This is the seventh article in a series of articles revealing the Myths that Keep Your Broke. In these articles, I will uncover the many myths that too many people believe. These myths can prevent you from creating wealth and complete financial choice™. Let’s start destroying them.

Myth #13: Small Amounts of Money Will Not Lead to Wealth

I’m sure you have heard the expression that it takes money to make money. If you take this logic to the next step, then it would seem that it also takes a lot of money to become wealthy.

If you keep following this logic, then you may be thinking, “I don’t have a lot of money, so I can’t ever be wealthy.” Thankfully I am here to tell you that this is a myth. Small amounts of money definitely can lead to wealth.

There is a classic math class hypothesis that teachers have used to best explain this principle. The teacher asks students to guess how much money they would have at the end of 30 days if they start with just one penny and they double it every day.

Students often guess $300 or maybe even $1000. But thanks to the principle of compounding, the answer is actually over $5,000,000!

Now, most investments don’t yield a daily 100% return, but it does prove even small amounts of money can lead to big amounts. Therefore small amounts of money, invested, can lead to wealth.

In my workshops, I show how $10 per day (like a specialty coffee and muffin at Starbucks) can create a $1,000,000 portfolio that can spin off $120,000 per year of income. That is $300 per month or 10% for someone who earns only $3000 per month.

My personal experience is an excellent example of this principle. Again, I was broke at age 50, and after expenses, I didn’t have a huge income. I was only earning $5000 per month. I used the same principle I suggest for others; save 10% of what you earn. I could have waited 20 or 30 years until I had saved hundreds of thousands of dollars to buy my first apartment building.

Instead, I took a calculated risk. I took everything I saved in 3 years, $18,000, and with two others we took out a loan and purchased a three-unit building. I leveraged my small savings with two others. The key is that I invested the small amount of money I had saved, instead of spending it or letting it sit in a low-interest savings account.

The key to both the penny equation and the way I launched my path to wealth isn’t about having a lot of money before investing, NOR paying off credit cards before I invested. It was: Start investing now, in smart investments. Starting to invest, even with $20, you can do today.

Smart investing takes knowledge. But you are not alone on this journey.

Check out my other myth-busting advice on https://wealthonanyincome.com/blog to find out how you can both start investing and make smart investments – even with a small amount of money.

How much can you set aside today, tomorrow and the next day?

Myth #14: Others Deserve Money More Than Me

Have you ever seen the photos of the retired couple traveling the world, or overheard a family talking about their beach house and thought:

Wow! They must have worked very hard to be so wealthy. I should have taken that better job or not taken out loans for grad school. If I had done more, been more, or worked more, had a better job, I could have been wealthy like them.

You can imagine after two divorces and a failed art gallery business, there were many times I felt this way.

Most profoundly when I was fifty years old, broke, self-employed, had no IRA or pension plan, no government benefits to lean on, and only about 15 good working years until retirement. (Today I use the phrase Complete Financial Choice™ instead of retirement, but here I will use the term retirement as it was the word that I best understood at that time in my life.)

I was scared and that fear made me realize I had two choices. Either I was going to be homeless and hungry or I was going to have to save or invest enough money to have a somewhat decent retirement.

After learning more about the benefits of failure I decided a few important things.

First, I was going to have to stop blaming myself for failing and instead praise myself for being willing to take calculated risks to succeed.

Second, I was going to have to believe that I deserved wealth and treat myself like I mattered. Despite thousands of dollars of credit card debt, I needed to build a net worth so I used a 5000-year-old concept called Pay Yourself First.<.strong>

When many people hear the concept Pay Yourself First, they think of buying themselves the car they want or the condo they deserve. But that is actually not paying themselves first; that is paying the car dealer, or loan company first. Paying yourself first means, investing in yourself before you pay a single bill.

When you Pay Yourself First, every time you receive money, you immediately put some amount of it aside. It can be from a paycheck, a commission check, a bonus, a rental payment or any other form of income. It can be 5%, 10%, 20% or more that you set aside FIRST, before you pay anyone else, including your landlord, mortgage company or student loans.

Like training for a marathon, you don’t start by running 26 miles, you start wherever you are. For me, I started my marathon training by running two blocks. Then over a few years, without even working hard, I could run an entire 26 miles at one time.

By paying myself first, I had saved $18,000 within three years. I partnered with my last, final and best wife and her Realtor partner to buy a three-unit apartment building, and started my real estate investment portfolio.

Once I understood I deserved to be wealthy, my failures became important experiences and I knew I had to invest in my success. I was worth it and so are you!

To Your Prosperity,

Rennie

Author's Bio: 

Often in the media and in a recent TEDx Talk, Rennie Gabriel supports individuals and business owners to create work as a choice, instead of a requirement, just as he did for himself. Rennie had gone broke twice (two divorces), but using the same concepts published in his book, Rennie created more wealth in each recovery than what he had prior.

As a highly rated instructor at the University of California in Los Angeles (UCLA), Rennie uses his award-winning, best-selling book, Wealth On Any Income, to teach effective money skills from both the emotional/psychological aspects as well as the practical components. His book has been translated into five languages. Rennie is a retired Chartered Life Underwriter (CLU) and Certified Financial Planner® (CFP®) and often adds BFD to his credentials.

His extensive knowledge of real estate and finance is useful not only to those who own or invest in real estate but to anyone striving for a better life by trying to achieve financial freedom.

His clients range from financial professionals, like CPAs, stock brokers, and financial planning firms, to entrepreneurs in the transformational space (coaches, authors, and speakers). He also works with large organizations like the FBI, American National Insurance and Toyota Motors.

After 40 successful years in financial services, Rennie now works to donate 100% of the profits from his speaking fees, wealth programs, books and business coaching to charities, the primary one is www.ShelterToSoldier.org where dogs are rescued, trained and donated as service animals for soldiers with PTSD and TBI (Post Traumatic Stress Disorder and Traumatic Brain Injuries)