Black People : Minimum Wage Millionaires

Discussion in 'Black People Open Forum' started by Knowledge Seed, Aug 27, 2009.

  1. Knowledge Seed

    Knowledge Seed Well-Known Member MEMBER

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    On July 24th, 2009, the national minimum wage was raised to $7.25.

    As a minimum wage earner, if you work a full forty hours a week, you would earn about $250 a week after taxes.

    By committing to put 10%($25) of that aside every week for a year straight, you'd have saved $1300.

    Now let's put that money to work.

    For the most part, we all know that the stock market is the place that turns the quickest profits, right? We also know its probably the worst place to invest right now, right? Not necessarily......

    While individual stocks and actively managed Mutual Funds are plummeting, Index Funds are doing what they've always done: Make 10% annual returns.

    Most Index Funds have a minimum investment between 1,000- 2,500.

    Let's say you invest your $1300 in an Index Fund, and it brings you a 10% return.

    $1300 x 10%= $130

    Whether you know it or not, that $130 will be automatically reinvested in the Index Fund.

    Going into your second year of investing, you'd have $1430 from last year and an additional $1300 from your savings this year, which gives you a total of $2730.

    $2730 X 10%= $273

    $2730 + $273= $3, 003

    $3, 003 + $1,300= 4, 303

    You now have 4, 303

    Year 3:
    $4, 303 x 10%= $430.30

    $4, 303 + $430.30= $4, 733.30

    $4, 733.30 + $1, 300= $6, 033.30

    You've got $6, 033.30

    Year 4:
    $6, 033.30 X 10%= $603.33

    $6, 033.30 + $603.33= $6, 636. 63

    $6, 636. 63 + $1, 300= 7, 936. 63

    Year 5:
    $7, 936.63 X 10%= $793. 66

    $7, 936.63 + $793.66= $8730.29

    $8, 730.29 + $1, 300= $10, 030.29

    Since most Americans work for 40- 45 years, you should continue doing this for that entire period. If you do, you'll have well over $100, 000.

    Over the course of your retirement, you could invest portions of this money and turn it into a few million dollars.
     
  2. Putney Swope

    Putney Swope Well-Known Member MEMBER

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    Buy gold, when the market crashes, you will have something of value cause when it crashes this time, it will not be like in the 30s, when there was a manufacturing base and the average American saved 30%.
    Now folks work to jobs, just to get the same goods and services they got 10 years ago for the same amount of money
     
  3. Blackbird

    Blackbird Well-Known Member MEMBER

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    I will drop on this after I finish some other stuff.
     
  4. DARKSIDE MAGICK

    DARKSIDE MAGICK Well-Known Member MEMBER

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    EROS/THANATOS


    THIS TYPE OF INVESTMENT IS LIKE 30 YEARS TOO LATE... PLUS THE RATE OF INFLATION WILL EAT INTO WHATEVER PROFITS ONE'S HAVE... WHY DO I HAVE TO WORK(LMAOOOOOO) 45 YEARS TO SEE A MILLION DOLLARS WHEN A MILLION DOLLARS WOULD BE WORTH LIKE 300,000 DOLLARS


    BABA DARKSIDE --- FAST MONEY IS THE BEST MONEY
     
  5. Blackbird

    Blackbird Well-Known Member MEMBER

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    Ok, y'all... Let's test the strength and financial sense of Knowledge Seed's proposal. I ran a few calculations for the layperson to chew on. Here's what I came up with.

    Basically, the 5 year average equates to a 26.89% profit margin with a 144.14% return on assets and equity. The last year of the experience the profit margin was slightly better than 20% at 20.87%. Anything that allows you a profit of > 20% is pretty dang decent. Of course, for you boom-boom investors, I would at that point take my $10,000 or so dollars and diversify because both your profit margin and ROI trend downward with each year of simple investment, although I would start with another $1300 and do the same thing.

    That's my analysis for all us laypeople out there.

    Tuhwi
     
  6. bigtown

    bigtown Well-Known Member MEMBER

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    Also gold has real value not faith value, meaning gold is valuable all over the world, the dollar has no real value at all that's why it's faith value. Why do you think the federal reserve bought all of americas gold back in 1913 and began printing paper that is no longer backed by anything of value. That's why it's hilarious to watch idiot americans fall for this stimulus package fiasco.
     
  7. Knowledge Seed

    Knowledge Seed Well-Known Member MEMBER

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    Instead of attacking my post, couldn't you have used your vast financial knowledge to offer options on investing?
     
  8. oldiesman

    oldiesman Well-Known Member MEMBER

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    nice concept,except that most folks making minimum wage for the most part don't have[25.00]to set aside i believe that for the most part they're just trying to keep thier heads above water.
     
  9. Blackbird

    Blackbird Well-Known Member MEMBER

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    Many people making minimum wage can not, especially in today's society, afford to save, but one thing I noticed when I was affiliated with banks... many people bringing in $300-$500 every two weeks were overdrawing their accounts every pay cycle off of $100-$250 transactions at Nordstrom's, Dilliard's, Macy's and a few other high-end department stores. I was making over $2000 every two weeks with quarterly bonuses sometimes over $10,000.00 and would bat my eye at anything over $120.00.

    Someone working at the new minimum wage level would be earning about $450.00 after taxes (average) if they worked a 40 hour work schedule. So let's say that equates to $900.00 post-tax monthly. Off course, rent would take up a significant amount, up 80% depending where one lives. Afterward, transportation and regular cost of living would gobble up that in no time. Thus, the new wage is still unrealistic, but as stated when you got people who expect to overdraw and NSFs are a way of life - I suggest that wasting hard earned money of b/s is nonsensical and I would rather OD because I was saving and investing than buying clothes for the club or getting my old lady's nails done.

    Tuhwi
     
  10. Knowledge Seed

    Knowledge Seed Well-Known Member MEMBER

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    Here's the deal: As of July 2008, the US population was 304, 059, 724. The majority of Americans make more than the minimum wage. According to recent reports, the minimum wage raise helped an estimated 100 million people, which is less than a third of the population.

    And as Bro. Blackbird noted, we spend a lot of money on luxury items.

    It is also a well-known fact amongst financial industry insiders that Americans, on average, spend $1.05 for every dollar we receive.

    If this is indeed the case, I can definitely see why people would have trouble saving $25 a week.

    Maybe we should change our spending habits, huh?
     
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