Be Aware of the Commercial Mortgage Loan Terms

Term Predatory Lending
Home mortgage defaults and increasing real estate forclosures have caused economy down fall since the beginning of the summer this year. Now, many businesses are laying off workers. Report shows that many other companies are planning to lay off more people. There is no doubt that we are entering into depression.

I recently figured out the reason why there are many foreclosures and default in real estate. Because banks and mortgage companies think diffrently, not for the better. Their lending practices seems backward. If the banks and mortgage companies worked with home owners before their loan default started, they could have saved a lot of home owners and we wouldn't have had as many as foreclosures.

Now, I have seen the same in the commercial mortage industry.

The other day I received a following letter from a bloger who owns a mobile home park. The recent eonomic condition has catched up on her business and she has been looking into refinancing her commercial mortgage. However, she ran into an unexpected term penalties that had not disclosed to her in written form before signing the mortgage. Before seeking the refinancing option, she contacted her bank and ask for readjustment or loan modification. However, the bank's response is astonishing.

Here is the letter:

We have a commercial loan from M&T Bank. It's originated by Silver Hill under its subsidiary Bayview Loan Company on Sept. 2007 and Bayview sold to M&T Bank after 7 or 8 months later. The loan is for a small MHP.

Recently, our tenants are having problems with their jobs. Consequently, a few can not make their rent payments on time. Therefore, we are having a tough time making a mortgage however, we tried to make the payment on time because we are hoping to keep our credit in tack for refinancing the mortgage with low interests and low monthly payment in order to self sufficient.

We called M&T Bank to consider the readjustment or loan modification possibility but M&T told us that we have to be on default status in order to be considered. So, we looked for another bank to refinance the mortgage.

However, we found out that our payoff information from M&T Bank for refinancing our mortgage was very disturbing. Terms and early payment penalties were so severe that we do not have the chance. It turned out to be our early payment penalties were over $160,000 (57%) on the loan amount of about $279,000 and terms were 7 years early payment penalty plus 10 years payment penalty thereafter, which it was not disclosed before the contract.

I discussed with many business people and loan brokers but they never heard such terms. So, I hired a predatory lending mortgage lawyer and he tried to resolve the problem with M&T Bank directly; however, M&T Bank told him that commercial loan is norm in that terms. Basically, M&T Bank wants $160,000 penalty if we want to refinance it or rather see the default or foreclosure on the loan.

The lawyer told me that he is not expert in commercial loan and he told me that we should consult with other commercial mortgage lawyer.

Please investigate the term predatory lending practice. Are these terms are norm in commercial loans? There should be some kind of restriction for commercial loans.

I don't believe our forclosure would help M&T nor our situtation. The city our MHP is in, currently the highest unemployment in the state. We are doing everything to work with tenants financial situation. We're asking M&T Bank to give us the opportunity to refinance in order to lower our interest rate and monthly payment.

I'm trying to find an answer to send my letter to anyone who listens. This will help others to be aware on getting the commercial loan in the future.
Thank you for reading.

Examine Your Loan Terms
AS the letter indicated, be aware of terms and any hidden clause on your business mortgage before you sign.

As usual however, some successful business people look at the current condition as an opportunity and use their creativity to figure out how to make money while many people are complaining and waiting on the side walk for things get better. However, it is difficult to jump on new businesses if you lost money in real estate, stock, 401K, and other form of investments in recent months.

There are many opportunities whether we are in a prosper time or in depression. If you're thinking of going into a business and seeking a loan, this will be a great lesson.

Millionaire Secret

How Do I Become a Real Millionaire?
By: Daegan Smith
You all have your dream of one day waking up and finding a genie in a bottle who will grant your wish to become rich in an instant.

Becoming a millionaire is a possibility.

You just need to have a clear mindset about your financial goals and not expect to earn thousands of dollars in the flick of a finger.

