Become a millionaire. It’s easier than you think

bratwurst

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Speaking as someone who has started and failed at two businesses already, what you're proposing is also based on hope.

Most businesses fail. Human beings are stupidly optimistic, otherwise we wouldn't even bother.

IMHO, you're much more likely to get the "freedom" that @RedViking talks about by saving and investing but also by simplifying.

I'm done with the stress of running a business for now. Maybe one day I'll try again but I much prefer having a normal job.
I'm curious. The business you started, were those businesses you had gained experience before hand? As in worked for another company doing the same?

What I've noticed that most people would delve into a business they have no clue about. That's mostly a guarantee you'll struggle.

It's far easier to create a business from something you are good at already. Don't look too deep, just look down at your feet. You are already standing on a business opportunity.
 

Daruk

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Not necessary. But they require time. Time is more valuable than money. But if ones view is to make as much money to retire, you will need time. Less time with the things that matter.

Obviously I am taking in mind that there should be a balance and wisdom in how you manage and spend finances. But time invested in family and the things that matter comes before money to retire 'wealthy'.
Totally agree that time is more valuable than money.
 

Daruk

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I'm curious. The business you started, were those businesses you had gained experience before hand? As in worked for another company doing the same?

What I've noticed that most people would delve into a business they have no clue about. That's mostly a guarantee you'll struggle.

It's far easier to create a business from something you are good at already. Don't look too deep, just look down at your feet. You are already standing on a business opportunity.
I've been in the IT sector since the early 90s. I'm just enjoying myself more and have more time now than I did running my business. The biggest issue was dealing with SARS and customers who were slow to pay but quick to cry for help. It gets tiresome. The bigger clients would pay 120 days. I also got sick and tired of the Bidvests who would take over long term clients and tell you they can't deal with you, they have to use companies in the bidcest stable etc. Painful. Good experience and I'd suggest everyone give it a go to put things in perspective... But it'd be an uphill battle to run a business that turned a profit to match my current salary and live where I want to. Right now I can live at the beach house, buy a caravan and live on the road, live in another country... But as for investing, you still have to make decisions on what to do with your hard earned $$

Let me ask you a question. How many kids do you have?
 
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Moto Guzzi

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Apr 24, 2004
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A lot we talk, teach, and believe will happen, is going around in our heads, as soon as an idea is converted to a suggestion, then a trend for mass acceptance, your brain/mind is ready by default to absorb it, and leave you with a picture of hope to cling to. That picture may turn out to be vastly different than you imagined eventually, due to practicalities.

-Success as an individual...Its going to cost you.
-Success as a small bussiness....Its going to cost you.
-Success as a medium bussiness.....Its going to cost you
-Success at retirement.....Its going to cost you deerly.

at another level/scale.......That has a downstream dependance.

-Success at large bussinesses......Well here you supply basic equipment services for goverment, private firms smaller than you, etc, stuff they must have to even begin. If successfull, money will flow to you, whether downstreem bussinesses fail or not, weather they buy cash or creadit, liquidated or not.....You now operate in another league of safeness, till crashed out by another big one in power struggle events. Large entities, or Government operations, may turn out to only be Agents operating your backbone manufactured equipment, so even if they not privatised, their backbone equipment not manufactured by themselves is indeed private origin, now thats important to realise, these are usually long term stuff. Cost at this level is very important. Example very basic: A small part like a bulb is charged at say R100.00 on catalogue to agent, but if I go as individual, I can buy that same bulb for R10.00 if that same company sell it to private individuals or very small bussinesses.....I assume the price difference has to do with support for up to 20 years.

Now what you need to understand is if these background manufacturers and large agents starts load and choke up monetary systems as we have seen worldwide last 30 years, it becomes verydifficult for individual, small, medium bussinesses to keep them selves from drowning in such a playing field where money is the main control system and represents the flow of resources.

So if Water, Electricity, & now Digital embeddedments are not CHEAP, no politital ideology will play out well in the loger term, it will just choke up everything in upwards spiralling ways and the end result is extreme taxes, poor deliveries and implotions of monetary systems, it will just swollow all the more money you throw at it and in return ask for more in shorter bursts. Forget about inflation, start understanding channelling to centralised points.

Success Measurement=When do you have a party swimming in your perceived success-?
1-Immediately....Positive, over positiveness, false positiveness freeks.
2-Short term.....
3-Medium term.....Realists were born...
4-Long term, at least the time of your life till your childrens childrens life....Realism has won to the benifit of most.

As recent history has teaches us(If we care to learn), you can be ultra rich and considered successfull, while the downstream partners drown in failures not by their own fault alone. So for a future without wars, terrorism, and continious unrest, its important to know how to work with money(flow of resources), other that ever in the past at population of 7 Billion and growing complex minds, now I am not even sure if the One World Drivers understand this as it should be understood.
 

newby_investor

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I'm curious. The business you started, were those businesses you had gained experience before hand? As in worked for another company doing the same?

