Our spending might make us look rich. We buy ‘stuff’ (houses, cars, expensive phones, designer clothing, etc.) that shows our status in society.  However, the reality is, that looking rich is not the same as being rich*. Only the money you don’t spend today will make you rich tomorrow. The difference between your earnings and spending (a.k.a. your savings) starts to accumulate (assuming you invest it), and it’s just a question of time when it snowballs into unreasonable riches. Everyone can amass a Million Dollars (or more), it’s a mathematical certainty.

The Boring Math

How come? Let’s look at the ‘math’ quickly.

• The S&P500 total returns during the last 100 years (dividend included): 10.51%.
• If you just set aside let’s say $350 regularly every month (adjusted 2% for inflation yearly),
• Invest it into a low-cost S&P500 index fund and you never sell (or try to time the market),
• after 30 years you will have a cool $1Million in your brokerage account.
• It also speeds up after that: $2 Million in Year 36 and over $3 Million in Year 40.

Time is your friend. These are the facts. If you don’t believe me, grab Excel and throw in the numbers, I am sure most of you could probably re-create it in no time. Furthermore, this does not mean it will take that long. Mr SWimmigrant and his family completed it in less than half the time, and probably so could you.

What’s remarkable about this is:

• You don’t need $Million business idea, extensive business network, inheritance or anything else usually associated with financial success.
• $350 is not a significant amount to set aside, it is less than 10% of even a below average household income.
• Time is your friend. If you start in your 20s, 30s or even 40s, you can reach it easily before your retirement age. It’s almost boring.

This is kind of the worst case scenario, as some real estate ownership is almost inevitable, and given its leverage (mortgage), the annual returns are usually higher than 10%, sometime significantly so, which speeds up the process tremendously.

Wow, the miracle of compounding, as Einstein phrased it! It’s hard to overestimate the impact of exponential growth; it’s hard to phatom, almost counterintuitive. Once and for all, let’s put something to bed: Amassing a net worth of a $Million is RIDICULOUSLY EASY! In fact, it’s almost inevitable for any sensibly behaving human living in this country.

And I know a lot of you will crash that measly $350 or 5-10% savings rate, meaning your dreams come to pass before you know it. It’s just math.

The theory is simply enough. In this blog, Mr. SWimmigrant will hold your hand and walk you through the process in detail, to ensure you avoid the pitfalls, and speed up the process without taking unnecessary risks, while also having fun in the process.

No, you don’t need to put your life on hold. Swimming toward your financial dreams is FUN! See you all at the beach!

Keep swimming, my friends!

With Love,

Mr. SWimmigrant

*Suggested Reading: Stop Acting Rich by Thomas Stanley, PhD