Here are some steps on how you can become a REAL millionaire:

1. Face up to the facts.
   Even in America where a lot of opportunities and possibilities arise, there are still citizens who are buried in debt and who have less than an ample amount in dollar savings.
   
   Although a lot of people are becoming millionaires, there are still more who live beyond their means and take on debts which are more than they can handle. Be literally one in a million and stay away from this attitude.
   
2. Have the correct mind set.
   Always think that if you only set your mind to do something, you can do it. If you want to become a millionaire, you can be one. Being a real millionaire is a state if being. Know how to make your money, how to spend it wisely and how to use it to your advantage.
   
3. Be aware of exactly what "money" means to you.
   Most people consider a lack of money as a problem. You must turn around and consider this situation as an opportunity. It is all in your attitude and the way you look at things. Start thinking of money as a resource, like time, to be used and managed wisely. Loving it too much or spending it inefficiently will not get you anywhere.
   
   Having more money might get you to places and earn you a lot of things, but it also increases your responsibility towards yourself and to society.
   
4. Go back to basics.
   While you are in the process of earning your first million - which is always the hardest to earn - you should go back to your basic foundation which is your attitude towards your work, other people, your family, your deep-set values and integrity. If you can handle all that wealth and still be "human" enough, then you are halfway to becoming a millionaire.
   
5. Earn more, spend less.
   Now that you have your attitude and all the basic elements out of the way, you can concentrate on your finances. You will not get to be a millionaire if you go on spending more than what you can make. Sit down and calculate. Make an in-and-out list of your budget to track your cash flow.
   
   If you are living on credit and are using one or more credit cards to live off until your next salary, get professional help to handle your finances.
   
   If you are expecting to live off from one payday to another, you can cut your spending by 25% and this is entirely possible. Remove the regular self-indulgent activities and items from your list and you would see a significant decrease in your monthly expenses.
   
6. Save, save, save!
   A good rule of thumb is to save about 5 to 20 percent of your income.Another option is for you to increase your savings per month. If, for one month, you allotted 1%, increase it to 2% the next month, then 3% the succeeding month. It is not the amount, it is the principle that you are saving something from your monthly earnings. This would also build your self-discipline, as nobody has become a millionaire by slacking off.
   
7. Take it slow.
   Except for lottery winners, nobody has become a millionaire overnight.
   The key to earning a great wealth is to minimize your income while maximizing your assets. You can invest on hard-to-spend assets and create a non-taxable wealth. Invest wisely and you will develop a habit of not buying or investing on anything through sheer impulse.
   
8. Pay your taxes.
   So you are already halfway to becoming a millionaire. The rule is to not pay more than what you owe in taxes. Follow the percentages that the law requires.It is better to have a financial consultant if you are already earning a lot, since there is such a thing as paying too much tax.You should learn to invest on non-taxable items and use the law of taxes to your advantage by managing your finances well.
   
9. Learn the in's and out's of investment.
   It is anybody's ball game out there. The one who makes wise investments earn the most.Try not to fall for those get-rich-quick schemes. They are never reliable. Do your research, because there are courses that you can take about investing stocks, real estate and properties. Make your money grow, do not let the money grow on you.
   
10. Share what you have.
    Money attracts more power than you would know what to do with. Once you have earned your first million, the second and the third is easier to come.Just make sure that you have the right attitude. It would not hurt to share some to charity and an organization that you feel strongly about.
    
    Finally, you cannot take your riches with you to the grave, so earn more and enjoy the process of making millions for your family.

How to Create Wealth?

Act, Think, and Create Wealth the Way the Wealthy People Do
I wanted to create a blog that can inspire others to act, think, and create wealth the way the wealthy do. However, I don't make millionaires. I just want to others to be motivated to do what wealthy do, so they can get rich, stay rich, and enjoy being rich as well.

Being said that though, no one can make people motivated. It comes from within and people have to commit themselves to stimulate to action.

