million
Fatal Financial Fantasies
By Amy Fontinelle
These dreams are likely to burst - and may blow away your financial future in the process.
1. I'll receive a large inheritance
Setting aside the heartlessness and laziness of waiting for a close family member to die so you don't have to make your own money, your grandparents will probably leave the bulk of their money to their children, not to you, and with any luck, by the time your own parents pass away, you'll be at least 50.
What's more, if your grandparents are lucky enough to live long lives, or if they have to spend long periods in the hospital, it is likely that they will have used up much of their nest egg by the time they pass away. If you do receive an inheritance, it might not be as much as you think.
2. I'll win the lottery
You already know how low the odds of winning the lottery are, but millions of people play it every day. What could be easier than winning $1 million by picking out a few numbers? Therein lies both the appeal of the game and the difficulty of winning. Even if you did win the lottery, you might not be able to hold onto the money. If you don't have the skills to manage the money you have now, how will you manage $1 million?
3. I'll start a website and make a killing off advertising
While the success stories of people who make a full-time living from either "junk" or legitimate websites and blogs can make anyone want to quit their day job, running one of these sites is not as easy as it sounds. Popular advertising programs hire people to keep an eye out for sites that clutter the web and make it more difficult for people to find valuable information online. If advertisers discover that you are running a junk website, your account is likely to be terminated and your profits forfeited. It is certainly possible to make money from running one or more legitimate websites or blogs, but it's not a viable get-rich-quick scheme.
4. I'll make a ton off an initial public offering (IPO)
While investing in the stock of a rising star seems like a fast and easy way to make a killing, this logic has several flaws. First, to make money in stocks, you have to have money to invest. If you can afford to invest $100 in a stock, even if it doubles in price, you've only got $200 - hardly enough to quit your day job. Second, you'll need a combination of stock-picking luck and skill to pick out the next big thing before everyone else catches on. Third, just because a private company decides to go public doesn't automatically mean that its stock is a good investment.
Reality Check
Acknowledging that most of your financial fantasies probably won't come true isn't the downer that you think it is. If you've been hanging on to these fantasies as the only answer to your money problems, they've probably been holding you back from reaching your full potential. There are many more realistic ways to become financially comfortable, if not wealthy. Here are several tried-and-true plans that are worth dreaming about.
1. I'll start my own business
When done correctly, starting your own business can be a great source of financial freedom. While salaried employees receive the same incentive no matter how little or how much work they do, those who are self-employed are limited only by the number of clients they're able to secure and the number of hours they're willing to work.
If you do want to start your own business, however, keep in mind that this isn't a get-rich-quick scheme, either. Many small businesses fail within the first two years because of inadequate planning and poor execution.
2. I'll finish university
If anyone has ever told you or you've ever thought that you're not university material, now is the time to defy that belief. There are universities for people from all backgrounds and with all time commitments. A university degree opens the doors to higher-paying jobs and a higher lifetime earning potential. Even though many jobs won't make use of the majority of the things you study in school, a bachelor's degree is a prerequisite for getting an interview at many companies.
3. I'll make passive supplemental income through investments
If you save and invest a little bit of every paycheck, your money will eventually start working for you in the form of dividends. Investing in dividend-paying stocks and mutual funds can put more money into your account with very little work on your part. However, you'll need to make regular investments for this strategy to pay off, because the more shares you own, the higher the dividend payment you'll receive.
4. I'll buy a house
While buying and selling real estate isn't a surefire investment strategy, there are several relatively proven methods for achieving success in this field. Taking in a renter to help pay down your mortgage faster than you could on your own, buying property in an up-and-coming neighbourhood, or fixing up a downtrodden property can all create wealth if you're willing to make the necessary sacrifices. However, buying property can have pitfalls, so do your homework carefully before jumping in.

