We can all become rich by putting aside one euro per day
All it takes is one coin per day, if we want to become rich. It sounds obvious, but saving is every millionaire’s most important and real secret.
We can put this theory to the test with a simple calculation, and by assuming we set aside 1 euro per day for a year. At the end of the12 months, we will have saved 365 euros without having put in too much effort, and if we continue to do this every day for 10 years, the total will come to just over 3,650 euros. The effort needed to save just one euro per day was minimal. Now let’s imagine that, instead of 1 euro, we set aside 10 euros a day. In one year, we will have saved 3,650 euros, and in 10 years, we will have 36,500 euros.
These exercises simply serve to help us understand how easy it can be to save a certain amount of money without having to make too many sacrifices. Of course, to become a millionaire, 1 euro per day is not enough, nor is 10 euros per day, but the approach is the same, and starting with 1 euro per day is the first brick to building a solid foundation. Each euro is like a small seed.
Now if that single euro is put into the bank, it will grow, thanks to interest rates. With a hypothetical interest rate of 20%, we would be able to achieve ambitious financial targets in a much shorter time. While no bank would ever give such high interest rates, there is a method to earn money that doesn't require bank deposits.
Of course these are just lines of reasoning, or coaching, to help us realise that the most important part of money management that we need to change is our attitude, because we have to believe that it is possible to achieve high earnings, and commit to making it happen. To do this, we have to create consistent and long-lasting streams of income. Allen maintains that not only is this possible, but that it is accessible to anyone who is willing to learn.
Most people are inconsistent in their daily savings, even though consistency is more important than any amount of money we invest. With savings of 10 euros per day, for example, we could become a millionaire in just 20 years, if we invest the money in diversified funds, stocks, or real estate, and leave it to grow at a rate of 20%.
Savings and investments always go hand in hand, because the right investments can last us a lifetime. So we should remember that the longer we invest, the lower the risk, to buy things that work or invest in what brings profits, and that the earlier we start buying, the richer we become.
'Every time you save one of those money seeds,' says Allen, 'you start sowing your way to wealth’.
The key ideas of "Multiple Streams of Income"
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