Financial Freedom on a Dollar a Day Part 2 of 2

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Last post I discussed the importance of mind-set when it comes to money. This is just personal finance basics. Rich people think about money differently than most people. They view 1 dollar as a seed to create more money rather than just a Lonnie or a dollar bill. To recall, it takes 468 years to turn 1 dollar into a million at 3%. Well, like most people I do not have 468 years. Lets now look at some ways to turbo-charge the time it takes to get to 1 million dollars.

OK, let’s try and make this a little less depressing. Even though a million dollars may sound like a lot of money, it actually is not that hard to get to (depending on your age). Figure 1.2 shows how 1 dollar a day could turn into a million.

Figure 1.2 – How 1 Dollar a Day Turns Into 1 Million

3%	147
5%	100
10%	56
15%	40
20%	32

Source: Multiple Streams of Income p.3

How about that! A dollar a day turns into a million dollars in the span of a normal lifetime. The average college graduate would only need to save a dollar a day to become a millionaire at retirement. I know what you might be thinking. Well, that’s all good and well but where do I get a 15 or 20 percent rate of return. The banks are only giving 3%. I will cover investment tips and strategies in future blog posts showing you how to get double-digit, triple-digit and even infinite returns on your money. For now lets stick to just basic understanding of money.

It is so simple to become a millionaire. Just like it is simple to loose weight: all you have to do is burn more than you eat. Well with money all you have to do is re-direct a few miss-spent dollars to investments. The following chart (figure 1.3 shows how long different amounts of money and returns take to turn into a million dollars)

Figure 1.3 – How Many Years It Takes For Different Amounts of Money Turn Into a Million Dollars

Savings/Day	3%	5%	10%	15%	20%
$1	147	99	56	40	32
$2	124	85	49	36	28
$3	112	77	45	33	26
$4	102	71	42	31	25
$5	95	67	40	30	24
$6	90	63	38	28	22
$7	85	61	3	27	22
$8	81	58	36	26	21
$9	77	56	35	26	21
$10	74	54	34	25	20

Source: Multiple Streams of Income p.4

You can see by the chart how important it is to start early. I know it might be difficult but “the only place that success comes before work is in the dictionary”, Vidal Sassoon. Take time to study these charts and find out where you are right now and where you would like to go. Then you can say “I know how to manage my money”. Read other blog posts to get some more ideas of how you can either save more or increase you rate of return. Remember, you instantly become more rich the sooner you save.