Accumulation – A Powerful but Less used Tool to Create Wealth

Let me begin by sharing a joke.

“…………….

A couple watching TV after a hard day at work started conversation.

Wife: Do you drink beer?

Man: Yes

Wife: How many beers a day?

Man: Usually about three

Wife: How much do you pay per beer?

Man: $5.00 which includes a tip.

Wife: And how long have you been drinking?

Man: About 20years I suppose.

Wife: So a beer costs $5.00 and you drink three a day which makes it $420 each month. In one year it will be approximately $5,040.00

Man: Correct!!

Wife: If in 1year you spend $5,00

40.00. The 20years puts your spending at $100,800.00?

Man: Correct!!

Wife: Do you know that if you didn’t drink too much beer that money could have been put in a savings account. And after counting the interest for the past 20years you could have bought a plane?

Man: Do you drink beer?

Wife: No

Man: Where is your plane?

………… ”

This might be funny but there’s a lot to learn from it. Most of us do not see the power in accumulating wealth over time but it’s evident that numbers don’t lie. Most people will not be $100,000 rich in 20 years time but can afford to save $5 or $3 a day sacrificing a beer or something avoidable. The problem now is about doing it. Taking the action.

Sometimes, not seeing the magnitude of the results, (in this case $100,800) demotivates people. For others, the slow nature of the accumulation makes it not feasible to them.

One of the surest ways is giving a standing order to move money periodically into a safe haven for the next twenty years.

Holding everything constant, without any grand institutional failure and with even a 5% – 10% /per year interest, you should be smiling to the bank.

Look forward to a savings excel template you can use to track your progress.

Start accumulating.

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