advisers that offer their services free or at very low cost, and you can become a member of the credit union by opening an account for as little as a $25 deposit (note that this is always your money; your membership will last so long as you hold money on deposit, and this account is interest-bearing).

This will take a lot of time.

Now, if you want to do it more quickly, I suggest reading cover-to-cover a Motley Fool investment guide and WSJ investment guide (you can find these both at your library), pick an industry, learn all you can about it, find out what analysts are saying. Use a free service like Yahoo!Finance to track stories. When you've found a couple of prospective stocks, open an investment account with a discount broker. Look for one that offers no fees for account maintenance, inactivity or closure, and whose transactions fees are reasonable. Don't be penny-wise,dollar-foolish here - if you save $1 on a trade but pay $2 monthly maintenance, you're missing out. The point is not to day-trade, but to buy and hold strong stocks from good companies that are undervalued right now and likely to grow.

It's best to buy these stocks in batches of 100. This is the standard unit of trade, makes it easier to match your buy order to someone's sell order, and also minimizes commissions (you need to figure in the cost of the commission when looking at whether you're making anything). And it's okay to start out with penny stocks (you'll often find these on the Pink Sheets, with the .PK designation), although there is more information on the NYSE, NASDAQ and AMEX stocks.

Avoid trading contracts, options, futures or currencies - there is far too much volatility on these markets. Yes, people have made money, but the commercials for companies that sell models for these financial instruments never show the guy who lost his life savings on one bad trade.

Finally, don't invest more than you can afford to lose. If you have to start out with $190 in stock valued at $0.95 a share but your analysis shows you'll be making money, do it.

Answer 4

Sure you can! Many people become millionaires in the U.S. every year.

It takes time to go from zero to a million, but you can compound your wealth very quickly when starting small. The biggest challenge is lack of faith that such growth is possible, and lack of knowledge.

It's important to both have a high income, and spend way less than your income to have savings, and then invest it wisely. If you have less than $10,000 to invest, you are better off getting a second job. Once you have $10k to invest, your "second job" ought to be to learn all you can on how to invest, by reading books, and reading online. Growth of 100% per year is not unrealistic for such a small amount. At that rate, you can have a million within 7 years. $10k, 20k, 40k, 80k, 160k, 320k, 640k, 1024k! bingo. Many compound faster than that through precious metal stocks these days.

Answer 5

Learn from the Government ... take money from your pay-check before you get the money. Ask your employer to take money out for your 401(k). You should always at least match what you're company will pay you.

Then have your employer pay a bank account/ mutual fund/ brokerage account about 2% of your paycheck. If you can't have your employer do it, then your bank should be able to do a "ACH" transfer to your "Savings" account . When you get pay raises, don't forget to increase your savings. Look at what you want to save towards (more retirement money, or safety money)

It doesn't seem like much ... it can be as small as $10.00 per paycheck ... but whoa ... when you're not looking you'll have $$$$.

Your original goal should be to save 10 months of expenses (rent, insurance, food) in cash at the bank ... then take 5 months of your expenses and open a mutual fund/ brokerage account. Then keep investing into the mutual fund/brokerage account each pay-check.

This is how wealth is formed ... slow steady and consistent.

Answer 6

Absolutely. You have to be willing to work hard to have money to invest and you have to be willing to read and learn how to invest.

I would recommend the Authors; Robert Kiyoski & Suze Orman, and anything written about Warren Buffet to start. From there you should be exposed to a wide range of ideas so that you can know what investments interest you.

Answer 7

Anything is possible. It's call the USA. Learn about investing, do it, believe, perceive, achieve, its America baby. My good friend made 5 million is 3 years in Las Vegas real estate. Do what you like it all there for the taking.

Answer 8

Sure, don’t be a pawn for the corporate marketing campaign. Do you really need a $500 pair of shoes? Save your damn money, you know that credit card don’t use it. Stop reading entertainment weekly. You’re not a rock star so stop living like one. Cook your own food; you don’t need to drive a BMW. You know you already knew the answer to this question, however in America we cant help but live far be on are means.

Answer 9

Yes. Save $50 a week in unnecessary expenditures and buy _physical_ gold & silver each week. In 3 years, you will be a $millionaire:

http://SilverStockReport.com

Answer 10

Yes, there is always mobility.
http://www.kauffman.org
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