Why prepare a plan?

It is important for us to develop a plan in order to reach our goals.  There is no limit to the number of pathways that could conceivably help us to reach our various financial goals; so, without a planned route, we could all easily become sidetracked.  A plan can also help to keep us from being caught-up in all of the various get-rich-quick schemes of today.

Here is my personal master plan.

My personal master plan is to:

Develop a variety of strategies that will allow me to safely earn a modest return of 25% per year on my investments

 

Dedicate myself to setting aside a minimum of $400.00 per month, for investment purposes only

 

Become financially free within ten (10) years by using this formula

Can this be realistic?

Now, I know that many people may be wondering just how realistic it is to expect to become financially free within ten years.  (And, with saving accounts yielding between 1-5%, I can understand why, to the average person, it would seem to be too good to be true!)  However, Play2wealth.com focuses on investment in businesses, real estate and paper assets because, through these investments, the best returns are made.

Here's a simple example of a high return business.

Here is an example of how, through a very simple business, we could easily make a return of more than 25% on our money.  We all have probably done a little grocery shopping in our day, right?  Well, often times, we can buy canned soda, on sale, for as little as $0.20 to $0.25, each.  Now, in order to make our 25% return on a $0.25 can of soda, we would need to charge an extra $0.0625 per can; or, $0.3125.  So, even after adding charges for taxes, deposits, insurance, rent, business fees, etc., shouldn't we still be able to make our 25% return if we are charging $0.75 a can?  Now, does a 25% return on a business investment seem so hard to achieve?

Money to invest

If we don't want to rely solely on a job's pension plan or on social security, then, won't we need to put some money aside for investing?  (Loosely based on the maximum amount allowed for an IRA, I chose to set aside $400 a month for investment purposes.  Remember, I am seeking to achieve financial freedom within ten years here, not wait until I'm 65, 75, or, older to retire.)  So, for the sake of financial freedom, couldn't we all save up $2.50 per working hour; or, $20 per work day; or, $100 per work week; or, $400 per month; or, $4,800 per year?

Putting it all together

Now, if we were able to achieve our 25% return on investment, while investing $400 dollars a month for ten years, then the return on investment, per month, compounded annually, would grow in this manner:

Year	Starting Bal	Deposit	New Bal	Yearly Return	Ending Bal
0	$0	$400	$400	$100	$500
1	$500	$400	$900	$225	$1,125
2	$1,125	$400	$1,525	$381	$1,906
3	$1,906	$400	$2,306	$576	$2,882
4	$2,882	$400	$3,282	$820	$4,103
5	$4,103	$400	$4,503	$1,125	$5,629
6	$5,629	$400	$6,029	$1,507	$7,536
7	$7,536	$400	$7,936	$1,984	$9,920
8	$9,920	$400	$10,320	$2,580	$12,901
9	$12,901	$400	$13,301	$3,325

So, by investing $400 per month, for ten years, with a 25% return on investment, per year, we would be able to receive $3,325 per month.  However, if we would decide to allow our yearly return to continue to accumulate for five (5) more years, without depositing any additional money per month, then our returns would grow as follows:

Isn't the power of compounding awesome?

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