If I could make novice investors understand one thing it would be this….
You cannot be a successful investor until you are a successful saver.
And you cannot successfully save money if you are spending it all on debt. This concept is so simple yet rarely understood or practiced.
Let me illustrate my point:
- Has an annual income of $60,000 (after taxes)
- Has annual expenses of $48,000
- Which leaves them with $12,000 to invest
- Has an annual income of $42,000 (after taxes)
- Has annual expenses of $21,000
- Which leaves them with $21,000 to invest
Immediately you notice Family A makes more money, but Family B keeps more money because of their willingness to save and get out of debt.
But I’m not done!
Let’s assume that Family A are very savvy investors, so savvy in fact that they can produce 20% annual gains consistently for 10 years. (A rare thing unless you’re Warren Buffet)
Now let us also assume that Family B is in tune with the market. They wouldn’t consider themselves experts but they understand long term trends, Dividend Kings, and options strategies. Utilizing this knowledge they can produce a modest 10% annual gain consistently for 10 years.
Which family do you think comes out on top??? Let’s take a look!
Family B takes the cake by approximately $4k!
Now to be fair I know that if I were to continue this analysis for 20 or 30 years Family A would come out far ahead of Family B. But let’s be reasonable, who do you know personally who has made a 20% annual gains for 10 years consecutively? The only people I know are hedge fund managers. On the flip side however, I know far more people who can achieve a 10% annual gain.
So what is my point?
I’ve said it before, and I’ll say it again before you invest a penny you need to be out of debt! Yes, I just said that. I’ll say it again too!
BEFORE YOU INVEST A PENNY YOU NEED TO BE OUT OF DEBT!
If you are feeling the need to discredit what I’m saying just answer these two questions:
- Are investment returns guaranteed?
- Are you obligated to pay your debts?
By eliminating your debt quickly and efficiently you can set yourself up to be a very successful investor.
Need some motivation???
I’ve got an awesome opportunity for you!
The Debt Movement is a project to help people pay off $10,000,000 of debt in 90 days. That’s a lot of debt! But if we work together I believe we can achieve this goal if not more!
Additionally they are offering “Debt Scholarships” to highly motivated individuals.
I can’t wait to see the results of this movement, I encourage EVERYONE to join and help spread the word.
Here’s to our Wealth!