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

Of the hundreds of wealth-building strategies I have tried over the years, the very best one was also the simplest. It is this: Make sure you get a little bit richer every day.

It sounds simple, and it is. But I give it credit for getting me started on my personal road to wealth.

Thirty years ago, I had a net worth of zero, a salary of \$35,000 a year, and college loans for both me and my wife that we were still paying off. With three small children, our expenses were gobbling up every nickel of my after-tax income… and then some.

I decided that I would do whatever it took to get out of the hole I’d dug myself into. And that decision had me reading and thinking about wealth-building day and night.

I was bathing my brain in the elixir of ideas I was coming up with. It was very stimulating. I had fantasies of getting rich in all sorts of fancy ways. But deep down inside, I knew those complicated strategies were not for me. When it came to making money, I was extremely risk-averse (and I still am). In the race to a multimillion-dollar retirement, I was a tortoise not a hare.

And so my first wealth-building goal was small: I promised myself that I would get richer by just \$10 a day.

I pulled a \$10 bill out of my wallet and stared at it. “I really don’t need this \$10,” I thought. “I can brown-bag it tomorrow instead of going out for lunch.” I knew that I would eventually raise the ante, but I wondered, “How much money would I acquire in, say, 40 years by just putting an extra \$10 aside every day in a bank account earning 5% a year?”

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

My total capital invested would be \$149,650. The simple interest would total \$156,950, and the compounded interest would amount to \$182,061, for a total of \$488,661.

Then I wondered, “What would happen if I put away \$15 a day?” That came to \$719,604.

And then I asked myself, “What would happen if, instead of 5% on my money, I got 8%?” That came to \$1,620,592!

You can imagine my excitement! And so I started to set aside a little money every day.

But I soon realized that I couldn’t consistently follow my rule to get richer every day if I invested that money in stocks. The market fluctuates too much. One day I might be worth \$110,000, and the next day I’d be worth \$108,000.

People who knew more about investing than I did told me not to worry about these short-term fluctuations. They said that if I kept my focus on the long term, I’d get the 9% or 10% that the market delivers over time. But even though I understood the principle, there was no guarantee that I would have the satisfaction of knowing that I was actually getting richer every day.

That was a big problem for me – a problem I resolved with a simple plan.

I put half of my set-aside money into super-safe municipal bonds, bank CDs, and rental real-estate properties. This drastically reduced the volatility of my returns but it also, in theory at least, reduced my expected ultimate return on investment (ROI). So I compensated for that lower ROI by putting the other half of my set-aside money into stocks that could reasonably be expected to return at least 10% long term. That ensured that I was always ahead of my schedule – even if the ROIs I was getting on bonds, CDs, or real estate dropped.

This simple, tortoise-paced program worked for me. Since I made the commitment in the early 1980s to get richer every day, I have never experienced a single day of being poorer than I was the day before.

But there is more. Making this commitment will change the way you think and feel about building wealth. It will help you appreciate the miracle of compound interest. It will make you less accepting of risk. It will make it easier 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.”

We explore all these aspects of wealth-building in my newsletter, The Palm Beach Letter. For now, I just want you to consider making a commitment to get richer every day yourself.

You can begin, as I did, with a goal of putting away \$10 a day. Once that becomes easy, you will find that you want to raise the ante. You could hike it to \$15, as I did my first year. But soon thereafter, your addiction to income will make it possible for you to go much higher. (These days, my target is \$10,000 a day – and I hit it more often than not.)

I have explained this strategy to lots of people over the years. And many of them didn’t take it seriously. Perhaps it didn’t seem clever enough. Or perhaps they felt they were already doing well by following the investment schemes they were already using.

But none of them ever acquired the wealth I did. They sometimes had great individual hits that they’d tell me about – or even winning streaks when the markets were favorable. But in the end, they were always beaten by Mr. Market.

Meanwhile, by following this simple rule of getting richer every day, I was able to do better than I ever expected.

[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]
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