Making Millions For Dummies

Robert Doyen is a former Enrolled Agent with the Internal Revenue Service and former Registered Representative with the Securities and Exchange Commission. He now manages his seven-figure investment portfolio. Meg Schneider is an award-winning writer with more than two decades of experience in television, radio, and print journalism.

• Introduction 1About This Book 1Conventions Used in This Book 2What You’re Not to Read 3Foolish Assumptions 3How This Book Is Organized 4Part I: Getting Your Finances in Order 4Part II: Strategies for Building Wealth 4Part III: Paths Paved with Gold 5Part IV: Managing Your Wealth 5Part V: The Part of Tens 6Icons Used in This Book 6Where to Go from Here 7Part I: Getting Your Finances in Order 9Chapter 1: Gathering the Building Blocks 11Shattering Money Myths 12Understanding Your Relationship with Money 13Asking yourself how you think about money 14Changing your thinking 15Making a Plan 16Choosing Your Path to Wealth 17Staying There When You Get There 18Things Wealthy People Know 19Chapter 2: Understanding Your Money Personality 21Figuring Out How You Feel about Money 22The planner 22The spender 23The needster 23The Lord (or Lady) Bountiful 25The hoarder 26Changing How You Feel about Money 27For the planner: Focusing on flexibility 27For the spender: Discovering yourself 28For the needster: Unlocking emotions 28For Lord (or Lady) Bountiful: Compromising 29For the hoarder: Growing up 30Knowing What You Won’t Do for Money 30Living your values 31Understanding trade-offs 31Minimizing Your Risk 33Knowing what you’re getting into 33Developing a long-term outlook 34Starting Your New Life with Money 34Chapter 3: Setting Your Financial Goals 37Identifying What’s Important to You 38What you want in the next five years 39What you want for the future 40What you want now 41Putting Your Goals in Writing 42Starting with the general 43Making your goals SMART 43Keeping your goals in mind 46Staying on Track 47Chapter 4: Working Out Finances with Your Spouse or Partner 49Spill Your Guts: Sharing Your Financial Story 50How much you know 50What you need to know 51Why you need to know 52Getting the most out of your financial partnership 53You Like Potato and I Like Potahto: Identifying Your Differences 53Talking about your expectations 54Discussing your goals 57Go Team! Setting Priorities Together 58Finding a mutual comfort zone 58Focusing on the positive 59Part II: Strategies for Building Wealth 61Chapter 5: Living below Your Means 63Spending Money You Don’t Have 64The instant gratification factor 65Who are you keeping up with again? 66Changing Your Spending Habits 67Anticipating Changes in Your Means 69Losing an income 69Dealing with a struggling economy 70Planning for new expenses 71Chapter 6: Managing Debt and Freeing Up Your Money 75Understanding Your Credit 76The credit bureaus 76Your credit score 77Good Debt versus Bad Debt 80Figuring out what your debt costs you 81Getting a handle on your debt 83Organizing Your Budget 84Getting started 85Creating your budget 86Keeping it flexible 87Freeing Up Your Money 87Saving money with your car 87Saving money at home 88Saving money when you’re shopping 89Avoiding Fees and Extra Charges 91Overdraft charges 91Maintenance fees 92Late fees 93Chapter 7: Starting on Your Savings Plan 95Understanding Why Saving Matters 96Unexpected expenses 96Major life changes 97Developing a Saving Attitude 98Finding pleasure in saving 99Saving for specific things 100Changing your life 100Figuring Out Where to Start 101Setting your priorities 101Paying yourself first 102Making it automatic 103Putting it beyond temptation’s reach 104Filling your emergency fund 104After your emergency fund is full 105Chapter 8: Getting the Most from Your Job 107Allocating Your Paycheck 107Using direct deposit to augment your savings 108Taking advantage of pretax deductions 109Pensions 111Stock Plans 112Stock options 112Employee stock purchase plans 113Restricted stock awards 113Restricted stock units 114Using What You’ve Earned 114Holiday, vacation, and personal time 114Raises 115Bonuses 115Other perks 116Changing Jobs 116What to do with your 401(k) 117Severance pay 118Health insurance 119Part III: Paths Paved with Gold 121Chapter 9: Starting Your Own Business 123Before You Jump In 124Starting from Scratch 126Determining the kind of business you want 126Assessing your skills 127Figuring out what you’ll need 127Building it into the black and beyond 130Buying a Franchise 131Weighing the pros and cons 132Focusing on funding 133Determining the best opportunity for you 134Taking Over an Existing Business 135Reviewing financial statements 136Keeping an eye on contracts and leases 136Paying attention to potential or ongoing litigation 137Investigating other areas 137Chapter 10: Inventing a Better Mousetrap 139Coming Up with Your Big Idea 140Pairing problems and solutions 140Checking out your idea 141Getting Paid for Your Big Idea 142Seeing the value in your idea 142Outcommercializing the competition 144Licensing versus producing and selling outright 145Protecting Your Big Idea 147Patents, trademarks, and copyrights 147Confidentiality 149Recordkeeping 150Chapter 11: Inheriting Wealth 151Dealing with the Emotional Impact 152Understanding what you feel 152Taking your time 154Thinking of your inheritance as yours 155Managing Your Inheritance 155Recognizing the tax implications 156Breaking out that list of goals 156Matching goals and strategies 157Blowing it — or at least some of it 157Chapter 12: Winning Wealth 159Coping with