If we offered you a penny (one cent) which doubled in value every day for a month – or a million bucks, right now, which one would you go for? Most people would take the million dollars and run. Who wouldn’t? We wouldn’t!
Let’s explain why – take a look at this – it shows the compounding effect of just doubling your money each day:
- Day 1 – 0.01 cents
- Day 2 – 0.02
- Day 3 – 0.04
- Day 4 – 0.08
- Day 5 – 0.16
- Day 6 – 0.32
- Day 7 – 0.64 (one week)
- Day 8 – $1.28
- Day 9 – $2.56
- Day 10 – $5.12
- Day 11 – $10.24
- Day 12 – $20.48
- Day 13 – $40.96
- Day 14 – $81.92 two weeks)
- Day 15 – $163.84
- Day 16 – $327.68
- Day 17 – $655.36
- Day 18 – $1310.72
- Day 19 – $2621.44
- Day 20 – $5242.88
- Day 21 – $10,485.76 (three weeks)
- Day 22 – $20,972.52
- Day 23 – $41,943.04
- Day 24 – $83,886.08
- Day 25 – $167,772.16
- Day 26 – $332,544.32
- Day 27 – $671,088.64
- Day 28 – $1,342,177.28 (four weeks)
- Day 29 – $2,684,352.56
- Day 30 – $5,368,709.12
- Day 31 – $10,737,418.24 (One month – 31 days)
And that’s the power of what we call compound growth.
You might have seen the term before – and wondered what it means… For years – your investment doesn’t seem to do much – then – in that final run – magic happens – your money grows on a whole different scale – it goes into orbit. All you have to do is sit tight and trust in your decision. It’s difficult – almost unbearable at times.
Because there aren’t really any impressive results after a week – most people give up.
The same thing happens at the end of week two – and even at the end of week three, it’s easy to give up because there still aren’t really any impressive results are there?
But it’s in this fourth week that the results really come in. And finally – all that waiting – all that patience – pays off.
What this example brings home is that the key to investment and savings is not the amount of money that you bring to the mix – but the time it’s left there. There’s no shortcut for this. Most people have multiples of one cent in their savings – but they don’t leave it there for the long-term. They’re constantly looking for that elusive million dollar deal. So they’ll buy shares – bonds – or ETFs ( exchange-traded funds) and attempt to “play” the market.
Then – 20-years later they will look around and see that they are still stuck on week one or two. They will have lost as much as they gained. These are the million-dollar players. Most people are looking for short-term gains.
“10½ Million Dollar Club” knows better.
They choose a stable, inflation-proof investment vehicle that delivers slow and steady long-term benefits – otherwise known as compound growth. Like our example above – during most of their investment they are in weeks 1, 2 and 3.
The difference is that once they reach week 4 and beyond their gains are safe.
No crash or financial catastrophe will cause them a problem – in fact – a crash or financial catastrophe is likely to enhance their investment. No secret then that we are talking about precious metals. Gold, silver, and palladium have seen massive gains recently. Many people thought their “Bull Run” – the period of time the metals were rising in price – was over.
Far from it – we believe the price of gold has only now reached anywhere near its true value. People see, in gold, a safety net – a means of holding onto their financial assets In a way which works as a balance, or set of scales.
As one side goes down – the other side goes up. Sometimes they work in tandem. Sometimes they work against each other – but the overall effect means that precious metals make up for any losses in a Fiat currency investment.
By this, we mean anything involving paper money. When you invest in a savings account, the stock market, mutual funds, bonds or ETFs, for example, you never own the underlying asset. With physical precious metals – you do. Even in a savings account your initial investment and interest rate gain Is Fiat currency which is only a promise by the government – contrary to popular belief – it is not real money.
What’s the advantage of this?
Personal finance Is exactly that. There is nobody looking out for you. You are on your own trying to find the best way to grow your money over time, with the best interest rates, to save for your retirement with what’s left from what you earn.
You have to make sure that any gains you make – be they through real estate, stocks or any other form of investing – are not lost when one of the periodic financial corrections take place.
Precious metals – particularly physical gold, silver, and palladium bullion are perfect. With gold coins, gold bullion, and the other metals, the price is transparent and available 24-hours a day anywhere in the world. Investors have the choice of holding the metals themselves or putting them into storage in a secure vault or depository.
The metals can be exchanged in any country in the world – for the local currency – or any other currency.
One of the most popular ways of using the effect of compound interest is to put your investment gold, silver, palladium or platinum into an IRA or 401(k) rollover.
This enables you to claim tax credits while the metal is invested. This – effectively – jumps you from week 1 to week 2 In the sequence above – with the government adding a bonus to your contribution.
We have seen how just one penny can grow – imagine how much just your tax break would be worth over 30 years if it was invested in precious metals?