Have you been to any store, or restaurant recently and they ask you to round your purchase amount to the nearest dollar for the "Charity" of their choice? Most people regardless of how strapped they are for cash will tell them yes simply because the cashier asked and they don't want to look like a heartless cheapskate in-front of the cashier as well as the other patrons.
What if I were to tell you that this "Charity" change could literally be the start of your journey to financial freedom? Well, let's take a look at some simple supporting numbers....because while sad faces and emotional responses are what are used to take this money out of our pockets, logic and sound mathematics can not only keep it in your pocket but can be used to show you a path to have that money work for you.
Let's say the average "acceptable" amount of the round up charity bit seems to be right around ($0.25) a quarter. Let's say you make 8 purchases a week in your everyday life where the cashier asks you to donate and you do. Obviously, I am using simple numbers so everyone can follow along, I imagine most people make far more purchases and most donate more than a quarter each time they ask without even paying attention to how much they are taking or where it is actually going. OK, so back to the math .25 (Avg "donated") x 8 purchases per week = $4 every week. Now there are 52 weeks in a year so we can use the simple formula 52 (wks) x $4 = $208. So the average person in this example "loses" $208 a year to this type of program right?
Not exactly, see the world is not so clear and simple is it? So how much did this person actually lose? Let's take a small paradigm shift and look at the problem from an investors standpoint to see what's closer to the amount lost.
We will use the same numbers to illustrate the point. Let's say you take your initial $4 that you chose not to give away on the first week of the year and invest it in Tezos XTZ cryptocurrency (I'm purposefully using this one because it currently offers staking rewards of 4.03% and will cause this largest wow factor in difference). Just to keep the math simple let's say the crypto market freezes all its's price fluctuations (which is impossible) and Tezos is now frozen at a cost of $2. This means that you can take your "saved" $4 this week and effectively invested in two XTZ (Tezos) tokens. The next week when you are about to once again refrain from "donating" you can repeat your investment. Only you notice that your crypto amount of tokens has grown from 2 to 2.000155, Why? Because at an estimated 4.03% annual growth rate of your staked tokens is mathematically the same as multiplying the amount of tokens you own by .0000775 each week. So, the numbers work out this week 2 tokens x .0000775 = .000155 (Growth) + 2 (tokens purchased) = 2.000155 tokens.
So each week for a year you stop "donating" $4 and instead invest $4 on 2 tokens and each week the new total number of tokens is compounded by the earned rewards. By the end of the year (52 weeks) you have invested your $208 on 104 tokens which has grown thru the rewards to 104.205796 tokens. Which if the price were locked at $2 per token means that your earned rewards alone earned you a whopping $0.41!
$0.41 That's right forty-one cents! And you didn't lift a finger to earn it.....but would you like to hear the best part? I mean come on as appealing as $0.41 is that can't be the only reason investors choose to put money into crypto can it?.......the best part is that the values of the tokens fluctuate!! That's right that means that today if the price is $2 per token, in an hour it may go up to $4 per token essentially doubling the dollar amount you have invested!
If you were to invest $4 per week it would take you 25 weeks to have $100 in crypto right? NOPE!! Because the market is constantly moving which means the price goes up and down. The key to any profitable investment is that you make the purchase when its at a lower cost and sell when its a high value.
You can use your "change" to get you on a path that can truly change your financial future, the key is you gotta start somewhere.
What about Risk?? Let's eliminate that scary old risk factor all together (I'll go into more detail in another post but here's the gist)
Say you were to invest your $4 for 12 weeks ($48) and the price hovered around $2 per token (48/2 = 24), then all of a sudden you check and your tokens are now worth $4 per token!! That means your 24 tokens (24*4 = $96!)
Well remember you invested $48 of your "saved" money so that's what your risking $48, but now your investment is worth $96. A savvy investor would then do what? pull out his or her $48!! Why? Because by pulling out what he/she has risked, this means that your risk is now $0!! It means that the $48 left in Tezos is all free money and you have an infinite growth rate on your money because you have now zero risk of losing your investment!
Remember there are lots and lots of ways to lose money in this world. But, thankfully there are also a number of ways to grow your money and make it work for you instead of you working for it. You can even have it work for you to the point where you can live off of your investments. That's my goal with this blog, to teach you ways to invest and grow those investments especially crypto investments into a way to each a livable cash flow.
But, we will get into all of that in future posts.
Thanks for reading.