We have crossed a significant threshold in the investment club. We are in a place where we have so much money that little bumps make us big money. We have also reached a point where we can open up substantial positions that can make us money without risking the entirety of the portfolio. That is a great place to be. Swinging for huge returns on small holdings can take you out and just isn’t sound investing, that, is gambling.
I am writing this post because I know people probably hear investment club and think ‘get rich quick’. Then when they don’t get rich quick they want to leave. While I appreciate the enthusiasm, I want to manage expectations with this post. We now have a good amount of money invested and in a year or two we will have even more invested. That $25-$100 that you invested now will pay dividends for the rest of your life if you are willing to sit tight for the next few years. This post will outline what year two will look like for Todd Capital Investment Club.
Part of this club is wealth accumulation. That is what we have been doing over the course of this last year by bringing in members and accumulating a large principal balance. The other part is the return on investment. The ‘ROI’ is simply the icing on the cake. The real wealth builder is the habit of taking money you would otherwise spend and putting it somewhere so that it can be used to later make you money. You effectively build up your army of dollars and then deploy them, knowing that the army is just as important as the victory. The bricks are just as important as the wall.
In year two I don’t want us to lose sight of accumulation. Returns are great and I love returns but please please please focus on the accumulation of wealth. This is a long and arduous process but it will turn us into generational winners not paycheck spenders. Wealth accumulation might look like avoiding certain things so you can later live like you really want to live. Long term you win, short term you lose. We have another few years of this but we are in position to change things for generations. Don’t ruin that for a little short term fun.
In the book the Millionaire Fastlane he talks about how stock market investing is a means of preserving wealth not actually building it. This is 100% true. The wealthy families and people in America got there through business, then they took their massive business wealth and preserved it through investing in stocks, real estate and other businesses. We can’t skip that step. Investing isn’t the sole solution to wealth but it is a part of wealth. You have to do your part and that part is to continue to generate massive amount of principal so you have wealth to preserve and grow. That can come from a high income career or from your business.
Those 5-10% returns I mentioned earlier preserve wealth. How? Well it positions you to live out of the gains while you don’t spend the principal. For example, if you have a million set aside and earn 8% on that money, which is easily attainable, you generated $80,000 to live on, and you STILL keep your million. The average person would put that million into a savings account and proceeded to bleed it dry at about $100,000 per year. A year later they are in the hole while you lived the same or similar lifestyle and are still even.
We aren’t at a mil yet, but we will be and when we get there that is when we will start living out the gains, fully. Now that I think about it, we might not even have to get to a mil, but we need to get to a solid place like $100,000 before we start talking about ROI and distributions. This is for the greater good of the whole.
Grant Cardone said that he saved up $350,000 before he even started investing because you can’t get rich investing small dollars. You also can’t get rich if you pull your money to pay for expenses. This puts you right back at square one. We can’t build if we keep pulling out bricks because building is taking longer than expected. The brick house lasts forever and forever doesn’t’ happen in one year.
Level up with Todd Capital
I want to encourage you to not just stay here but level up your investing and invite your friends. The bigger we are the more we can do. I promise you that you won’t get this level of care, analysis and thought toward your money management from some robot or financial adviser who earns a commission from their advice. Continue to build the wall. Continue to build the army. Continue to build long term wealth. If you would like to join our club email us at firstname.lastname@example.org
Be great, invest well,