How to turn $1000 into $1 million

I'm sure I have your attention quickly with this headline. A nice topic, but not a get-rich-quick one.

" Retire comfortably: $1 million in 45 years
...let's not get greedy, and let's not extrapolate for decades out into the future what has been a start beyond even the most optimistic expectations. What if we dial back our expectations and assume a still very aggressive annualized 16.6% return on our initial investment? In that case, $1,000 would take 54 months to double. And under that scenario, it would take approximately 540 months for $1,000 to double 10 times to reach $1 million -- or 45 years."

Read the whole article on Motley Fool.

Returns of 16.6% per annum are highly difficult, if not impossible, to achieve year after year. The lesson here is what it takes to make $1 million is highly unreasonable and you should not expect it. Invest regularly. Get rich slowly.

The Economic State of the Union

This story passed along to me by my good friend Frank.

The Economic State Of The Union -- 2008
BY CHARLES McMILLION

Here are the first few paragraphs. I encourage you to read the rest...

In just the past seven years, U.S. household debt almost doubled and federal debt soared by near two-thirds, rocketing by a combined $10.5 trillion. The total combined debt of households ($14.4 trillion) and the federal government ($9.2 trillion) is now 168 percent of GDP, far higher even than in the brief spike during World War II. All other levels and ratios of debt also have soared far beyond any past precedent.

Yet, this record-shattering explosion of debt stimulus created the weakest seven-year job growth (4.4 percent) and one of the weakest periods of real GDP growth (18.1 percent) since the Depression: less than 6 million new jobs ($1.8 million of debt per job) and a mere $4 trillion increase in GDP.

This period began with the collapse of Wall Street's stock market bubble from the late 1990s and ends now with the collapse of Wall Street's housing and other debt bubbles. That such massive mortgage and consumer borrowing, tax cuts and war spending produced such remarkably weak real economic results suggests the months and years ahead could be quite difficult.

Yet, along with the Fed rate cuts for cheaper debt, the only policies seriously considered by this year's crop of Wall Street-funded political candidates is more short-term household and federal debt "stimulus." Locked into a failed, 30-year-old ideology of deregulation and debt, there is still no option to compete with the remarkably effective industrial and trade policies pursued by China and others.

Buffett: Bank woes are "poetic justice"

The woes in the U.S. financial sector are "poetic justice" for bankers who designed and sold complex investments that have since gone sour, billionaire investor Warren Buffett said on Wednesday.

Buffett warned years ago about the coming decline of the US dollar and about suspect banking - lending practices. I could see it coming as well. No one listened to me either!

Read the story on Reuters:
http://www.reuters.com/articlePrint?articleId=USN0631767220080207