Tip of the Week: Step by Step (7/17/00)

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	Step by Step Financial Tip of the Week by Deloitte & Touche OnLine July 17, 2000

An author learns how millionaires got that way, through investing.

See our archive of previous tips on your money, your taxes and your financial plan.

Talk to enough millionaires, and you might learn how to be one. Charles (Chuck) Carlson, who writes the newsletters DRIP Investor and No-Load Stock Insider, interviewed 170 "investment" millionaires, people who made their money investing rather than running a business or inheritance. Carlson has turned what he learned from these interviews into a book, Eight Steps to Seven Figures. Here are his eight steps:

Start early.
Set a personal goal, such as buying a retirement home.
Buy only stocks and stock mutual funds.
Swing for singles, not home runs. That is, buy stocks in solid, quality companies.
Invest every month.
Buy and hold, and hold and hold.
Take what Uncle Sam gives you. Long-term gains are taxed more leniently than short-term gains. Invest in a 401(k).
Limit shocks to your finances. Don't job hop, don't get divorced. These millionaires also averaged fewer than two children.

Carlson also found that most were college educated, and were conservative investors, avoiding options and owning stocks for long periods.