Sudden Wealth 160Building Wealth from Winnings 162Taking your time 162Getting professional advice 164Talking to your family 164Implementing a management plan 165Treating Gambling as What It Is 167Understanding the odds 168Taking the right attitude 169Chapter 13: Investing for Wealth 171Developing Your Investment Philosophy 172Determining your risk tolerance 172Getting advice from the big guns 175Choosing whom to listen to 178Taking control of your investments 179Investing in the Stock Market 179The importance of diversifying 180Cultivating patience 182Things to look for 183Things to avoid 183Getting a broker 184Doing it yourself 185Avoiding Big Mistakes 186Hidden fees 187Misrepresentations 188High-pressure sales tactics 189Ceding control to your broker 189Chapter 14: Joining the Landed Gentry 191Building Wealth in Your Home 192Knowing what you can afford 192Understanding your mortgage options 195Building equity — and keeping it 197Considering Investment Property 200Figuring out your plan 200Understanding the market 202Dedicating your time 203Developing your professional network 204Exploring Real Estate Investment Groups 204Understanding Real Estate Investment Trusts 205Things to look for 206Things to avoid 207Part IV: Managing Your Wealth 209Chapter 15: Going to the Pros 211Choosing a Financial Planner 212What to look for 212Where to look 213Meeting prospective planners 214Knowing what you’re paying for 216Choosing an Investment Broker 218What to look for 218Figuring out the fees 221What to stay away from 222Choosing an Attorney 223What to look for 223Where to look 224What to avoid 225Choosing an Insurance Agent 225Independents versus captive agents 225Where to look 226Choosing a Tax Preparer 226What to look for 227What to avoid 228Chapter 16: Going for Growth versus Going for Income 229Determining the Right Mix for You 230Factoring in your risk tolerance 232Assessing other factors 232Understanding Investment Risks 233Low-risk investments 233Moderate-risk investments 234High-risk investments 236Keeping Your Balance 239Reassessing your goals 239Avoiding common (and expensive) mistakes 240Chapter 17: Minimizing Uncle Sam’s Share 245Filling Out Your W-4 Form 246Selecting your filing status 246Claiming single/zero 248Claiming allowances 249Figuring deductions and adjustments 251Keeping Records 252Knowing what’s deductible 253Investing in accounting software 253Creating your own spreadsheet 254Crunching the Numbers 254Are you better off itemizing? 255Will you run up against the Alternative Minimum Tax? 255How can you offset capital gains? 256Avoiding Common Mistakes 257Missing deductions you’re entitled to 258Setting yourself up for penalties 259Doing It Yourself or Hiring a Pro 260Chapter 18: Covering Your Assets 261Insurance Basics 261Understanding coverage and limitations 262Weighing deductibles and premiums 263Evaluating insurance companies 263Homeowner’s Insurance 264Auto Insurance 265Collision 266Comprehensive 266Liability 266Insuring against the Inevitable 267How much life insurance you need 268Term life versus whole life 270Disability Insurance 273Your employer’s plan 274Private disability insurance 275Social Security disability 277Long-Term-Care Insurance 277Insurance You May Not Need 279Car-rental insurance 279Travel insurance 280Life insurance for your kids 281Chapter 19: Planning for Your Heirs 283Putting Your Wishes in Writing 283Figuring out what you have to leave 284Choosing an executor 285Divvying up your estate 286Paying final expenses 288Using Trusts in Estate Planning 289Defining trusts 290Recognizing the advantages of trusts 290Getting Professional Help 293Starting early 293Getting the right kind of help 294Knowing what it’ll cost 295Storing Your Estate-Plan Documents 295Chapter 20: Keeping Your Finances in Good Health 297Keeping It Simple 298Engaging the autopilot 298Cleaning up the clutter 299Taking the universal view 300Letting your money work for you 301Giving Your Finances Regular Checkups 301Rebalancing your portfolio 303Weeding out what you no longer need 303Part V: The Part of Tens 307Chapter 21: Ten Traits of Millionaires 309Seeking Independence 310Living Life, Not the Lifestyle 310Working Hard — And Long 311Staying Positive 311Overcoming Failure 312Being Organized 312Building a Network 313Being the Boss 313Striking a Balance between Money and Your Life’s Work 314Growing, Growing, Growing 315Chapter 22: Ten Ways to Find More (Of Your Own) Money 317Keeping Track of Your Spending 317Distinguishing Between “I Need” and “I Want” 318Assigning Your Own Value to Purchases 320Avoiding Bargains That Really Aren’t 320Spending Now to Save Later 321Getting Rid of Credit Card Balances 322Eliminating Hidden Fees 323Maximizing Tax Deductions 324Using Coupons, Rebates, and Rewards Programs 325Finding Lost Money 325Chapter 23: Ten Ways to Make Your Money Work Harder 327Paying Yourself First 327Making Your Money Earn Its Keep 328Socking Away Money in CDs and Money-Market Accounts 329Maximizing Matching Funds 330Finding Free Money 331Saving for Major Purchases 331Funding Traditional IRAs 332Taking Advantage of Roth IRAs 332Saving for College with 529 Plans 332Taking the Long View 333Chapter 24: Ten Ways You Can Tell You’re a Millionaire 335What Got You Here Stays with You 335You Work Because You Want To 335You Focus on Yourself — Not on What Others Have 336You Update Your Goals 336You Stay Informed and in Control 337You Say No 337You See the Benefits of Risk 338You’re Prepared 338You Enjoy the Abundance in Your Life 338You Count Your Blessings 339Index 341