Lots of people have contacted me and pledged to follow along. I'm sorry for folks in other countries. I am not sure which brokerage accounts and opportunities are available to you. You might have to use a bank to store your money. The goals will still be the same: Develop some good habits around money and sock away some extra savings.
Today's SOP Video is about the Y $10K program. Please give it a look and share it with a friend.
(My YouTube channel is http://www.youtube.com/smallbizthoughts.)
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One question I got was, "Why just $10,000 and not a much larger number?" The answer is: This program is for people who have not been able to easily set aside $10K, let alone a much larger number.
The $10K really represents a push to develop good habits around money. Some people are very good about setting aside money. Others save and spend, save and spend.
Once you get $10K in the bank (or wherever), then it's much easier to double that and then double again and again. No matter where you are, it is possible to double your savings and double your investments.
Back when I first set the goal of having a net worth of one million dollars, I used a very simple calculation to motivate myself: How many times do I need to double my investments to reach $1M? Let's look at that question with $10,000.
$10,000 x 2 = $20,000
$20,000 x 2 = $40,000
$40,000 x 2 = $80,000
$80,000 x 2 = $160,000
$160,000 x 2 = $320,000
$320,000 x 2 = $640,000
$640,000 x 2 = $1,280,000
The answer is that I have to double my net worth less than seven times.
Now let's see how this works in the "real" world. Let's say you have $10K in savings plus $25K in a retirement program (IRA, 401k, etc.), and $50K equity in your house. So in very rough numbers, you have a net worth of $85,000 - assuming you have no debt. Now let's do the calculation starting at $85K:
$85,000 x 2 = $170,000
$170,000 x 2 = $340,000
$340,000 x 2 = $680,000
$680,000 x 2 = $1,360,000
You will have to double your investment less than four times exceed $1 million.
The key to remember is this: Anything you've done once, you can do again. So if you socked away $10,000, you can save another $10,000. If you've save $100,000, you can save another $100,000.
1) Watch that video
2) Read that blog post
3) Send me an email and pledge to follow along
Note: Your first step to putting money in investments is in that first blog post. Go do that. The next official Y$10K blog post will be Monday January 18th. Stay tuned.