How to Make a Million Investing 5 Dollars a Day – The Magic of Compounding
You would be surprised about how many ways there are to make a million dollars. Each of them has its advantages and disadvantages and if you want to become a millionaire, you should choose the one that suits you the best and stick to it. None of the methods is 100% sure, but what is in life? If you want a million you should learn to take reasonable risks! No risk = no profit.
So here is today’s method:
Invest $5 every day and employ the Dogs of the Dow investment strategy. Please note, that this method is a long-term one but it’s easy to follow and requires only some discipline from you. Here is the action plan:
1. Put aside $5 each day
3. Just wait and after 32 years you will become a millionaire.
Here is the proof for that and how all of this works. That’s the magic of compounding…
If you still don’t believe it, you can make this calculation by yourself with our cool compounding calculator here. Not only you will be able to verify this but also you will be able to play with the variables (interest rate, amount, your annual addition to the investment) to see how you can speed up your journey to a millionaire… Try it out with just a couple of percentage points higer to see how many year you will save with just a slight increase… the magic of compounding is really migic…
If you can invest $5 each day from your income, you can have $1825 at the end of the first year. That’s still far from a million, but that’s OK. Have you heard about the Dogs of the Dow? This investment strategy has yielded 17.7% on average for the past 45 years. It is based on buying the highest dividends paying stocks from the Dow Jones Industrial Average Index and holding them. Let’s take this return skeptically and fix it at 15% per year. So, saving $5 per day is 1825 per year. Investing that amount at the end of the first year at the rate of 15% and adding to your investment the same at the end of each following years will make you a millionaire in just 32 years. You may say that’s a lot of time but this is a relatively stable strategy and you don’t really need to do much to achieve your goal. It’s really simple and it’s working. The only thing you should do is to keep putting aside $5 each day and investing it as described above.
If you are not one of these patient individuals, this strategy is great for a backup plan. If you want to make a million dollars fast, you could put into work some other shorter-term strategies and you can employ this one as a plan B. If the faster ones fail, this one is simple to follow and has high chances for success.
If you are not one of those highly disciplined individuals, I don’t think your chances of making a million are any good. Discipline is really important not only for your wealth but also everything in your life. So if you don’t have some, make sure you change this as quickly as possible and see how your life will change. It will not be easy, it’s actually very hard to have a good discipline but having it is even more crucial.
You can see some more methods about how to make a million dollars don’t hesitate to check that link you just went through.
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