As Loral Langemeier once said, ''Getting started just takes getting started..." Being rich is not an accident. Rich people got there because they created their wealth. You can create your wealth too by generating cash through your income and assets. Even if you have a great deal of debt, once you know how to set your mind in motion, you can be on your way to having everything you ever wanted. By understanding the mind set of the wealty people how they make money, you can too.

Unfortunately, many people think they can't have a lot of money unless they win the lottery. The fact is that you can start from where you are now and create your own wealth by:

• Using every tool you possess to make a lot of money.
• Taking control of your money that makes stress and risk out of your life.
• Eliminating debt while you create a stream of cash.
• Using your earnings to cash-producing investments.
• Accessing the information and opportunities that are known to small number of wealthy people.
• Joining a network of wealth creators.

Are you ready to start a new life of financial freedom?

Truth About Tax Cuts on Rich

Do rich people pay less taxes than poor people?
Financial freedom comes from hard work and persistence. Getting rich is possible here in America because we have free competition and many opportunites. Anyone can make one's dream come true if he or she has the right idea or product unlike other countries.

Recently, being rich has been demonized by many people particularly by democrates. We hear over and over the misconception about tax cuts that are only for riches. Even though, it's far from the truth but it works for democrates in stirring up the class warfare.

Government welfare program doesn't do any good to anyone.
Barack Obama has been running based on his entitlement programs. He advocates a variety of welfare programs which are not realistic and will bring about socialistic society. The United States of America is not found on that philosophy. We have seen most governement controled programs have failed one after another over the years.

His entitlement philosophy will dominate on his policy and income redistribution will hurt small businesses and entraprenuers who work hard to build their wealth and financial freedom by taxing tham arms and legs for his welfare programs.

Truth about tax cuts
Pass the Advil on taxes
by Larry Elder

The Associated Press ran a rare article explaining exactly who pays the federal income taxes. They state that the top 5 percent of income earners pay more than 55 percent of the total federal income taxes. (To be eligible for the top 5 percent, one must have an annual income above $120,846.) For people who believe the "rich" hire fancy accountants and lawyers to avoid paying taxes, this news comes as quite a shock.

Three years ago, Investor's Business Daily ran a similar article about the top 10 percent of taxpayers - those earning above $74,981 - who received 41.6 percent of the nation's income and paid 62.4 percent of the taxes, thus paying a tax share 50 percent greater than their income share.

Do people know the top 10 percent pay more than 62 percent of the federal income taxes? Three years ago, I put this question to my radio listeners.

Here's what they said: "The top wage earners, what they pay in taxes … is only about 3 percent." "I'm gonna say the top 10 percent pay between 2 and 4 percent." "I would say 2 to 3 percent." "I would say 1 percent."

The Associated Press also noted that the top 1 percent of wage earners pay over one-third of the federal income taxes, while taking in 19 percent of the nation's income. To qualify for the 1 percent, one must make a minimum of $293,415. What do people generally think qualifies one for admission into the top 1 percent? Again, three years ago, I posed the question to my radio listeners:

How much must one make in order to qualify for "the rich," the top 1 percent?

Here's what they said: "Probably $1-$2 million." "At a minimum, I would say $800,000." "$100 million, around there." "Let's just give it $25 million." "Somewhere in the neighborhood of $400-500 million a year."

Wrong. Really wrong.

Why the ignorance?

In his book, Bias: A CBS Insider Exposes How the Media Distort the News, Bernard Goldberg explains that mainstream media find certain issues of interest while ignoring others. When, for example, negative studies on day care appeared, Goldberg wrote that these studies made uncomfortable the male and female journalists who placed their kids in day care centers.

"On network TV," wrote Goldberg, "given the prevailing sensibilities that reign there, voices that argue for policies that would make it easier for moms to drop their kids off at day care are considered thoughtful, compassionate and reasonable. But voices that argue for less day care, because day care is bad for kids - frankly, I don't think the media elites even know such voices exist."

