Making Money From Nothing: Can YOU Do it?

Money for Nothing

Myths, Mystics, and Magicians conjure up visions of the supernatural.  The idea that something worth having can be created out of thin air, without blood, sweat, or tears is an idea that has enthralled kids and kids at heart for centuries.

The billion dollar success of the “Harry Potter” series with the emphasis on magic wands, flue dust, invisibility cloaks, and spells is just a recent reminder of our fascination with making something from nothing.

But Shakespeare, had his witches, as King Arthur had his Merlin.  The goose that laid the Golden Egg, and spinning hair into gold, also come quickly to mind.

The modern day equivalent can be found in those that want to turn a quick buck, without doing their due diligence.

This might include:

• Lottery tickets
• Single stock investing
• Texas Hold-em
• Flipping homes
• Resort real-estate

Brett Arends, in his column in the Wall Street Journal, recently wrote a story on the Ten Stock Market Myths That Just Won’t Die.

I will summarize a few of those  stock market myths here, with my commentary-(apologies to Mr Arends)

1. This is a good time to invest in the market-I am guilty of this one.  My thinking is, that when everyone is bearish is a good time to be bullish.  I do think this is true, but that doesn’t mean it will be true today!  It also may take a year for everyone to figure out the sky is not falling-so you have to have a strong stomach and deep pockets.
2. Stocks on average make you 10% a year- this may have beentrue over the past 100+ years-but we have had zero growth over the last decade.  Does that mean we are going to double in the next couple of years- I wouldn’t hold my breath.  I think those who base their retirement earnings on that number, may be disappointed if they are going to retire in the next 20 years.
3. Our economists are forecasting…….-Economists opinions, are equal to weather people in my mind.  They may be able to predict the next 24 hours-beyond that is a guess.
4. This is a stock pickers market- I hear this one every day,  on the business channel, while I eat my homemade p.b.&J gourmet lunch.  Studies show the average mutual fund under performs the market-so where is that damn stock picker when you need him.

For the rest of the list-check out Brett’s article-it’s good for a laugh-before you cry.

So what are we to do, if we want to increase our wealth, and don’t want to play the lottery with our savings.

Dr Dean’s wealth building  secrets:

(I am not going to make you slash your palm, and mix your blood with mine-like Clint on “Outlaw Josey Wales”…..)   But let’s just keep these between me and you.   shhhhh….

• Start early-compound interest is your friend.
• Live well below your means and save like hell!
• Work your ass off! Now this doesn’t mean slaving away for 50 years in a minimum wage job.  It means working strategically, to increase your value in this economy.  That may mean additional schooling, OJT, multiple streams of income.  Most millionaires made their money consistently working, adding value-for their company, their employer’s company, or themselves, not by someone giving it to them.
• Use your time wisely- I am writing this during a time when a patient canceled her appointment.  Make sure you have things to do during your down-time that are constructive.  Turn off the television, phone, and other distractions.
• Diversify-and this doesn’t mean invest in 5 different categories of stocks-as Cramer does during a segment on Mad Money!.  It means investing in 5 or more categories-stocks, bonds, commodities ( Precious metals, energy, grains, industrial metals like copper), real-estate, and yourself.  You don’t have to do this all at once-gradually spread out your resources as you build them.

I promise there is not an original thought in the list above. (You are saying no-duhh as my kids were fond of muttering!) The secrets to success are not secrets at all.  They cannot be conjured up with a Magic Wand, even a special one found at Diagon Alley!

Secrets to Success

Like most things in life, the secrets to success should be called the “obvious path to success”.  The difference between those who succeed and those who don’t is frequently the difference between those who make the hard choices and sacrifices.

Now I don’t judge success by bank accounts, and monetary success.   Balancing your life between your family, friends, job, and spirituality-can make you rich in many ways-but if you want money for retirement, or to allow freedom of choice-then develop a plan and go make it work.

Reader Questions:

Do you know any magic ways to make money?  And will you share them?

Tags: building wealth, myths on the stock market, quick money myths, saving money

This entry was posted on Friday, July 30th, 2010 at 3:37 pm and is filed under Retirement savings, Wealth building, goal setting. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.