What I've noticed that most people would delve into a business they have no clue about. That's mostly a guarantee you'll struggle.

It's far easier to create a business from something you are good at already. Don't look too deep, just look down at your feet. You are already standing on a business opportunity.
Marketing and sales were my problems. I could do the work, still can and I have most of my tools and equipment still, I'm just a rubbish businessman. If I were to try again I wouldn't go it myself, but finding a trustworthy business partner who has strengths where I have weaknesses is not easy.
 

Daruk

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Marketing and sales were my problems. I could do the work, still can and I have most of my tools and equipment still, I'm just a rubbish businessman. If I were to try again I wouldn't go it myself, but finding a trustworthy business partner who has strengths where I have weaknesses is not easy.
Agree, having a partner is essential if you want to be able to take time off. Very hard to get a break without having trustworthy partners or staff.
 

RedViking

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As a Freelancer my income has always been very low or very high. Never a balance. So I got used to living a low income lifestyle. When there is a high income I buy stuff cash. Car cash. Medical savings cash. Holiday. I have to go away at least once a term. It helps me breath.

I have always wanted my own business drawing most of the proffit or rewards. I am the boss. Work directly with clients, not through some third party. but there are some areas I lack. I have recently found a business partner that fills those gaps. My hope is within in the next 3-6 months to be full time into the business. Live the same lifestyle, enjoy more time in the mountains, invest and safe the rest. Will pay myself a monthly salary, the rest gets invested in the business and personal investments. Do as little work as possible (not to be confused for sitting back and things will just happen. There is no such thing) ,get a good team and get others to do the work. If something goes wrong or I get screwed over, I have gained a ton of relationships, skills and other valuable experience. My lifestyle can still be maintained. No debt.
 

bratwurst

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Oct 15, 2008
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I've been in the IT sector since the early 90s. I'm just enjoying myself more and have more time now than I did running my business. The biggest issue was dealing with SARS and customers who were slow to pay but quick to cry for help. It gets tiresome. The bigger clients would pay 120 days. I also got sick and tired of the Bidvests who would take over long term clients and tell you they can't deal with you, they have to use companies in the bidcest stable etc. Painful. Good experience and I'd suggest everyone give it a go to put things in perspective... But it'd be an uphill battle to run a business that turned a profit to match my current salary and live where I want to. Right now I can live at the beach house, buy a caravan and live on the road, live in another country... But as for investing, you still have to make decisions on what to do with your hard earned $$

Let me ask you a question. How many kids do you have?
Well it sounds like you have a plan and are following it. Well done.

Having the ability to work remotely from anywhere in the world is a dream.

2 kids. Both under 3
 

bratwurst

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Oct 15, 2008
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Marketing and sales were my problems. I could do the work, still can and I have most of my tools and equipment still, I'm just a rubbish businessman. If I were to try again I wouldn't go it myself, but finding a trustworthy business partner who has strengths where I have weaknesses is not easy.
You could outsource the marketing. Then again, it sounds like you work with your hands. I do believe building a craftsmanship business to be far more challenging compared to say an online business.
 

Daruk

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Well it sounds like you have a plan and are following it. Well done.

Having the ability to work remotely from anywhere in the world is a dream.

2 kids. Both under 3
The family set up definitely dictates to some degree. I've had kids from day dot. My two youngest are now at varsity - 5th and 4th year. We've been lucky to have a couple of bursaries but have probably forked out R500k+ for their post school studies. The steady income is really helpful.
I can afford to take more risks when they are done with Uni and feeding themselves.
 

Daruk

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As a Freelancer my income has always been very low or very high. Never a balance. So I got used to living a low income lifestyle. When there is a high income I buy stuff cash. Car cash. Medical savings cash. Holiday. I have to go away at least once a term. It helps me breath.

I have always wanted my own business drawing most of the proffit or rewards. I am the boss. Work directly with clients, not through some third party. but there are some areas I lack. I have recently found a business partner that fills those gaps. My hope is within in the next 3-6 months to be full time into the business. Live the same lifestyle, enjoy more time in the mountains, invest and safe the rest. Will pay myself a monthly salary, the rest gets invested in the business and personal investments. Do as little work as possible (not to be confused for sitting back and things will just happen. There is no such thing) ,get a good team and get others to do the work. If something goes wrong or I get screwed over, I have gained a ton of relationships, skills and other valuable experience. My lifestyle can still be maintained. No debt.
Invest and save. It's definitely not brainwashing. Nice that you have no debt. We're paying off a home loan still but no vehicle debt. I've never owned a "nice" car. It doesn't tick any boxes for me.
 

koffiejunkie

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Aug 23, 2004
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The purpose of my post: Yes, this is yet *another* of 100 "demonstrations of compounding" interest that have been shown on this forum and others. It is presented as a magical way to make money (you said "throwing money at you"), when in reality, the vast majority of these demonstrations disingenuously use unlikely high annual returns, ignore inflation and the fact that inflation also compounds, ignores taxation, and in the case when there are actual high annual returns, ignores the fact that this is a product of both currency risk and inflation.
You are completely missing the point of both my post and the OP. It's not about getting the best possible returns. It's about convincing non-savers that it's worth saving. Overcomplicating things with inflation and tax calculations is not going to help. Besides, even at 10% pa, it will take 3-4 years to exceed the tax-free alloance on interest (R23k odd) - enough time for someone to get a feel for the growth and realise it's worth it, even with modest savings every month.