Similarly, many members of the mainstream media seem indifferent to or actually approve of the disproportionate percentage of federal income taxes paid by "the rich." Many go into journalism to right the wrongs, believing the rich get richer, the poor get poorer, and that the rich "fail to pay their fair share of taxes."

Perhaps this explains why print and television newspeople rarely refer to taxpayer or taxpayer dollars and instead use terms like "federal expenditures," "federal dollars," "federal outlays," "government aid," "government investments" or "federal grant." It is, of course, our money, but the lexicon used by mainstream media suggests otherwise.

Congressman Brad Sherman, D-Calif., in a recent mailer to his constituents, asks the following question:

I strongly believe that the federal government should spend more money on which of these? (Check those that you feel strongly about):

a. Federal aid to public schools
b. Provide a pharmaceutical benefit under Medicare
c. Environmental protection
d. National defense
e. Tax cuts for middle-class families
f. Homeland security
g. Transportation
h. Consumer protection
i. Don't spend - pay off the national debt

Note e: "Tax cuts for middle-class families"! How does a middle-class tax cut become something "government should spend more money on"? Only on the Potomac does a return of taxpayers' money become a federal spending program.
This brings us to Sen. Hillary Rodham Clinton. The National Taxpayers Union said that Clinton voted for more spending bills than did any of her 99 other colleagues. In fact, according to the NTU, Clinton set a record for the lowest score (voting for more spending measures) than any other freshman senator in the some 25 years they've tracked this. The Los Angeles Times once described House Majority Leader Dick Armey, based on his voting record, as a "hardline conservative." Will the media, based on Clinton's voting record, call her a "hardline liberal," or an "extremist" or "leftist"? Don't hold your breath.

Quite simply, we are overtaxed Americans. According to the Tax Foundation, Tax Freedom Day is now April 27, 2002. But don't expect much relief soon. The American Enterprise Institute's Kevin Hassett chastises both parties for their spending addictions. "It is really obvious," said Hassett, "that when there is money around, they will spend it, even if they are Republicans."

JWR contributor Larry Elder is the author of the newly released, The Ten Things You Can't Say in America. (Proceeds from sales help fund JWR) Let him know what you think of his column by clicking here.

How to Get Rich with Day Trading?

We often hear that rich gets richer and poor gets poorer. It's very true particularly now. Warren Buffett, the richest man in the world said that the financial crisis were "far from over." We hear more pessimistic outlook for the future from media and financial advisors. However, Warren Buffett doesn't need any more money no matter what happens with our economy, he still stays rich and enjoys being rich.

How to get rich with day trading?
The question is, how an average joe with a little bit of money can invest profitably when uncertainty continues to overwhelm the market? According to Forbes, the Dow, the Nasdaq and the S&P are all down more than 14% so far. Even foreign market doesn't look great. The EAFE stock market index is down 16%, the SPDR S&P World Index is down 13% and even Japanese market is down over the U.S. credit crisis.

However, there is a better way to approach the market.

Exchange Traded Funds or ETFs
According to Carl Delfeld, the managing director of the global asset management firm, ETFs are cheaper, more liquid and more tax efficient than mutual funds. There are hundreds of them and trading them is a snap with any discount broker.

Carl believes in taking a global perspective and using ETFs as a core investment tool. He has recently been investing in beaten down overseas markets that he says are just beginning to turn around. Markets such as Hong Kong, Brazil, Japan and even Ireland, which is currently one of the most inexpensive markets in the world.

There are many opportunities in other countries of the world. Carl likes France (EWQ) which is starting to go through its own "Reagan Revolution" under President Sarkozy. In addition, he says the Netherlands (EWN) is dirt cheap and is trading at just six times earnings due to its heavy exposure to the financial sector. Here in the U.S., there are sectors where Carl says ETFs have huge opportunities, such as in Healthcare and Financials.

