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Do you really want to be rich?

Not to burst your bubble, but the odds of being very rich aren't that good. However, there is a satisfying alternative.

By MSN Money Partner Jul 18, 2012 10:07AM

This post comes from Tara Struyk at partner blog Wise Bread.


Wise Bread on MSN MoneyHere's a statistic for you: According to the U.S. Census Bureau, about 57% of adults play the lottery in a given year. That suggests there are a whole lot of people out there who are angling to be rich -- or at least richer.


Image: Money (© Grove Pashley/Corbis)Maybe it's only human nature to dream about wanting more out of life, whether that means a bigger house, a better car, more time off, or real financial security. But here's the thing: While I'd venture to guess that most people would like a little extra padding in their finances, very few actually take any steps to make it happen.


To me, that's a bit like wishing for washboard abs while watching the "The Biggest Loser" workout videos -- and scarfing down a family-sized bag of potato chips. What I mean to say is that it just doesn't make sense.


It makes me wonder: How many of us are actually willing to do the real work that's most often involved in raking in the big bucks? And if we aren't willing to get our hands dirty, are we really interested in being rich at all? (See also: "5 money lessons from millionaires.")


What it takes to be rich

Take a look at the Forbes list of the richest people in America, and it becomes very clear that there are really only a few key ways to become filthy, stinking rich (because, let's face it, moderation just doesn't factor into our dreams):

  • Inherit.
  • Found a successful company.
  • Invest.

Unless you're the heir to a major fortune, you can scratch the first one off your list. Now you're left with two solid options. And by solid, I mean possible, not easy. (Post continues below.)

Building a business is a huge commitment of time, effort, money and risk. In the end, a lot of startups fail despite the heroic efforts of their founders. But when your own business pays off, you get to enjoy a lot more of the spoils than if you were simply an employee.


Investing your way to wealth may be even more difficult. Even with high returns, you'll need a fairly large amount of money to work with. That means you have to either earn more or save more. Plus, scoring a huge win (often called a "tenbagger") in investing is very rare and tends to be a once-in-a-lifetime deal, even for many of the best investors out there.


A practical option

I don't mean to burst your bubble but, all in all, the odds of being very rich aren't very good, at least not in the near future. So do you have any chance of being richer? The answer is yes -- if you can muster a little patience.


Let's go back to the people who play the lottery. According to the North American Association of State and Provincial Lotteries, about 20% of players spend more than $1,300 per year on lottery tickets. That's a lot of money, especially when you consider that those regular players tend to be on the lower end of the income spectrum.


Now, I can totally understand the lure of dreaming about winning the jackpot, but based on the odds, I think I can safely say that it won't happen to you. What I can say with all certainty is that if you were to invest that $1,300 per year at a modest 5% rate, you'd have $70,000 at the end of 25 years. Kick in a little extra here and there, and you'll have yourself a respectable retirement account. OK, so maybe you won't be rolling in a giant pile of cash, but having some money to spare during retirement doesn't sound all that bad, now does it?


Do you really want to be rich?

"Whether rich or poor, it's always nice to have money," the old saying goes. I'm not going to say that having more money can't make life more comfortable, but most studies show that the sense of well-being that comes from wealth peaks well below a six-figure salary, never mind millions.


That suggests that you might get more mileage out of living in a house and dreaming about a mansion than you would from actually crossing the threshold to become truly rich. Plus, a level of wealth that meets all your needs, leaves room for a few wants, and allows you to build a secure financial future is a lot more attainable for everyone.


The bottom line is that there's no magic pill for wealth. Hard work and smart choices play a key role, but any successful businessperson or investor will also tell you there's more than a little luck involved. Working hard, saving as much as you can, and investing well will put you in a position to capitalize on that luck. The best part is, even if you never get lucky, you'll still be better off.


That's more than I can say for the other options. Spending your money on lottery tickets (or just idly wishing for a bigger bank account) are likely to leave you broke and possibly bitter.

So here's the bad news: Extravagant wealth is pretty hard to come by, and unless you're the heir to a fortune, it's pretty unlikely you'll get there, even with hard work and sacrifice. So why not work toward creating a life in which your needs are met and you don't have to walk the thin line between survival and financial failure?


Sure, it's a lot less glamorous than a million-dollar lifestyle. The good news is, if you put in the work, the odds on this one are in your favor.


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