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Reality Millionaire: The New (Old) Game of 9 Rounds Anyone Can Play And Everyone Can Win

Oct 31, 2007
If making a million bucks were easy, we'd all be millionaires. Right? According to the statistics shared by Mike Peterson, co-founder of The American Credit Foundation and author of "Reality Millionaire: Proven Tips to Retire Rich," most Americans are losing the money-making game. Take 100 people at age 20 and fast forward them to retirement. Only five percent of them will be financially okay. That's not even 'great' or 'independent'. Just okay.

In fact, most people lose in rounds one and two. "There are different levels to financial freedom," says Peterson. "The first level of financial freedom is when you decide to take control of your finances. Let's take another step, at the point that you manage your finances and income so you're no longer in the red, but actually have a little money left over at the end of every month. Eventually we get to what I call ultimate financial freedom. I define that as, where you have enough money put away in investments that are spinning off enough of an income for you that you no longer have to go to work."

The real key to getting started according to Peterson is that people need to make a decision to be responsible for their own finances. There are certainly many related causes for our society-wide tendency toward money blunders. Lack of financial education in schools is certainly a factor but Peterson thinks the real problem is closer to home. As an adult, there is no reason someone can't go to a local library and tap into the wealth of information available and teach himself.

Once you commit to getting started, begin with rounds one and two below:

1. Round one is all about looking - really looking at your finances.

How much money will you need during your lifetime? Consider vacations, a child's wedding, a house, cars and then add a million because you'd love to have a million someday and you will need something to retire on. Now consider how much you'll earn. If you continue earning the same amount you currently do, how much will you earn over your working lifetime?

There's a discrepancy there for most people and it's easy to see why people who don't pay attention are loosing the money game big time. Without conscientiously managing your money, the discrepancy will get worse, not better. Since most people don't just buy a house with cash, they'll actually be paying a lot more than the asking price. That goes for anything purchased with credit.

The great thing about money is that there are lots of ways to make it. Of course, there are at least as many ways to spend it. Riches, cautions Peterson, is not about how much you earn, it's about how much you're saving and how well that money is working for you.

2. Round two is about finding your own pot of gold with the 10-15% of your spending that doesn't buy you very much and putting it where you need it most.

"I've been teaching classes in financial management for years, and I have never met anyone that couldn't find this extra money in their current budget," says Peterson. Start by writing down all of your monthly expenses. Most Americans can't account for 10-15%.

To get more exact numbers, you need to actually track your spending for at least 7 days but preferably a month. Write everything, even the loose change vending machine purchases, down. Don't change your spending habits just because you're tracking it this time around. That will come next as you fund an emergency savings account.

The first two steps really do keep most people from winning. Once you've committed to controlling your financial future and you've found a little extra money in your budget, you'll have the energy and excitement to move on to building an emergency fund, planning your debt repayments and starting to invest. If numbers aren't your thing, there are online calculators and other free resources on Reality Millionaire's book website that can help set realistic goals.

Ultimately, how far you go, and what you do are up to the attitude you start off with. In real life, unexpected costs are common and it is easy to lose confidence, but through persistence, patience, and above all, education and practice, you can achieve your dreams of being debt free and have a million dollars in your bank accounts and investments.
About the Author
'Dr. Proactive' Randy Gilbert enjoyed learning from Mike Peterson (RealityMillionaire.com) when Peterson was interviewed on "Inside Wealth Success" by Jay Aaron. Get the podcast or transcript of the interview for free: http://www.insidesuccessradio.com/Guests/Mike.Peterson
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