7 ways you can profit from ETFs
1. ETFs are a tax-advantaged investment: you are not tagged with the big capital gains distributions when your fellow investors sell shares, because the underlying stocks in the ETF are traded, not sold. You don’t pay taxes until you sell your shares.

2. Annual management fees and expenses are extremely modest compared to most mutual funds. There are no 12-b-1 fees, sales loads, or exit charges. And no minimum investment required.

3. You can trade ETFs with stop-loss orders, sharply limiting your downside risk. To make sure you don’t pay more than you want for shares, you can use limit orders, just as you would for a stock.

4. You can purchase ETFs on margin, enabling you to leverage your investment for huge gains.

5. There are almost 800 ETFs trading on U.S. exchanges and 1,200 globally, enabling you to trade virtually any index in the world, from the NASDAQ and the Malaysian stock market, to microcap and Chinese stocks.

6. ETFs can be sold short, even during a market rout, to profit from falling stocks. Unlike individual stocks, ETFs are exempt from the uptick rule.

7. Unlike mutual funds, which trade at end-of-day prices, ETFs can be bought and sold instantaneously on major stock exchanges all day long, giving you tighter control of your entry and exit prices.

Here is S&P/Citigroup Data, 7/1/2008.

• Brazil: Price/cash flow 6.2%, Price/earnings 16.3%, ROE 14.4%
• India: Price/cash flow 11.94%, Price/earnings 16.2%, ROE 21.1%
• China: Price/cash flow 10.4%, Price/earnings 17.0%, ROE 16.1%
• Russia: Price/cash flow 13.0%, Price/earnings 14.0%, ROE 17.3%
• World: Price/cash flow 8.1%, Price/earnings 13.6%, ROE 14.7%

Among Carl's 2007 winning picks:
iShares MSCI Brazil (EWZ), up 75%
Indonesia Fund (IF), up 51%
iShares MSCI Hong Kong (EWH), up 37%
iShares MSCI Germany (EWG), up 33%

Here is Carl's advice.

It's to be careful! You can't just invest blinldly-even in thriving markets. You have to do a rigorous valuation of these countries, know ehich are best positioned, understand where the momentum is and make sure you buy at the best entry point.

It's also important to know the politics of the countries you invest in and where the big global fund managers are placingtheir bets. What will be the catalyst to drive an ETF and what are the prospects for a country's currency?

Don't make the mistake of turning to actively managed mutual funds either. They charge high fees because they spend an enormous amount of money on stock research.

By comparison, ETFs, like index mutual funds, can keep costs low because they typically track market benchmarks.

Here are his books on global ETF investing:

From Homeless Drug User to Millionaire

As a teen, Bob Williamson 'got all hung up in drugs and all that nonsense.' Decades of hard work later, his company has 173 employees and sales of $26 million a year.

When Bob Williamson left home at 17, he lived on the streets and did time for heroin possession. But he pulled himself together, got a job and eventually began his own business as a manufacturer of art supplies.

In 1993, Williamson started a company to develop software for cafeterias. Horizon Software International today supplies more than 15,000 schools, colleges and universities, and has annual sales of $26 million. Meal payments are made online, and parents can monitor what their kids eat at school.

Horizon, based in Atlanta, also sells to hospitals, retirement communities, big corporations and, soon, U.S. military bases around the globe -- "wherever," Williamson says, "large numbers of people need to be fed."

Williamson, 61, recently told his story to Inc.com's Andrew Park:

My childhood was tough. My father was in the Air Force. We moved around a lot. When I graduated from high school, I got all hung up in drugs and all that nonsense. I slept on the side of the road; I stayed in missions; I didn't have anything to eat. I fought a lot. I was in jail lots and lots of times.

I had been told all my life that I was worthless and would never amount to anything. I hitchhiked from New Orleans to Atlanta. I had only one change of clothes, and I didn't know anybody. My first job was cleaning mortar off bricks with a hatchet for $15 a day. Not long after that, I had a head-on collision and very nearly was killed. While I was in the hospital I read the Bible and became a Christian. After that I met my wife. We've been married 37 years.

