Have you thought about how to make money work for you?
If investing is such a simple thing, why are people still so poor? You would think it would be easier, save a few thousand dollars a month, invest them at a compound interest rate, make yourself a financial «safety cushion,» and that’s it. In a few years you’ll be rich.
But, if it’s that simple, why are so few people on the planet really rich? After all, 9 out of 10 people living on this planet are people who will never have a passive income. So what to do about this huge contradiction.
On the one hand, everything is so simple and clear and all the steps are told on YouTube, but on the other hand, there are obstacles that prevent people from starting to earn their passive income and make them work for a salary of 30, 50, 100 thousand dollars a month, but there is little left of that salary. And after a few years or a few decades a person realizes that they have nothing left. So how do you create a passive income with a 99% probability that it will work out?
Let’s start by clarifying some concepts. What is compound interest? Let’s say you are a farmer. Now, by the way, the state has a program to support farmers and there are good subsidies for this. And just recently a business plan was published on the website, for which money and grants are allocated. It is a plan to create an apple orchard. An apple orchard is somewhat similar to a compound interest idea. You buy land and plant apple trees on that land.
You invest in apple trees for a long time and you put in 4 million and you get an average of 40 million on the way out. This metaphor of apple trees allows you to understand how compound interest works. The apple orchard you planted begins to pay dividends (interest). You collect that interest, sell it, and with that money you can plant even more apples.
Accordingly, more apple trees will give even more interest in the form of apples. From those apples you can make apple cider vinegar, apple juice, apple chips, that is, make some derivatives, which you can sell again and plant more apple trees. And the more apple trees there are, the more money you will make. But as a rule, metaphorically speaking, people don’t plant apple trees, and even if they do, they eat all the fruit from those apple trees and don’t keep planting new ones.
If you draw a parallel with real life, let’s say you have a million dollars and you put it in the bank, that million gave interest of 150,000, and you ate it. I mean, that’s not how it works. A compound interest is when you don’t get into your apple orchard for a while and you start planting new trees.
Creating assets. Those assets produce fruit (rental income, dividend yields, interest on deposits, etc.). And you can reinvest these fruits, that is, invest them to buy new assets. Compound interest is a prerequisite for creating passive income. If you do not use the power of compound interest with maximum efficiency, then it is simply impossible to achieve any kind of intelligible wealth during a human lifetime. For example, if you invest one thousand dollars at 15 percent per annum with an accrual every month, in ten years you will get the sum of 974 thousand dollars.
That is investing one thousand dollars a week you can get almost a million after ten years. Already not bad. And what happens to that amount if you invest it for 30 years? Will it be three times as much? Will it be a million in ten years, and will it be 30 million in 30 years? Of course not. The compound interest arc shows us that in thirty years the amount of interest-adjusted savings will be $20 million 867,000.
And yet we invested only 1 million 440 thousand of our own money. If you calculate it, it’s about 15-16 times more than the amount invested during the whole period. You don’t have to give that million away today. You just need to set aside one thousand rubles per week at 15 percent ready, and at the expense of compound interest, you will be able to create a capital of 21 million over 30 years. What’s not to you a personal retirement system?
Before you find excuses why you won’t do it, such as «it’s not good for me because it’s complicated» or «it’s not reliable because the government will take all the money away anyway» etc., answer one question: «What will you do instead?»
After all, it is the compound interest strategy that has made the largest number of poor people on the planet rich. Even American and European housewives and many other people on the planet with minimal financial education, who are not part of the world’s elite, with no higher education, but by figuring out how the world of rich people and the compound interest system works, have been able to create a fortune simply using the so-called math of a millionaire.
Perhaps you have a different plan? For example, that you have to work hard and persevere by saving your accumulated money. But what about inflation? It will mercilessly wipe out all your savings. Or you want to invest in another pyramid, a HYIP or some project that promises you fabulous interest. And what are the chances to lose your money investing in one project, promising a huge interest?
In our strategy, we invest in 70-80 of the largest companies in the world that have been paying dividends for the past 35 years, and they pay them in dollars. The mathematics of a millionaire sounds like this: you don’t add up your savings, you multiply them. The poor man’s math says that if I want to accumulate a million dollars, I need to open a bank account and save 100 thousand times.
Ten times 100 thousand and I accumulate a million. The mathematics of the millionaire tells us to take the amount of one hundred thousand dollars, invest it at an interest rate with maximum reinvestment, and add deposits little by little so that this amount grows with compound interest.
In other words, the only way out of the «rat race», the situation where you are forced to go to work every day and work just for food, clothes, rent and repeat this cycle from month to month is to create an additional source of income. And already set aside 10 percent of your income, but at least $1,000 every week.
You can create a semi-automatic system that will do this work for you. This means that the money will be set aside automatically using a banking template every week, and you can invest that money in the assets of the biggest companies in the world. Such as Apple, Amazon, Google and many other companies even owning $1,000.
You can use special funds which allow you to do this, US Treasury bonds, Russian federal loan bonds. There are a huge number of tools that allow you to activate the mathematics of a millionaire, that is, the multiplication principle and of course, compound interest.
If you don’t take the time to grow and multiply your money, if you don’t study materials related to how to do it, if you don’t learn it and implement it after you learn it, then in 20-30 years you will have very tragic results.