
Ask HN: For you who are rich (net worth $1 million+), where to start? - b2hack
If you have to start from the beginning, what will be your bet today for a startup.<p>Which service/product ?
======
hippee-lee
Start with your employers 401k plan. If they match your contributions all the
better. If they don't offer one do it yourself with a ROTH IRA and max that
out each year if you can. Start now.

When I first started I looked for high yield / high risk mutual funds that the
company offered and participated heavily in the ESPP plan of the company. I
picked similar things for my ROTH contributions. This means that I was
impacted by the stock market collapse in 2008. It also means that I recovered
my losses and was back where I was pre collapse in ~ nine months because we
didn't panic and are in it for the long term. I'm 36 and will likely start
transitioning some of the investments into 'safer' things when I am around 45
or so. The accounts are checked 2x per year and adjustments are sometimes made
but usually we just run the calculator that estimates how much we will have
when we are ~55.

The company I started this with offered seminars for retirement investing and
there is a chart, sort of a guideline, that details how much risk your
investment portfolio should have in it based on how long you have to
retirement. If anyones interested I'll see if I can dig it up.

Not that I plan on retiring, even when I am retired but if I was 70 and my
portfolio took the hit it did in 2008 I might not have the time to wait for
the markets to correct. Note: I know very little about finance, investing or
otherwise. My wife is the financial guru in the family and I have learned much
from watching her lead. Please take this as what worked for me and realize
that ymmv. Also, it helps to read up on the basics of investing for retirement
but i'll be honest when I say that it has been several years since I read
anything.

[edit] - I might have misread the question. Sorry. This is what I did when I
was starting at 24 and would do again if I was just starting out. I doubt that
I would pay someone else to do it for me since the fees that are charged when
one sells/buys end up taking a significant chunk and any service is going to
ad their fees on top of those.

~~~
b2hack
I think you view is very good, in any case my question was more about
businesses not investments. I respect your point of view and understand that
way of thinking.

I was curious to see what kind of advices a *llionaire could give.

~~~
hippee-lee
While not there yet, if projections hold up, I could tell you the same thing
again in ~5 years.

I misunderstood the question - but if your goal is to become a millionaire
(and you are in your mid-twenties) and you keep chipping away at things like
401k, ROTH etc you will have a great back up plan, with the magic of
compounded interest, should the business attempts not work out.

------
RLG_RLG
Dear OP, you are asking the wrong question -- a person with 1 mil or even 100k
has access to different investment vehicles than a person with 10k or 100
bucks to invest.

TL;DR: save at least 10% of your gross earnings and earn compound interest
with savings. Split your money between 4 ETFs like RSP, DIA, QQQQ, and VEU.

1\. Get on a budget. Save 10% of what you earn or pay off your credit cards
first by saving 15%. Read "The Richest Man in Babylon"

2\. Mutual funds suck. One out of 10 years will be terrible and they only
spend a few years on top. How can you get consistent returns? They have high
fees. Instead invest in equity traded funds or ETFs. Read "The Big Secret for
the Small Investor" by J. Greenblatt and "One up on Wall Street" by Peter
Lynch. _Be a value investor not a trader!_ Plan to let your investments sit
and grow for years. If you want to buy individual stocks, pick for the list of
"dividend aristocrats". These are safe bluechips and you can re-invest the
dividends for a compounding effect!

3\. The fees and limited investment choices make 401ks a bad deal, even with
matching. A self directed Roth IRA will tax shelter your growth, but you have
to invest with money you paid income tax on (unlike a 401k).

4\. Bank account interest rates are a joke! For savings you get 00.05% CD
00.35% Over 500k in money market 00.3% Inflation is around 3%!

5\. For small investment amounts, a US Treasury savings bond is not bad. There
is no charge to buy or sell them and you do not have to pay taxes until you
cash them in. I Bonds pay the rate of inflation and possibly a bit more. There
are some penalties if you cash these bonds in before 12 months pass.

Be aware of things like how much it will cost to buy and sell an investment
and when you will have to pay taxes on your earnings.

For me it was very hard to save until I created separate accounts to keep my
funds in. I have been value investing in stocks and my portfolio has earned 8
- 10 % growth plus 3% in dividends. The dividends get reinvested so my
holdings grow like a savings account.

Read "How to Invest $50-$5,000" by Nancy Dunnan

------
GoldenMonkey
Mark Cuban's answer:

<http://blogmaverick.com/2008/10/04/how-to-get-rich/>

------
larrys
Go out and do some research with everyday business people and find what
problem they need solved that you could do.

------
bond
I heard somewhere you have to build something people want and are willing to
use/pay for it ;)...

PS: I'm not a millionaire.