I went to work for a paint company called Glidden. I had the worst job in the company: I was in charge of the label room, a caged-in area in the basement. But I was promoted eight times in two years to the point where I was managing special projects. I knew a lot of the chemists and taught myself about the chemistry of paint. In my spare time, I was a wildlife artist. There wasn't a good airbrush paint on the market. Everybody was using automotive lacquers. I spent about two years developing one for myself. I'd go to an art show and take my entire inventory. People lined up out of the door. Within about six months, I had distributors and customers all over the country.

I started Wildlife Artist Supply in 1977. I went from my basement to my garage to a little building. Then I went to a 50,000-square-foot warehouse. And I didn't just sell paint. We had a thick catalog, 6,000 or 7,000 items for artists, primarily mail order. It was everything you could imagine: brushes, compressors, clay. I started a magazine to teach people how to do wildlife art. We also founded the World Taxidermy Championships.

In 1988, I made a deal to take the company public. We were going to develop my business into a company like L.L. Bean. My customers were hard-core sportsmen. We were selling wildlife art supplies, so we could have just as easily sold them hunting and fishing stuff.

The next day, my controller turned in his notice. And then a whole bunch of other people quit. I discovered that all of our financial records had been destroyed, and we were $1 million in debt and $278,000 overdrawn at the bank, and my inventory was decimated. It was like a nightmare. I spent two years trying to make him pay. To this day, there's never been anybody but a Williamson reconciling our bank accounts.

There are only so many artists in the world. I wanted to get into something that didn't have any limits. My sons were very gifted in computer technology, and they wanted to start a software company. I had a couple of programmers who worked for me. We had written all this software. The best was our warehouse and distribution package. I had been using it for years in my own stuff. We decided to try selling it. I thought it would be like the paint: I'd just go out there and introduce myself, distributors would pick it up, and I'd be home free. Well, I had a rude awakening. When those big boys are in there, they just stomp you. I realized I had to have a niche.

A rep who worked for me also sold systems to school lunchrooms. I went with him on one of his calls and found out that in the schools there wasn't a system like ours, and there was a tremendous need for it. So I modified my warehouse and distribution system so it would work in cafeterias. The market was too small to attract those big guys, but it was big enough for me. There are 14,000 districts, 97,000 schools. It was a really big opportunity. It seemed unlimited. Everybody's got to eat.

I hired salespeople, but they couldn't sell anything. I told my wife, "I might just do it myself." I had always detested sales and salespeople. But I found out that's what I'm really good at. I went in and told food-service directors how they could save money. They were doing everything manually, and I showed them all the things that our software could do. Within two weeks I had my first order. Then I went to another one, and I went to another one, and pretty soon I had all of Georgia. So I became our chief salesperson. You wouldn't believe how I could sell. I could sell firewood in hell.

It wasn't like I was real flush with cash. Pretty much all my career I was undercapitalized. I borrowed on my home equity and loaded up my credit cards. We started with three or four people, in 1993, and each year we would either double or triple in size. Now we have 173 employees and sales of $26 million.

We ended up developing an A-to-Z software system for managing school food services: warehousing and tracking inventory and sales. For a long time I didn't have any competition. I started looking at other markets. We developed software for colleges and universities and then hospitals and senior living communities. Whoever feeds a lot of people, that's who we go to. We have more than 15,000 installations.

In 2005, we got a $10 million deal with the U.S. military. I worked five years on that deal. Our technology will be in every dining facility worldwide for the Army, Navy, Air Force and Marine Corps. Every land base, ship, submarine and remote battlefield.

It's my goal to get junk food out of the schools. Oranges instead of Snickers bars. We've developed technology so kids can buy healthful items from vending machines on their prepaid accounts. And we have software so parents can go online and view what their kids ate that day. I want to help kids make the right nutritional choices. We've got all this technology and all these schools, and we ought to be able to have an impact.

