Eight Steps to Seven Figures: How You Can Become Wealthy Too Book

We know some things about the millionaire next door--what kind of car he drives, how big his house is--but we don't know so much about how he built his wealth. In Eight Steps to Seven Figures, Carlson attempts to fill in the blanks by telling us the stories of 170 regular, middle-class folks who made millions by investing in the stock market. The steps he outlines are so simple that most people interested in investing already know them: Invest regularly, hang onto your investments for a long time (75 percent of the millionaires he surveyed held each investment an average of five years); use the tax code to your advantage by fully funding 401(k) plans and Roth IRAs. Step 4, "Swing for Singles," suggests investing in brand-name, blue-chip stocks when they look underpriced--something anyone who's ever heard of Warren Buffett can tell you. A couple other steps aren't quite so obvious. For example, Step 3 dictates that you buy only stocks and stock funds and forget about asset allocation. ("You get rich buying stocks. You stay rich buying bonds.") Step 8, "Limit Shocks to Your Finances," counsels you to keep your day job. (No day traders or Internet jackpoteers in this group.) This material could be dull as dirt, but Carlson keeps it lively. He reminds investors not to overestimate their genius during a bull market. He suggests that selling too late is better than selling too early, if you buy growth stocks and avoid cyclicals. "If you buy right, selling late may mean making 'only' a 300 percent profit instead of a 400 percent profit," he writes. What's most fun, though, is following the investment careers--the big hits and big mistakes--of the 170 investors. You read stories of selling Microsoft too soon, of not buying enough Dell when it was selling for $5 a share. But these people all ended up millionaires, and when you put this book down, you will almost certainly feel that you can, and probably should, be a member of their club. --Lou SchulerRead More