The American Dream

ting and beating the industry average should be just as loved as apple pie. If you ask many Americans what their idea of the American Dream is, you'll get many different answers. The reason for this is because the perception of the American Dream is highly subjective. The basic standard and entry point of the American Dream is to work 40 hours per week for 40 years and then retire on Social Security on 40% of the income they have been making over their very long career. Sadly, this is a reality for a great majority of people. This is the most they will strive for in their apple pie. You see in this pie, in order for it to work, you have to start working in your career by the time you're 25 (no problem there). You have to save up for a down payment to buy a house and have this process completed within 10 years of your career. You'd have to not ever refinance your home and have it paid off by the time you retire. That way you would be able to eliminate your largest expense (your house payment) so that you can survive when your income reduces once you are forced to live off of Social Security. Here's a slight issue with this apple pie. If you get married, have kids, take yearly vacations within those 40 years of working, then you'd have to earn more within those 40-hour workweek. In this apple pie, saving for your children's college fund becomes extremely difficult most of your resources will be allocated and dedicated to your living expenses. Saving for retirement in this pie is even more difficult. However, it can work if you're incredibly disciplined. The problem is we live in a society where it is easy to buy things. We live in a society where advertisements are on your portable devices and the temptation and pressure to buy things are intense 24 hours per day. To make things worse is that those advertisements and constant pressure is centered around your interests and hobbies making resisting these things nearly impossible. That means resisting temptation like this for the next 40 years of your work life requires some serious discipline. If you are one of the very few with this type of discipline who can resist the constant bombardment of pressure to buy the things you love most for the next 40 years then the entry-level American Dream just might be for you and I applaud you for it. However, if you're like most people and want more than just solely working 40 hours per week for the next 40 years to retire and maintain 40% of your income then you have to either work more hours or work smarter. In other words, you need a new or better plan. 

Traditional Savings:

The average savings rate is somewhere between a half of a percent to as high as 4.5% for a high yield savings. An average inflation rate of 3% (recently, inflation has been a lot higher, but the average is 3% when you consider the most recent 100 years) means that you lose money typically with your standard savings to a very modest gain of 1.5% for the very best high yield instrument. Let's assume that you're able to save $100 per month the entire time you have been working of 40 years.  First of all, there are 2 problems with this scenario.

Problem 1:

I must remind you that the majority of Americans do not save that much. Most Americans can't absorb a $400 emergency. Doing so would cause extreme economic difficulty. However, we will assume that you can save that much. However, if you are fortunate to save at this rate, you'll run into 

Problem 2:

Most savings instruments have a cap on how much you can invest. Also, the rate you get will be for a limited time only. In other words that high yield interest rate will only last you approximately 5 years. After that, the rate changes. 

However, let's say that you're able to save $100 per month and get a rate of 4.5% for 40 years. You'd only save $117K. Given the average inflation rate of 3%, over 40 years, the $117K you saved would only be worth $41K when adjusted for inflation. That is a paltry amount given the fact that you have been saving for 40 years. This is the best-case scenario for those who are enjoying the entry-level of the American Dream. if this is what you want for your apple pie (the American Dream for your perspective) then that's fine. You will have made it. In this version of your apple pie, it will be hard work and will require serious discipline. However, you can enjoy the sweet taste of your apple pie after 40 years of hard work and intense discipline. 

Reality Check:

In reality, almost no one has this kind of fortitude or discipline to save for 40 years and spend almost nothing. If you have a pulse, you will come across something that you are going to want to buy. There will be a time when you will not be able to consistently put away $100 monthly for every bit of the planned 40 years of saving. At some point, you are going to have an unplanned emergency or another expense that will knock you out of saving for a certain period of time. Imagine if your savings rate had an even lower interest rate. You wouldn't even experience the minimal standards required to enjoy the American Dream. That apple pie just got bitter. You do have a few options. You can make more money by (perhaps) getting a second job, maybe even part-time. So now that 40 hours per week has become 60 or maybe even 80. Trying to do this for 40 years will have you coming up short when trying to reach your golden years. 

The Plan:

Failing to plan is planning to fail. The American dream was not designed to be easy. It was designed for the diligent. In order to achieve The American Dream, you have to have a foolproof plan. It has to be something that will be more likely to succeed than not. That means you have to plan well. Setting goals is a surefire way to increase your chances to succeed exponentially. Setting goals is something most people do not bother to do because they think it is not necessary. This is the main reason why most endeavors fail, failing to set goals. I'm going to use an analogy for setting goals to show you how critically important setting goals are. It is also critically important to write your gaols down so that you can track your progress. Aviation is one of the safest ways to travel. The reason for this is because checklists are required for every takeoff before and after. Checklists are like setting goals for your flight. It ensures that you don't miss a single thing. Checklists is the law that every pilot from commercial to private pilots must follow. This is why air travel is one of the safest ways to travel. You have to set goals as well as write them down on paper. You have to have a checklist for your goals, that way you can track your progress. If you can write out your goals and make them trackable, then you are well ahead of most people and have substantially increased your chances of succeeding.

What Banks Don't Want You to Know: 

In the words of the hugely successful Dave Lindahl, "if you're willing to do what most people won't do, then you'll be able to do what most people can't do." If you look at every hugely successful (self-made) individual, they all have one thing in common. They didn't subscribe to historical norms. They went outside the box. The Fords, The Carnegies, The Wright Brothers, The Buffets, etc., etc. They all did what most people refuse to do. They took extraordinary chances and became some of the most memorable people in history. Planning your investment should follow the same philosophy but with one small caveat. When taking those extraordinary chances, the chances you take should be calculated. The Bible says Fortune Favors the Bold. That means you should be taking chances that can yield you extraordinary rewards. Every successful person follows this rule whether knowingly or unknowingly. Let's talk about how your bank makes money. Banks use money from individuals like yourself and lend it out to other individuals like yourself. They pay you a very tiny interest rate for the use of your money and then charge the borrower a very high interest rate. The difference between what they pay you and what they charge the borrower is their profit. That is the basis of their business. They also take bigger risks by investing in the stock market as well. They still use your deposit money for this as well. Your deposit money is called a certificate of deposit (CD). The interest you can earn from a traditional bank can range from half of 1% to as high as 5% for a certificate of deposit. What if I told you that you can earn more than 1,500% of this with very minimal risk? Remember when I said that The Fords, The Carnegies, The Wright Brothers, The Buffets, etc., etc. stepped outside the box? They took extraordinary risks (Fortune Favors the Bold) to achieve extraordinary success. You can achieve extraordinary success without taking extraordinary chances. You can earn 15% annually to really shorten your 40 years of working to achieve a real piece of the American Dream. You can outperform the market by leaps and bounds. Click Here to see how you can obliterate the banks and dominate this market.

The Rule of 72

The Rule of 72 is a rule that takes the interest rate that you earn and divides it into 72. Whatever that number is is the number of years it takes for your investment to double. In other words, if your investment is earning 1%, it would take your investment 72 years to double. Considering the rate of inflation, it can take your investment considerably longer than that. Traditional investments will get you a negative return when you consider the rate of inflation. This is why you need to think outside of the box when it comes to investing. 

Investing With Us:

Considering the fact that we pay 15% and 15% on the principal investments, we not only outperform traditional investments by over 3000%. Our investments are typically 36 months.  Just considering our numbers alone will double your investment every 4 years. Take a look at some of our prior investments and if they make sense, give us a call and let's talk.

Willlie Redd

916-462-0745