Article By Inc.com

How to Become a Millionaire?

12 Steps to become a millionaire without owning the company or be a CEO.
By Kiplinger's Personal Finance Magazine

A number of the people profiled in "Millionaires tell how they did it" made their millions as entrepreneurs. But working for the Man doesn't mean you have to be a wage slave or resort to buying lottery tickets to strike it rich. The trick is to maximize your income on the job (and know when to move on), make the most of your employee benefits and tax breaks and use that extra money to start investing.

1. Keep your eyes peeled for better ways to do your job. Streamline a procedure, shave costs, create a new profit center, become an expert on a specific topic, volunteer for a company committee -- anything that will make you stand out as a prime candidate for a promotion or a pay boost.

2. Don't be afraid to negotiate. In a study of master's degree graduates from her university, Carnegie Mellon economics professor Linda Babcock found that those who negotiated their first salary boosted their pay by 7.4% compared with those who didn't bargain.

3. Get your ducks in a row and your numbers on paper. If possible, quantify how much your efforts add to the company's bottom line. If that's not feasible, spotlight your value with comparable salaries for workers in your position from a Web site, such as Salary.com, or from a professional association.

4. Plot your strategy when it's time to move on. Create a professional-looking page on MySpace that tells prospective employers why you're an exceptional candidate, recommends John Challenger of the outplacement firm Challenger, Gray & Christmas. And don't neglect more conventional networking: Join a professional association or show up at school reunions toting business cards.

Milk your benefits
5. Contribute as much as you can to your 401(k) and other tax-deferred retirement plans. You'll not only build a bigger nest egg, but you'll also cut your tax bill. In the 25% federal tax bracket, every $1,000 you contribute to a 401(k) trims your taxes by $250. And you'll save on state income taxes, too.

6. Flex your tax-saving muscle. Contribute pretax dollars to a flexible spending account to pay for dependent care or out-of-pocket medical expenses. If you set aside $1,500 per year and you're in the 25% bracket, avoiding federal income and Social Security taxes means Uncle Sam will subsidize almost $500 of your expenses.

7. Review your tax withholding. If you're expecting a refund this spring, you're having too much tax withheld from your paycheck -- and making an interest-free loan to Uncle Sam. That's no way to become a millionaire. Put more money in your pocket by using Kiplinger's withholding calculator and then filling out a new Form W-4.

8. Stash savings in a Roth IRA if you're eligible. Withdrawals in retirement, including decades of compounded earnings, will be tax-free. This year, income-eligibility limits for a Roth increase to $114,000 for individuals and $166,000 for married couples.

Invest like crazy
9. Don't delay. The quicker you get a jump on putting money aside, the easier it will be to stuff a seven-figure cushion. If you start at age 25, for example, investing $286 per month will get you $1 million by age 65, assuming you earn 8% annually.

10. Invest automatically, either through your employer's retirement plan or by setting up a regular deposit to a mutual fund or broker. You'll never miss the money, and you'll avoid two big mistakes: buying too much when stock prices are high and not buying at all when prices fall.

11. Watch for fund fees. The more you pay, the tougher it is to earn an above-average return. The typical hedge fund, for example, takes 20% of any gains, a huge hurdle to overcome. A better bet: no-load mutual funds with expense ratios of 1% or less. If you trade individual stocks, watch those commissions.

12. Keep it simple. Be wary of get-rich-quick schemes or sales pitches for complex investments, such as oil-and-gas partnerships, that trade on the millionaire cachet to lure investors into buying high-fee products they don't understand. Most millionaire households accumulate their wealth over the long term by sticking to a regular investing plan in a balanced portfolio.

Published Feb. 27, 2007

Recommanded Reading:

The New Color of Success:
The twenty Young Black Millionaires Tell You How They're Making it.

22 Millionaires Tell "How I Made A Million"