Up to now you have been learning how to save money, something that saved me when I lost the means to pay for my vacation at the last minute. I ended up having enough cash to cover this expense. Something that I did not have before beginning this step by step process. Even better yet, I spent that money and replaced that money in less than a week after the vacation. In fact I was able to replace it and add an extra $500. So now I have more than I began with. When you do that it is an awesome feeling. The great part is that it is repeatable. Now what we need to focus on is something that will give us a paycheck while we are on vacation, and I am not talking about the hours of vacation time that you cash in on from your employer. Though you must use all of your resources.
Obviously the millionaires and billionaires did not get that way from pinching pennies and compounding the change that they find under the couch cushions. The whole thing comes together when you are able to take that money that you have been saving, spend a little of it and get a lot more in return.
I have been studying the techniques of the rich for quite some time now. There seams to be a common theme. You cannot make money if you are not willing to spend money. That is where the investment part comes in. You must invest in yourself and how much you invest is determined by how much you think that you are worth.
The ideas that I am have presented are working for you as if you invested one penny every day into your savings account. If you did not spend any money you would at the end of the year have $3.65 in the account, not taking into account the interest earned which would be minimal and insignificant. Now lets say that you started with that same penny and invested it into something that will double your money every day. So, as an example:
- Day 1: you invest $.01 and never invest any more money. but it doubles every day. What does day two look like.
- Day 2: $.01x2=$0.02. Let's keep this going for a few days.
- Day 3: $.02x2=$0.04
- Day 4: $.04x2=$0.08
- Day 5: $.08x2=$0.16
- Day 6: $.16x2=$0.32
- Day 7: $.32x2=$0.64
- Day 8: $.64x2=$1.28
- Day 9: $1.28x2=$2.56
- Day 10: $2.56x2=$5.12
Wait a minute! In just 10 days I have made more money than I did by saving a penny every day for a year. In fact I made $1.47 more. Now what would it be like if I continued it on for even just one month? Well let me show you. So $.01 invested on day one turns into $5,368,709.12. Wow! That is called a return on your investment that comes to a 536,870,912% increase. Impossible? Practically speaking...Yes. The lesson hear is you need to strive to have a system that can compound you money 100% over a specific period of time. We could have looked at the number of days as months, or even years. In one year do you think that you could double the initial investment of one penny? What about one month?
Most people have no problem giving their money away to an investor to invest in a retirement plan. If people invest in the stock market most people rely on a broker or try to find the right picks for themselves, without the proper research. Do you know who you are giving your money to? Do you know the financials behind the company that you are investing in? Most people would say no. They see a line on a chart that is going in the positive direction and say that this is must be the next big thing. They might hear about a hot stock that everyone is talking about. Well guess what. For the best returns on your investment you are already to late. If everyone is talking about it your most likely to late.
What about that broker? Do you know anything about his investment history? What rate of returns are they typically seeing? What are their fees? Do you know what the hidden fees are? What is the brokers or their firms investment philosophy? If you cannot answer these question how do you know that you are getting the best investment that your money can buy?
I am currently invested in the stock market. I work my own numbers and understand that there are up days and down days. I don't panic when I see that I have lost money. That is a part of the game. You will lose money the majority of the time. Even the professional investors understand this? They are just better informed to know where the trends are and can give you better odds. They understand that the average investor will lose money. Most of them don't care because if you lose money, they still get paid.
So I have a savings account working for me and a stock account working for me. Next up is to invest in a income generating business. I have been studying various business ideas and have put together various ideas that I believe that will work for me. I have been able to identify several up and coming industries and several opportunities that have been around that have been proven to provide a great rate of return.
Over the next days, weeks and months I will be implementing my financial visions to give my income stream a boost. I will be inviting you along for the ride. In the mean time start educating yourself by reading books, watching videos and doing research on different ideas that you might have. Next stop, teaching you how to take $1.00 and increasing it by 800%...theoretically. I have done the research and my money is working for me. What's your money doing for you?
Until next time, Keep your head up and keep looking for the next great opportunity. Have a wonderful day.
Everything that I write are the results of my own research. I strive to provide the most accurate information possible and cannot be responsible for any errors. I am not an accountant or a fiduciary. Before investing or using any of my ideas it is advisable to consult a financial professional. I am not responsible for any financial loss that might occur through the use of my ideas. Do your own research and come up with your own answers. The examples that I provide are just that, examples and are meant only for the purpose of teaching cash flow and ideas for possible investments.