You won't be a millionaire saving $5 per day

Key Takeaways

let's just face the facts you will not become a millionaire on $5 a day no matter what anybody tells you so here's how the teaching goes that we see all over the Internet you're 20 years old and you save $5 a day until you're 65 years old and that gives you 45 years to save now how much are you saving you're saving five dollars a day so that's five dollars times 30 and that's $150 a month so now we take that $150 a month and we get nine percent interest on our investment I'm just guessing we'll see something do better some do worse but let's say you get 9% per year on your investment how much does that equal after 45 years well it equals 1 million thirty one thousand seven hundred forty two dollars BAM and that is the magic of compound interest this is what it actually looks like you start earning hardly anything every year you're just putting in a hundred fifty dollars a month every year and it goes up but the compound interest it's nine percent times each year and when you're 65 you're just skyrocketing and you're making so much money that's the magic of compound interest and that's how mathematically five dollars a day will get you to becoming a millionaire if we follow all those assumptions but there are a lot of problems with them so let's jump back and talk about some of them there are a lot of problems with this formula but they can all be fixed and I'm 32 years old I'm a millionaire and I'll show you that it's really not that complicated but this will not get you there but Jim you're like here yeah are you already later okay the problem with this formula is Chris you know Chris earns 40 grand a year me and says his monthly pay is three thousand three hundred thirty and that's not that's not a gross salary that's his take-home 40,000 a year so this is jann take-home pay turns into this and so that's more like a fifty fifty five thousand dollar salary before taxes Chris is pretty frugal I mean he's got a mortgage or car payment just average kind of normal stuff um and he doesn't even have a cell phone and this only leaves him a hundred thirty three bucks a month leftover Jonny breaks his arm you got to go to the dentist anything happens and this dude's budget is broken I mean the chances of this guy ever become a millionaire are zero and this is less than that five dollars a day yep so half dollars a day is 150 a month he can't even do this it's not possible yep and and even if he even if he tried okay with with this budget that he has today he's gonna live on that and whatever happens he's gonna invest this hundred and thirty three dollars well what happens when ten years pass and this is now a hundred thousand dollars and he's like I have a hundred thousand dollars I'm gonna buy a house mm-hmm you know I'm gonna finally pay off that dang car that I've been paying for for the last 15 years it just takes incredible discipline if you're really scraping by to not only save that money but to watch it pile up and never once be tempted because if you're tempted once and you take out of it you're you're never gonna be starting over there worse yet by the time the dude is 70 a million dollars won't even be enough to retire on it's not a lot higher on today it'll be worth about half of what it is today because of associate yeah if you wait about thirty years even with the generous only two percent inflation rate it's worth about half so that would be like trying to retire today on about five hundred thousand dollars it's it's not gonna get you by I keep telling hearing people say this is the lesson they never taught us in high school they should have taught us the magic of compound interest and they should we believe in it big-time but not like this it just won't work in a practical sense but you can absolutely get there let's see Chris just made one right decision he made all of his other decisions wrong he got student loans he got a mortgage he had credit card debt he did tons of stupid stuff but he made one decision right when he was 20 years old he hustled when he was in college and instead of buying a stupid car he put it in an index fund if he starts at 20 then not 50 years later this was when he's about two three years 39 years later yeah when he's 59 he's already a millionaire and by the time he's 65 not 70 65 that's almost 2 million dollars in the bank absolutely and this is he didn't invest anything after that one smart decision that he made in college and chances are if he made that one smart decision in college and saw what it was gonna do he probably is gonna invest a little bit more of the course of his life the point is at some point you've got to get some gravy at some point you've got to have money to make an investment it's great to invest every month I invest every single month I save away and I do it it's smart to invest consistently long term we're not saying it's not it is but it makes this whole equation so much easier if at some point you can make some lump sums and have a little extra money to invest think about it Chris can't afford to go on a vacation if he invests he can't afford to fix a car you know anything that comes up he can't afford it if he wants to invest and that's why the Chris is always gonna poor Chris man we really reppin mister that's why Chris is always gonna be poor is because you know if he wants to take his family on vacation I mean what maybe he can find a way by not driving he saves on gas and maybe in six years he can have enough to send his family to Cancun that's few people have that kind of discipline to say for six years for one vacation so