And speaking of which, I've moddelled those factors, with the SA figures. You still come out ahead of inflation and most definitely ahead of not saving at all. And as I said, I wouldn't recommend someone puts all their money in a savings account.

I'd hazard a guess that those who don't, inevitably spiral downwards into a financial void constructed from their own numeric inadequacy.
Financial void? C'mon.

Someone above posted a calculation if you were to save 4000 for 374 months you'd mint a million from it yearly. That's after 30 years. Wow.

Start your own business. Start another. Hustle for a few years and you could net far more. You control your wealth.
That someone was me (that was only to make a point). I agree with you, actually. SA needs more entrepeneurs and more small businesses in particular. Just make sure you also mention how much hard work it is and how likely it is to fail.

By all means, diversify. Don't keep all your eggs in one basket. Telling young people to just save and invest to supposedly be "rich" when they are in a wheelchair is just pure hogwash.
Didn't say anything about getting rich. It's about getting your money to work for you. That's all.

Tax-free interest exemption in SA maxes out somewhere around R25k p.a.?
R33k per year up to R500k total.

Then the taxation on interest works out extremely high as not much in the way of offsets.
The big problem with tax on interest is that it's ongoing. So it leeches away your returns like fund fees do. So while it's nice to get decent interest on money that you want to keep in cash for whatever reason, it's best to keep that at an amount that will be under the tax-free threshold and put the rest in something that accrues value and only gets taxed once you realise the gains (e.g. a decent equity fund like Ashburton 1200 ETF).

But offshore in a high interest low tax economy it looks better. In which case USD, Euro and GBP are out in terms of earning decent interest.
Which low-tax economies have high interest rates? I don't know of any? Where I am taxes are low (15% max on income), but my savings account gives 0.125% pa.

Note that as of the next tax year, your overseas income over R1m will be taxed in SA at 45 if you are resident for tax purposes (i.e. if you live in SA)
 

RedViking

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Invest and save. It's definitely not brainwashing. Nice that you have no debt. We're paying off a home loan still but no vehicle debt. I've never owned a "nice" car. It doesn't tick any boxes for me.
Yeah, I'm staying aways from home loans. Don't know where I'll be in the next 10 years, but I am pretty sure it won't be in the same place.
 

Mike Hoxbig

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2) Stay out of dept. These days I'm not even convinced a mortgage is justified.
Depends on how long you plan on keeping the place.

In my view if it's a place you're going to live in until you retire, the mortgage is absolutely justified.

The repayments are mostly fixed and only change with the prime rate, while your salary keeps increasing. After a few years you don't really feel the bond payments.

Rent on the other hand usually increases annually, at times even higher than inflation...
 

Scooby_Doo

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Tax-free interest exemption in SA maxes out somewhere around R25k p.a.?
Interest from a South African source earned by any natural person under 65 years of age, up to R23 800 per annum, and persons 65 and older, up to R34 500 per annum, is exempt.

Unless it is in a tax free account. Then there would be no limit.

/snip

R33k per year up to R500k total.

/Snip
See quote above.
 

koffiejunkie

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Interest from a South African source earned by any natural person under 65 years of age, up to R23 800 per annum, and persons 65 and older, up to R34 500 per annum, is exempt.

Unless it is in a tax free account. Then there would be no limit.



See quote above.
Sorry I misread his question as pertaining to the tax-free account.
 

Milano

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Unless it is in a tax free account. Then there would be no limit.

What you get
  • Save up to R33 000 per tax year and the interest earned will be tax free
  • The annual limit of R33 000 applies to the total amount of all your tax free investment accounts
  • If you contribute more than the annual limit, SARS will levy a penalty of 40% on the amount that's over the limit
 

Scooby_Doo

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Sorry I misread his question as pertaining to the tax-free account.

What you get
  • Save up to R33 000 per tax year and the interest earned will be tax free
  • The annual limit of R33 000 applies to the total amount of all your tax free investment accounts
  • If you contribute more than the annual limit, SARS will levy a penalty of 40% on the amount that's over the limit
Yes.
 

cguy

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Jan 2, 2013
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I think the point of it is that 40% on R500 means nothing over saving more and and getting 20% on R1000 instead.
If his point is that if you choose to keep more then you get to keep more, then sure. I would kinda think that would be a given though.

There is no fundamental difference between saving and investing. These are just forms of keeping your wealth that have varying risk and reward trade-offs.
 
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