Reading time: 1 minute 30 seconds
You may have wondered if the chart in my award winning, best-selling book on page 141 was realistic.
That chart shows that someone who pays themselves first just $10 per day can create an investment portfolio of over $1 million over 30 years if they earn 12% on that investment.
People will say to me, “The bank doesn’t pay 12%.” They ask, “Where can I earn 12% interest on my money?”
You never heard me say put that money in the bank. And I never said it was 12% interest.
There is a big difference between earnings and interest.
Interest is what someone, or a bank, pays to use your money. If you purchase a municipal or corporate bond, the municipality or company will pay you interest.
If you invest that money wisely (putting it into a savings account is not investing it), you can earn 12% when you look at both the income paid on your investment plus the capital growth.
I recently received this annual report on a mutual fund I have had for many years.
This was an easy way for me to invest until I learned how to do better on my own.
It showed that over the life of the fund, which started in 1934, it earned a total return of 12.01% over that 86 year time span.
I am not suggesting you invest in stock, bonds, mutual funds or real estate. All I am saying is that you can earn 12%, and small investments ($10/day) over long periods of time create large results.
By the way, the total deposits over 30 years to produce that $1,048,500 portfolio is only $108,000. That 10 fold difference over what you put in was produced by the earnings.
This is more shocking: Someone who earns only $3000 per month can contribute 10% of what they earn each month ($10/day) and end up with a portfolio that could generate an annual income of $125,820 per year. This is almost 3.5 times what the person was earning from work.
What’s the point?
There are several:
- Start now.
- Small amounts of money over time can produce big results.
- You can earn 12% per year on your investments.
If you disagree, please let me know.
To Your Prosperity,
Rennie
