How a $10 Bill Made Me Richer Than All My Friends

Let me share one of the best ways I know of to build wealth.

And out of the hundreds of wealth-building strategies I have tried over the years, the very best one was also the simplest…

Do everything you can to become a little bit richer every day.

This thought popped into my head almost 30 years ago, about a year after I “decided” to become rich. I was reading and thinking about wealth day and night, bathing my brain in the elixir of clever ideas. It was very stimulating. I had daily fantasies of getting rich in all sorts of fancy ways.

But deep down inside, I knew that these complicated strategies were not for me. There were two reasons why I was doubtful.

The first was based on observation. I had an inside view of the financial services industry as an editor of about 30 business and investment publications. The fancy ideas, however compelling in print, never seemed to work out in reality. The second was based on personal experience. I had already discovered that what had made me successful as a student, and as an employee, was extremely simple: I worked harder than my peers.

“Forget all the complicated strategies,” I thought to myself. “What if there was a simple formula for getting rich?”

Several weeks later, the idea came to me…What if I could get just a little bit richer every day?

How I Started Getting Richer

At the time, I had a net worth of zero. And, my annual salary was only $36,000 per year. With three small children and my wife in college, our expenses were gobbling up every nickel of my after-tax income. So, my first wealth-building goal was small: I would get richer by saving just $10 per day.

I knew that I would eventually raise the ante, but I wondered, “How much money would I acquire in, say, 40 years just by saving an extra $10 every day in an account earning 5% per year?” Ten dollars a day equates to $3,650 per year.

I did the numbers and was happy with the answer: almost half a million dollars.

Then I wondered, “What would happen if I put away $15 per day or $5,475 per year?” That came to nearly $700,000.

Excited, I took it a step further. “What would my account grow to at 8%?” My final account balance totaled over $1.5 million!

By putting away a measly $15 per day, I was guaranteed to become a millionaire!

No sophisticated strategies I could barely understand. No risky investments that could backfire and devastate my net worth. Just the simple arithmetic of adding $15 per day to my stockpile of wealth.

I was excited. I was motivated. I was greedy.

This got me going. For the first time in my life, I was committed to saving. I began to measure my financial success not by my toys (house, car, clothes, etc.) but by my net worth.

I began to recalculate my net worth every month.

Of course, when you are earning only $36,000 and putting away $10 per day, your net worth is not going to jump up dramatically every 30 days. So, every month, I had mixed emotions when I did my calculation. I was richer, but my wealth was accumulating too slowly…

The Shortcut to Supercharging Your Wealth

 My simple plan was working: get richer every day. But I wanted to ratchet up that “get richer” part. There were only two ways to do that:

• Get a higher rate of return on my savings

• Earn more money.

I decided to do both.

I realized that the easiest way to earn more money was to get a raise. And the easiest way to get a raise was to become my boss’s No.1 guy. Before then, my goal was to be a great editor. Now I knew I had to become a profit-making machine. I changed the way I worked immediately, and my boss noticed it. Within six months, he doubled my salary.

After taxes, that extra $36,000 came to about $2,000 per month. I was tempted to buy all sorts of toys with that. But, motivated by my “get richer every day” idea, I spent only 20% of that, or $400 a month, on fun stuff.

That meant my daily saving goal jumped from $10 to just over $50 ($1,600 divided by 30 days).

The second part of my plan was to increase the rate of return I was getting on that saved money. I knew enough about the stock market to realize I couldn’t expect to earn more than 10% from stocks.

(For example, the S&P 500 returned an inflation adjusted average of 7.6% from 1971 through 2001, and it returned an average of 5.2% from 2001 to 2021.)

So, I saved that extra $1,600 per month in a bank account with the goal of using it to launch a business. I believed the returns I would get from starting a business would be superior to those I could generate from the stock market.

Six months later, I went to my boss with $9,600 and a business plan. It was actually much more than a plan. It was a product and a promotion, in rough-draft form. I told him I wanted to be his partner. He could have thrown me out of the office, but he didn’t.

He agreed to take my idea and my money for 90% of the business. Meaning, he gave me a 10% stake in this business.

I was smart enough to know that he was being generous.

I was lucky with that first effort. Within six months that $9,600 investment had given me a return of more than 500%.

I was on my way.

But it all began with this very simple strategy: Get richer every day.

How My Simple Strategy Has Changed Me

I’ve learned a lot about business and investing since then, but I’ve never abandoned that simple strategy. I continue to check my net worth every month to make sure it is getting larger.

Nowadays, when I’m presented with a business or investing opportunity, I ask myself, “If this goes wrong, how will my bottom line look next month?”

Since I made this resolution in the early 1980s, I have never experienced a single day of being poorer than I was the day before.

Think about that.

I know people who have been rich and then poor and then rich again. I read stories about billionaires whose wealth fluctuates according to the price of their stock. I couldn’t bear to live that way. I need the security of getting richer every day.

I don’t feel greedy anymore. I don’t need to get a lot richer every day. Ten dollars per day is enough, again.

I can sleep at night.

This simple strategy has had the most profound effect on me. It changed the way I thought about everything related to wealth building. It made me a harder and better worker. It made me a shrewder and more cautious investor.

It can do the same thing for you.

I invested my saved money in businesses. You might not be at that point yet. But it doesn’t matter. You don’t have to be able to start a business. The point is to find some way to increase the return on your saved money. For me, I did that through the huge return I enjoyed on the business I started. For you, it could be finding an alternative, safe investment with higher returns. Our Performance and Legacy Portfolios are two such high-return investment vehicles.

In any case, I believe that if you let this little idea of “getting richer every day” sink into your psyche, it will have the same effect on you.

It will make you less tolerant of risk. It will make it easier for you to understand the benefits and drawbacks of every type of investing. And it will turn you into an income addict, which is, in my book, an essential component of thinking rich.

How You Can Begin Right This Second

For now, I want to leave you thinking about this strategy for growing wealthier. I want you to consider making a commitment to setting aside a fixed amount of money each day.

You can begin, as I did, with a goal of $10 per day. Once that becomes easier, you will find that you want to raise the ante. You could hike it to $15, as I did my first year, and then $50. But soon thereafter, your addiction to savings will make it possible for you to raise your target much higher than that.

I have explained this strategy to many people over the years. And I don’t think a single one ever took it seriously. Perhaps it didn’t seem clever enough for them. Or perhaps they felt they were already doing well by following the investment schemes they were using at the time.

But none of them ever acquired the wealth I did. They sometimes had great individual hits that they’d tell me about — or even streaks of winners when the markets were favorable. But as time passed, Mr. Market always had his way with them.

In the race for wealth, I’ve always been a tortoise. But by following this simple rule of getting richer every day, I was able to do better than I ever expected without a single day of feeling poorer than I was the day before.

I want you to be in this position too. Get a bit richer by saving something, anything, and start today.