The Value Of A Penny

The Value Of A Penny

You may have heard of the riddle you are supposed to ask someone: “Which would you rather have, a million dollars, or a penny that doubles each day for a month?

Most people would answer (at least before the advent of the internet) that they would take the million bucks. However, after a 30 day month, the penny a day scenario would give you in excess of 5 million dollars, and if you happened to hit a 31 day month, in excess of 10 million. Wow!

The first graph below is a picture of how that works. I like this graph because on a scale that is meaningful for the end results, the graph looks pretty flat up until you reach that last few days of the month. If fact, the results are pretty meager for most of the month. The reason why I like this graph, however, is because it parallels the way things work in the network marketing industry.

One Penny Doubled Each Day

My wife and I are building a nice income under the guidance of a couple of great mentors, and a whole team of great leaders. Unfortunately, however, most people just aren’t willing to be stick it out long enough to see that exponential growth. This, despite the fact that our industry has created more wealthy individuals than any other industry.  We have too much of the “I want it now” mentality.  When it comes to building an ongoing residual income, however, “Patience is truly a virtue!

That brings me to the second graph. One day I woke up and realized I had reached the age of 62 and couldn’t afford to retire. I hadn’t saved all my life the way I should have and I had a couple of financial disasters that hit me hard.  Not desiring to work till the tender age of 85, I had to figure out how I can make up for a life time of bad things in less than a handful of years.  So we turned to network marketing, and found one of the best companies around to team up with. I figured I could come up with about $1000 to invest up front, and about $250/month to put into the business.

I had a choice. I could invest in a business or do like most other people do, i.e., put it into a standard investment vehicle. If I did the latter, and I could average a 12% return on investment, after 4 years of $250/month, I would have accumulated not quite $17,000.  I could reliably take out about 8%/year and not exhaust the principle, which amounts to about $113/month in extra income over and above my basic retirement.  Not exactly a “Quantum Leap” increase in extra retirement income over and above the zero extra income I already had!

However, our company has a specific “day-by-day” plan that (with the same investment as above) will give me a business that can produce in excess of $26,000 per month.  In the graph below it is referred to a the “CTE” plan.  Now I don’t know if that would qualify for “Quantum Leap” status, but it sure is better than $113/month.  Quite frankly, it’s more than most people will have even after 40-50 years of savings.

Are these results guaranteed?  Certainly not, but neither is the 12% return we assumed for the standard investment.  In fact the only thing that is guaranteed with the standard investment approach is that at the end of four years I will have made little difference difference in my post retirement income stream.  The graph below depicts this. The horizontal axis represents what our results will be if we follow the “day-by-day” plan and attain results from as little as 2% of what we should, all the way to 100% of what it is designed to produce.  Even at only 2% of the plan’s goal, it still makes a difference of close to 5 times the income that comes from a standard investment.

The difference in these two approaches is simple:   In the business “day-by-day”  investment plan my success will be totally dependent on me. Not on a boss who is a jerk, not on a company that constantly lays folks off, not on a government entitlement….. just on me.

Four years of hard work for a lifetime of rewards. I think it’s worth it!


For questions about Clay And Ali’s business, please contact them at: 

About clayandali
Trained as a research chemist, but have been involved with Entrepreneurship for over 30 years. I have been involved in photography for 41 years. Ali is a graduate of the Ohio Institute of Photography in Dayton, OH. She loves both portrait and landscape work.

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