Hey Young’un! You Want to Be a Millionaire?

OK, stupid question. Everyone wants to be a millionaire. But a better question is “Did you know it’s not that hard to become one?” Millennials have the unique opportunity to put their financial future on a course for success. For the most part, they are still young enough to benefit from a couple of decades of compound interest, and get their retirement established – and become millionaire’s by the time they retire.

Sorry, I’m not talking about get rich schemes or some weird trick that is going to make you a millionaire by sheer luck. I’m talking about a systematic and methodical approach to achieving millionaire status by the time you retire. Yes, that sounds boring, and it is, but stop and do something that almost no one ever does – seriously consider what you will do when you stop working. Will you even be able to stop working? If you don’t invest or start thinking about it now, then you’ll be in a world of hurt when you reach that pivotal point in your life. So please make that pivotal decision now, not thirty or forty years from now when it’s too late.

The Single Most Important Thing

The single, most critical aspect to becoming a millionaire before you retire is this – START EARLY (MEANING RIGHT NOW!). Let me share story with you that illustrates the power of time as it relates to money.

A man is offered $1 Million or a penny doubled every day for a month. It’s an easy choice, right? Wrong. Choosing the penny doubled every day nets you over $5 Million in a month’s time. This story illustrates the power of compound interest, and time and that the real gains happen at the end. For instance, in our penny example, halfway through the month, you still only have less than $165. Even until the 27th, you’re still far below the $1 Million mark. But the last three days make all the difference.

Let’s make a point by editing our example. Same offer, but the offer begins today, right now. You think about it for three days, then opt for the pennies. Guess what? You only get 27 days. Those three days you used to think about it are gone – never to return. So by waiting three days, you lost over $4.5 Million. That is what’s happening RIGHT NOW to your retirement fund if you aren’t investing it somewhere. You won’t get today back. Every day you don’t invest, you are limiting your retirement fund.

What Do I Do, Then?

Good question. There are many, many ways to invest – too many to enumerate here. However, there are many sites that have resources to help you to learn how to invest, how to manage your risk, and tax implications and more. Check out one specifically geared to Millennials. It’s called the Future Millionaire’s Blog. It is a new site but with relevant, timely articles that are easy to understand and fun to read. It’s perfect for you, even if you are investing small amounts of money. Remember the doubling-penny example? It can’t get any smaller than that, and look how that turned out. So don’t despair. Start now, start small. Just START. That’s the important thing.

Take Care Of What’s Important

Here at the Money Club, we always make a point to ensure that we are taking care of the important stuff, from small details to the big picture. Sometimes the small details can get overlooked and as a result, cause problems down the road. Sometimes the small details are of utmost importance, so be sure not to overlook something just because it seems trivial or unimportant. Verify the importance of every detail. On the other hand, some people get so wrapped up in the small details that they totally forget the big picture. For instance, the breadwinner that’s so focused on making sure he is providing for his family that he forgets to invest time into his most important investment – his children.

Sometimes the small details must be inspected thoroughly. A great example of this would be a tax return. Each line seems a minor detail, but if you’ve miscalculated or ignored just one line, it can throw off your entire return. Imagine going through a 3 year tax audit because you inadvertently skimmed over small (yet important) parts of your tax return. Our Lubbock computer repair company reminded us of an example of taking care of the small details. Setting up your computer with regular backups is a relatively minor task, that once set up, will continue to protect your important and sensitive data on your PC, but if you just gloss over it saying “I’ll get to it one of these days”, that day will eventually come, but you will have lost all of your important data.

The big picture is what motivates most successful people. You may call it the “big picture”, your “goal”, your “why”, or whatever pet name you like. It is what drives you to do what you do, whether it’s a future home, a successfully college-graduated child, or even just an expensive vacation. The big picture can be smaller – finishing a project or article, for instance. Sometimes the right decision is to take “imperfect action”. Prioritize what’s important and make progress on the actions that will best benefit you, and move you closer to your big picture. We’ve watched as an employee tried to micromanage her day down to the minute, and when the schedule invariably was altered, she was so intent on maintaining the schedule she had set, that it actually caused havoc on everyone else’s schedule. She didn’t realize how her focus on the small details of her schedule was impacting the big picture of the company’s mission/goal. I’m also reminded of one of our web content developers. He would review and revise his articles over and over again, because it didn’t seem “exactly right”. As a result, his articles were always late. The content of the articles didn’t vary much from his first draft to his final draft, so the extra time he took to make the article perfect was just wasted, because the message of the article didn’t change, just some minor wording.

Importance can’t be assigned to just small details, or just big picture tasks. Each person must designate importance in a manner that works for him. Deciding what’s important is not a difficult task. The difficulty comes in remembering what you’ve decided is important. The breadwinner we talked about before had already decided that his children were important, but he forgot to follow through with his decision, and began to focus on something other than what was of ultimate importance.

Using the Money Club To Raise Money or Pay Off Debt

There are two groups of individuals who benefit from the Money Club. These groups are the borrowers and the investors. We will discuss the first group in this post – the borrowers.

