The Millionaire Journey: Do You Think You Can?

Steam engine locomotive train. Detailed vector Illustration

I am in the process of launching my new book, The Millionaire Journey, in the next couple of months.  As the subtitle indicates, it is “A Guide For Anyone to Reach Financial Freedom.”  Interwoven between the real world instructions in each chapter, is an allegory of a train journey from Normal to the Land of Financial Freedom, just beyond Millionaire Mountain.  The inspiration for the allegory came from a story most will know:

The Little Engine that Could

You remember the Children’s book by Watty Piper.  But do you know THE STORY BEHIND THE STORY?

 Watty Piper was not the originator of this tale.  It was actually published first in the New York Tribune on April 8, 1906.  It is attributed to a sermon delivered by the Rev. Charles S. Wing.  Here is that version in its entirety:

In a certain railroad yard there stood an extremely heavy train that had to be drawn up an unusually heavy grade before it could reach its destination. The superintendent of the yard was not sure what it was best for him to do, so he went up to a large, strong engine and asked :

“Can you pull that train over the hill?”

“It is a very heavy train,” responded the engine.

He then went to another great engine and asked:

“Can you pull that train over the hill?”

“It is a very heavy grade,” it replied.

The superintendent was much puzzled, but he turned to still another engine that was spick and span new, and he asked it:

“Can you pull that train over the hill?”

“I think I can,” responded the engine.

So the order was circulated, and the engine was started back so that it might be coupled with the train, and as it went along the rails it kept repeating to itself: “I think I can. I think I can. I think I can.”

The coupling was made and the engine began its journey, and all along the level, as it rolled toward the ascent, it kept repeating to itself: “I —think —I can. I —think —I— can. I —think— I —can.”

Then it reached the grade, but its voice could still be heard: “I think I can. I—– think—–I—–can. I —–think—– I—– can.”

Higher and higher it climbed, and its voice grew fainter and its words came slower:

“I ——-think ——–I——-can.”

It was almost to the top.

“I ———think”

It was at the top.

“I ———can.”

It passed over the top of the hill and began crawling down the opposite slope.

‘I ——think——- I—— can——I—– thought——I——-could I—– thought—– could. I thought I could. I thought I could. I thought I could.”

And singing its triumph, it rushed on down toward the valley.

THE REST OF THE STORY:

What is so intriguing about this version is not the variation of the story, but the context.  You see, this sermon was given by Rev. Wing to his congregation after they had climbed their own mountain.  This Sermon was given in celebration af the Nordstrand Avenue Methodist Episcopal Church’s triumph.  They had finally paid off the mortgage on the church’s property.  They were debt free!

They thought they could, and they did! They reached Financial Freedom!

If you think you can, you will too!

Do You Want to be a Millionaire? You Do NOT Need Regis!

If you are a citizen in the United States of America, and you live to be 60, YOU SHOULD BE A MILLIONAIRE.  There is absolutely NO EXCUSE, not to be!  So why are so many people retiring and dying broke?  Because we do not understand the very simple concepts of living within your means and investing for the future.

I have been blessed in my life.  I grew up in very humble settings.  I was a child of divorce and watched my father live on Social Security disability at age 47 and die destitute in a Medicaid nursing home at the age of 59.  My mother remarried to a good man and lived a productive life, retiring with enough of a modest nest egg to provide for her, her church and extended family. The thought that I could ever be wealthy never crossed my mind as I was growing up.  In fact, I was more or less raised with the impression that being wealthy was sinful.

I did, however, acquire some life changing knowledge in my early adulthood.  One of my many ventures into multi-level marketing (there were sooo many!) companies was with an insurance company that converted whole life insurance policies into term life and annuities.  This was the early 80’s and I still remember the annuities were earning 11%!  Would I love to have that option now?!

What I learned on that job was the power of compounding interest.  A few years later, in my MBA program, I learned about investing in stocks, bonds, and real estate.  I started putting two and two together and determined that investing would be a priority for me.  I was 30 at the time, now I am 50.  Without giving details, it is amazing to find myself in my current financial position.  What is really remarkable is how much wealthier I would be if I had started when I was twenty!

“Still,” you might say to me.  “I am happy for you, but you have an MBA and make a six figure salary.  Most people do not find themselves in that situation.”  I could argue the point that almost anyone should be able to do what I did to get to that six figure income, but that is a blog for another day.  I am going to avoid all the arguments by showing how almost anyone in the US should be able to retire a millionaire.

Take, for our illustration, John Doe.  John is twenty years old, and frankly, he is a bit of a loser.  He has no ambition and is working for minimum wage.

Now, let us fast forward 40 years, John is still not very ambitious at age 60.  He is still working for minimum wage.  He has his entire life.  Oh, and the minimum wage has not gone up in that 40 years either.  He is only making $15,080.00 per year.  John is however, a millionaire!  He did not win the lottery, he did not get money from a rich uncle or cousin that passed.

How did he do it?  He took 15% of his money and invested it in a Roth IRA in good growth stock mutual funds.  He averaged 10% return over the 40 years.  That is a little less than what the stock market averaged in the last 150 years, but he still has $1,001,144 in his Roth.  I know a million bucks won’t go as far in 2053, but I think John will be just fine in retirement.

The 15% figure is interesting because it equals how much you and your employer are paying into Social Security.  At the risk of getting political, take a look at the return you are getting for that investment!  Would I rather retire with John Doe’s Roth IRA or Social Security Benefit Payments…  hmmm.  Not to mention, John will have to wait at least seven to ten more years to get full benefits from Social Security in 2053.  Oh yeah, and if John dies, his heirs get the million bucks instead of Uncle Sam.  That sums up the program we want to “save” to “help poor people!”

Merits or skullduggery of Social Security aside, we can still save like John.  Hopefully we will not be in a minimum wage job our entire life.  As we get raises, keep that 15% going into a retirement accounts and presuming we live long enough, we will be millionaires.

What about those of us who are in debt, middle-aged, and have nothing saved?  I will be honest, time is the main ingredient to this equation, and it will not be as easy as John Doe, but you can still get there!

A forty-year old making the average household income in the US, about $48,000, investing 15% ($7,200) with a 10% return, and getting 3% raises per year would have just over $1 million at age 66.  So if you make less than average income, or you are older than forty, you will need to make more and/or save more and/or save longer to get there, but almost everyone can get there!  They just need to develop and execute a plan.

If you need the best step by step plan on the planet to make yourself a millionaire get, The Total Money Makeover, by Dave Ramsey.  His “Baby Steps” will allow you to customize a plan for you, no matter your current situation, and teach you to “Live like no one else so that later you can live and give like no one else!”

Do you believe YOU can be a Millionaire now?

If not, I would love to hear the “why I am all wet” perspective!