what's gonna happen credit card that sucker yeah and he's always going to be behind forever yeah so if you're Chris right now like what could you do to just hustle your way to just get something some kind of seed to get you going I mean if you had to you had to give ransom money to Horeb Somali pirates or something how could you come up with five thousand dollars and then go do it and once you have a little bit of seed money then you can use that money to turn into a more sustainable income that can supplement whatever you're doing it work so Chris has his job you know he's making a fairly average American salary and he's barely getting by well if he's got just a little bit of seed money then there's a lot that he could do with that money first of all but five thousand dollars he now has an emergency fund but it also gives him a few hundred bucks if he wants to take it to go start something heck yeah that's gonna give him a little bit more of his five thousand bucks by taking his lawn mower mowing for all his neighbors and then he says hey this is kind of cool what if I put this into a business and I buy a couple lawn mowers and I pay one dude to be mowing all summer long and I just have one employee and I still have my day job and I start this thing off on the side and you build it and you build it and you build it it's exactly what I did but I didn't buy lawn mower I bought this this exact camera awful picture by the way I bought this camera how many years ago was this I don't even remember but I bought this camera by selling everything in my garage I sold skis and a gun and just everything I could find in the garage was for sale and I bought this camera and that's where I started my business my business what I've done is I've been creating websites and blogs and YouTube channels and podcasts I own improve photography.com which is a huge photography site but it started when I invested a little bit of money in a camera to start a business and then I started sharing photography tips on my website and hundreds and thousands and then millions of people started coming to my website and I've learned so many tricks along the way about how to get that traffic to a website and then I'd sell online courses I have ads on my website and it's a generated and really incredible income to be able to surprise it to provide for my family over the years here's another example the Toma Bach camper oh yeah so this is a website that one year prior to this so it's a one year old site okay it is a website with at the time about 25 articles that were written on it okay very very basic website about campers about just the basics of owning a camper aren't you using the camper RVs that kind of stuff just writing really helpful useful con on a basic website and what happens is over time people start coming to the website to get the information that they're looking for about campers and about RVs and by you know recommending products to them you know we're able to generate an income of you know thirteen hundred dollars a month off of this website that is one of our smells this is a little say this is an improved this is a very much a niche website like I said only about 25 articles on the whole site okay and it's got a sustainable income over a thousand dollars a month and the cost to build this website a couple hundred bucks that income that 25 articles that's generating a thousand dollars a month completely changes Chris's story or at least it can as long as he uses it wisely this is now one thousand one hundred thirty three dollars a month and with that kind of money instead of five dollars a day I can invest 20 dollars a day if I want to and that turns into a million dollars a heck of a lot quicker than 50 years compound interest really is magic and you should be saving every single month but the point that we want to make is from a practical sense at some point the the most likely way for you to get there is to be able to take control of your income when you want to take your family on vacation you aren't tempted to pull out a credit card you say I'm gonna go bust my button I'm going to go in five thousand bucks when you want to be able to put twenty thousand dollars in there this is fun Ricky and I have this conversation every quarter every quarter we look at the business bank account we're like mm-hmm we got a little extra in there how much of a bonus do you want it's fun it's so cool but we work hard for that and it's not a get-rich-quick scheme at all it's it's hard work but we're doing it and it is working for us I don't care how you take control of your income if you're gonna cut lawns if you're gonna do something else similar to your day job become a plumber or an electrician you're gonna paint houses on the weekends whatever but you've got to find a way to be able to generate extra money when you need extra money and it makes everything so much easier if you want to do what we're doing we'll show you everything that we do in our business just go to income school calm and click on niche site school it will just give you our business model will share everything that we learned in creating many blogs that have been successful and how we get the traffic and how we monetize them if you don't want to even pay for a niche site school just find it out how to do it for free go to income school comm /nu we just walk you through exactly how to get started with the website you write that content monetize it there are so many ways to take control of your income it really doesn't matter which path you take but somehow in 2018 find a way to take control of what you got thanks everybody