Armchair Millionaire Community Bulletin: Conquer Your Financial Fears

Before you throw in the towel and assume that you'll never get ahead financially, take a close look at what you actually can achieve with some persistence and a common sense approach.

New York, NY (PRWEB) April 5, 2005 -- If you have financial worries, you're certainly not alone. We asked members of the Armchair Millionaire community to tell us about their financial fears, and heard a number of wide-ranging responses. Here are just a few:

"My biggest financial worry is that I will outlive my money when I retire. What I am doing is saving the max for my IRA and 401(k) every month for as long as I work." --Mom2Two

"My biggest financial worry is that my daughter and two granddaughters will have a tough time financially. There is an ever-widening income gap in this country between the wealthy and the rest of us." --bronxite

"My biggest financial worry is never being able to afford to buy a house in the San Francisco Bay area, where I grew up and have family. I may have to move out of state to buy a home." --Mike

"My fear is having a big crisis or many small ones happening at the same time. Last week, we needed a new roof ($2,000), a new dryer ($400), a new dishwasher ($500), repairs to my husband's truck ($300), heater repairs ($400) and the accountant called yesterday and said we owe $4,000 to the IRS! Thankfully we'll be fine. Long term, I worry that my young kids will grow up living paycheck to paycheck and on the brink of disaster." --YJ

The key to overcoming your financial fears so that you can take positive, constructive steps is to break them down into what is real and what is not. More often than not, our fears are based on misinformation. To help you clear out the bad information, my guide busts the biggest financial myths.

The Armchair Millionaire's Guide to the Biggest Financial Myths

I would have to earn a lot to get ahead. Many people assume that the only way to be able to save is to have a large income. In fact, what you earn is much less important than what you spend. More income won't necessarily provide you with financial security. Whether they are conscious about it or not, many people adjust their spending upward with their income, ending up with the same net worth earning $100,000 a year that they had when they earned $40,000 a year.

Only the pros get rich investing. You're not alone if you think that the only people who can strike it rich investing are the Wall Street pros. However, it turns out that some of the simplest investing strategies--ones anyone can use--are also the most effective at building your wealth. Consider that in the ten years ending December 31, 2003, the average general equity mutual fund--all of them managed by investing professionals--returned 9.6 percent a year. That sounds good until you find out that low-cost index funds--which are largely unmanaged--returned an average of 10.4 percent a year. By keeping their costs low, these funds outperformed the professional money managers. The good news is that every ordinary investor can buy an index fund.

You have to have money to make money. People commonly believe that the only way to build a substantial investment portfolio is to start out with a big chunk of cash. In fact, you can build your own diverse holding of stocks by buying an index fund, and do it without much to start. Many funds have minimum initial investments of $500 to $2,000 (or lower if you're investing through an IRA). Then you can sign up for automatic contributions of as little as $50 a month.

I'll never be a millionaire. Lots of folks assume that they could never possibly reach that magical $1 million mark. However, it's easier than you probably think. Stashing away $500 a month into an investment account returning 9.5 percent a year (a tad under the historical stock market average) will yield just over a million bucks in 30 years.

The Bottom Line: Before you throw in the towel and assume that you'll never get ahead financially, take a close look at what you actually can achieve with some persistence and a common sense approach.

The Armchair Millionaire Weekly Survey: When you put a house on the market, what should you do make it sell fast? Log on to www.armchairmillionaire.com and let us know.

Lewis Schiff founded the Armchair Millionaire Web site in 1997. His first book, The Armchair Millionaire, was published in 2001. Schiff's newest report, "How to Know When You Are Rich," is now available at www.armchairmillionaire.com.

Contact Information:

Lewis Schiff

Armchair Millionaire

877-833-2823

http://www.armchairmillionaire.com

###