KLE 82: The $7 Million Dollar Formula
There once was a time when alchemists labored to find the secret formula that would turn lead into gold.
Even though no such ‘secret formula’ was ever found, there is a formula for wealth. Master it and you have mastered the secret to making untold millions; perhaps, enough to reach your own Number.
You may guess the formula to be this one:
Motley Fool, an online finance site with a strange name, calls this the “world’s greatest get rich formula”:
Now, some astute finance brains will know that equation not as some mystical secret but as the “future value of money” (FVM) equation taught in college. The FVM formula simply states that your future wealth (FV) is a function of three variables: the amount of money invested today (PV), the rate of return generated (r), and the length of time in which that money is put to work (n).
You don’t have to be a mathematician to understand that this is simply one formula that describes compounding. You don’t even have to understand the math behind this ‘formula’ because every financial calculator (or, ‘phone app) includes a function that calculates it for you. And, you’ve already used an online calculator that does exactly the same thing, in order to find out how fast you need to grow (KLE67).
But, I disagree: even though Albert Einstein is reported as saying that compounding is the “most powerful force in the Universe”, you already know – at least as far as rapid wealth-building goes – that compounding, on it’s own, is not sufficient to get you to your Number (KLE64).
You need a formula even more powerful … you need the $7 Million Dollar Formula:
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The $7 Million Dollar Formula is so simple-yet-powerful because it will tell you exactly – once I share the ingredients that make up the X-Factor – what you need to do in order to build wealth.
In the meantime …
Task 1: Given that you are shrinking Time (i.e. with an aggressive Date), it should be obvious that you need to find ways to grow your Capital … quickly! So – in addition to paying yourself once, twice, then three times – what other methods do you think that you could – should – employ in order to build your Capital?