Borrowers use the Money Club for a variety of reasons. Some use the funds to start a business, others pay off high interest debt and others use it for unexpected emergencies. Because the Money Club eliminates the middleman, you are able to pay substantially less in interest than you would by borrowing from a bank, or getting a cash advance from your credit card. In fact, most people who use the Money Club wouldn’t be able to get a loan from a bank anyway.

One group of people that uses the Money Club quite effectively are Asians who have come from their home country to America. Quite often they come to America nearly penniless, having had to pay exorbitant fees to their home government to get approval to leave. But within months have enough money to open a salon or a washateria or gas station. A simple salon will require at a minimum $20,000 to open (or buy from a previous owner), and can exceed $250,000. How could a freshly arrived immigrant pull this off? Many of them use the power of the Money Club.

Would it be possible for a new immigrant who barely speaks English, has no credit history in the US, and has nearly no reported income to get a loan to open a nail salon or hair salon? Of course not, but the Money Club removes the impersonal gatekeeper, the bank, and allows a skilled, willing worker to receive investment to start his business without the need for collateral.

Nail technicians at Pro Nails Nail Salon in Tomball, TX indicated that if they were to open a salon one day, that they would use the Money Club to secure funding for there venture. The Money Club can work for anyone, from investor to borrower.

Who Benefits From The Money Club

If you’ve asked that question of your bank, you know the answer – the bank. That’s it, the bank wins. You get squat for your savings account. Virtually every investment has better returns than a savings account, from collecting comic books, to microfarms. It reminds me of the parable that Jesus told in the bible about the servants who were given a bag of gold by their master when he was going away for a while. The ‘loser’ was the one who buried the gold in the ground until the master returned. Well, today that loser would be the one who stored the gold in a savings account.

Banks take the phrase ‘low risk, low reward’ as their mantra apparently. If you have less than $100,000 in your bank account, then the amount is guaranteed by the FDIC, so in theory, you have no risk, hence the ‘no reward’. If you take inflation into account, you are actually losing money by leaving it in a savings account. When this article was written, the Bankrate.com national average was .1% APR. Not 1%, 0.1%. If you planned ahead for your retirement and think you’ve saved enough with $100,000 your interest on that money for a year, would be about $100. So, with the interest on $100,000 for an entire year, you and your spouse can go eat a nice dinner – ONCE. You may as well be burying your money in the back yard.

The Money Club Lets Everybody Benefit

With a Money Club, there is obviously more risk than a savings account at the bank. On the other hand, the risk is somewhat controllable by the members of the Money Club. Those who stand to gain the most from the Money Club, inherently take the greatest risk.

The ones who take the least risk pay the most in interest, but even they pay less in interest than they would with a credit card or personal loan.

The basic concept of the money club is that you take out the overpaid middleman – the bank. With the bank out of the way, investors can get much greater returns than can be earned from a bank, and borrowers can borrow at a better interest rate, and they can even set the rate themselves, to some extent!


In our next article, we’ll lay down the structure of the Money Club, and how to set one up.

Banks Are Robbing Your Family’s Future

What do most people think of when you mention their bank? Images of a friendly local teller, free hot coffee in the mornings, or their safety deposit boxes. We suggest that these images are just a front for a cold calculating money-making machine that couldn’t care less about the financial futures of your family, and would take every last dime you have for their own overflowing coffers if they could find a way to do it legally. Your bank isn’t doing you any favors, believe me. What’s wrong with my bank, you might ask. I’m glad you asked – let’s get down to the nitty gritty.

My Bank Is Just Holding My Money For Me

Is that what you think your bank is doing – just holding your money for you? Think again. They have taken your money, and are either paying you a miniscule .05% (if anything at all) on your money, and they’ve given it to someone else to borrow, probably at a rate between 5% and 29%. So already they are making money hand-over-fist just by lending out the money you gave them in good faith.

Of course you can get it back out, since banks are mostly insured by the government. The point we’re making here is that most people have this concept that the bank is doing you a favor, when in fact you’re doing them a favor.

Fees, Fees, Fees

Taking your money and giving it to someone else, without giving you a decent piece of the pie is not enough for them. They’ve come up with dozens (or hundreds) of ways to take more money from you. Let’s start with the minimum balance fee. If you aren’t important enough to them because you don’t have enough money, that’s OK, they’ll just charge you a fee for the honor of being able to store your money in their vault.

What about bounced checks. I understand that they have to charge you a fee when you bounce a check, but upwards of $35? Does it really cost them that much more to handle an exception? Probably not, but is that all they charge for a bounced check? No, the person who deposited your bounced check also had to pay a fee. So one bounced check can make the banking industry $70 or more each time. What happens when you deposit a large check that eventually bounces, but you’ve written several smaller checks on the assumption that the deposit has cleared. Now you are out by hundreds of dollars, and it wasn’t even your fault. That’s is what the banking industry is all about – ways to make your money that you put into your account their money.

I could go on with fees, ATM fees, cash deposit fees, online banking deposit fees, check image fees, and so on. Get used to it, because there is a fee for everything. Turns out that free coffee at the local branch isn’t really free.

If you want to save for your retirement, and you are willing to take on at least some risk, then the bank is the last place you want to keep your money. You need to invest it some other way. Consider the Money Club.