Do you dream about being wealthy? It would be nice to be literally rolling in the dough. Find out what the average person’s likelihood to get rich is and what you can do to achieve enough to retire on.
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Here’s a statistic for you: According to the U.S. Census Bureau, about 57% of adults play the lottery in a given year. That suggests there are a whole lot of people out there who are angling to be rich – or at least richer.
It makes me wonder: How many of us are actually willing to do the real work that’s most often involved in raking in the big bucks? And if we aren’t willing to get our hands dirty, are we really interested in being rich at all? (See also: ”5 money lessons from millionaires.”)
What it takes to be rich
Take a look at the Forbes list of the richest people in America, and it becomes very clear that there are really only a few key ways to become filthy, stinking rich (because, let’s face it, moderation just doesn’t factor into our dreams):
- Found a successful company.
Unless you’re the heir to a major fortune, you can scratch the first one off your list. Now you’re left with two solid options. And by solid, I mean possible, not easy.
Building a business is a huge commitment of time, effort, money and risk. In the end, a lot of startups fail despite the heroic efforts of their founders. But when your own business pays off, you get to enjoy a lot more of the spoils than if you were simply an employee.
Investing your way to wealth may be even more difficult. Even with high returns, you’ll need a fairly large amount of money to work with. That means you have to either earn more or save more. Plus, scoring a huge win (often called a “tenbagger“) in investing is very rare and tends to be a once-in-a-lifetime deal, even for many of the best investors out there.
A practical option
I don’t mean to burst your bubble but, all in all, the odds of being very rich aren’t very good, at least not in the near future. So do you have any chance of being richer? The answer is yes – if you can muster a little patience.
Let’s go back to the people who play the lottery. According to the North American Association of State and Provincial Lotteries, about 20% of players spend more than $1,300 per year on lottery tickets. That’s a lot of money, especially when you consider that those regular players tend to be on the lower end of the income spectrum.
Now, I can totally understand the lure of dreaming about winning the jackpot, but based on the odds, I think I can safely say that it won’t happen to you. What I can say with all certainty is that if you were to invest that $1,300 per year at a modest 5% rate, you’d have $70,000 at the end of 25 years. Kick in a little extra here and there, and you’ll have yourself a respectable retirement account. OK, so maybe you won’t be rolling in a giant pile of cash, but having some money to spare during retirement doesn’t sound all that bad, now does it?
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