Can Artists Become Millionaires?

 

By Larry Kahaner

aila_popmoney_121208 (1)

Robert Dowd — Pop Art Money

During my last presentation at the University of Connecticut, Waterbury, an attendee came up afterwards and asked me about my assertion that anyone could become a millionaire or more by the time they retired simply by saving and investing. She said: “I’m planning on becoming an artist and artists often don’t make a lot of money. Can I still become a millionaire by age 65?”

The answer is ‘yes.’

The key to becoming rich by retirement is not about how much you make but how regularly you save and invest. By putting aside what you can each month into a stock index fund when you’re in your 20’s, it will grow at around 9 percent annually for many decades. Through  the power of compounding (remember compound interest from middle school?) your investments will grow large. See this blog for details.

I emphasized to her that getting rich is not about ‘timing’ the market but time ‘in’ the market. People smarter than all of us have tried to buy markets at the bottom and sell at the top Nobody can do that on a long-term basis. Currently, the smartest people in the room, the mutual and hedge fund managers, can’t beat the indexes. Buying the same dollar amount (it’s called dollar cost averaging)  of index funds every month is not only easy but it works.

Then she asked, “What if there are months that I have no money invest?”

I replied: “If you miss a month or two, your nest egg won’t suffer in the long term, but try to put something away, even if it’s only $20 every month. Even that small amount will make a difference.”

The would-be artist left the room feeling a little better about pursuing a career that will offer her satisfaction even though she may or may not become rich through her work alone.

One last piece of advice while on the topic of work. I see too many young people going into jobs or careers just for the riches, prestige or parental respect they can offer. If you want to be a doctor, lawyer or Wall Streeter because you think the work will be exciting, satisfying and rewarding then great… good for you. But if you’re doing it just for the money, you will become miserable. Guaranteed. Maybe not today or tomorrow, but someday you will regret your decision.

The key is to find something you love to do, then figure out how to make money doing it. Not the other way around.

 

A former Washington correspondent for Business Week magazine, Larry Kahaner is the author of 15 books, including the best-selling Competitive Intelligence, a Book-of-the-Month selection that has been translated into six languages. He has also written Values Prosperity and the Talmud; Business Lessons from the Ancient RabbisThe Quotations of Chairman Greenspan and AK-47; the Weapon that Changed the Face of War. Full bio.

His in-person, interactive, multimedia presentation titled Fiscal Fitness Boot Camp  is available to colleges, universities and companies. You can email him directly at Larry Kahaner.

He is represented by Wolfman Productions, Inc.

 

 

 

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