Begin with the end in mind

I have a $100,000 in my savings account and would like to turn that into $448,400 in 5 years.

Welcome to the very first Touch of Midas blogpost. To begin, I implore you to think how many millionaires do you know that grew their wealth from mutual funds or savings accounts? Safe to assume the answer to that question is going to be a big fat zero.  As much as we like 0's behind our 1's, becoming a millionaire is hardly ever the primary driver, it's what being a millionaire affords. And our goal for you is to entirely eliminate your financial reliance on "work". This way, you can spend your most precious resource: time, on things that bring joy to you and your community. If you're curious how, I would sum it with one phrase, by capturing the magic of compound interest.

“Never depend on single income. Make investment to create a second source” - Warren Buffet

Let's say your journey for financial freedom starts today and you decide to put your accumulated wealth of $10,000 to use. The easiest thing you can do is place that money in an index fund that replicates the S&P 500. Just by doing that you are expected to receive an avg 11% growth(S&P500 avg 1926-2018). In 5 years that investment would turn into $16,850, a 68% jump. If you managed to outperform the market and get a 35% avg, you would have more than quadrupled your wealth to $44,840. 

Now imagine you were to put $1,000,000 to work, at market avg in 5 years that is $1,685,000 and at outperform that would be $4,484,000. No wonder the rich keep getting richer, it's a self fulfilling prophecy.

Begin with the end in mind.  Each one of us has varied perspectives on financial goals. Ask yourself, do you want to end your dependence on “work" to lead the life of your choosing? You will need to start with understanding how much money do you need to make in a year from your investments. Here are the two levers that we have direct influence over:

• Assets under management: Secure a $1mill and you should be in a position to make $110k(s&p500 avg of 11%). But if you believe your annual spend is $220k, you will need $2mill in AUM.
• Cost of living:  $100k/yr in NYC will afford you the lifestyle of an NYU student, while with the same $100k/yr in Buenos Aires will fetch you a kings life. Between NYC and BA there are several thousand options you can explore. The world is literally your oyster.

Financial freedom isn’t achieved by having a million bucks, it’s about finding ways to continually grow your ability to produce value with a compounding monetary equivalent. That said our goal is to help you get to that first million, so you can then propel your financial independence out into the stratosphere.

Through this blog, we aim to explore the journey of achieving your financial freedom and doing it in no more than 5 years. 

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