20 Months to a Million

Being the owner of multiple businesses, I am always conscious of my money from both a personal and professional perspective. Our lives are very much intertwined and often controlled by our ability to manage, save and spend our money. I was recently reminded of a great concept that I learned about when I was a teenager.

If a person were to take one dollar, invest the dollar in an asset and then sell the asset for two dollars, they will have taken the first step in a 20 month process of accumulating a million dollars. The only habit that would need to be created is the habit of doubling the amount in hand every month for 20 months.  The final amount at the end of each month would be:

Start - $1
Month 1 - $2
Month 2 - $4
Month 3 - $8
Month 4 - $16
Month 5 - $32
Month 6 - $64
Month 7 - $128
Month 8 - $256
Month 9 - $512
Month 10 - $1024
Month 11 - $2048
Month 12 - $4096
Month 13 - $8192
Month 14 - $16384
Month 15 - $32768
Month 16 - $65536
Month 17 - $131072
Month 18 - $262144
Month 19 - $524288
Month 20 - $1048576

Obviously the model is very simple and the idea is basic enough for anyone to grasp, however, I would like to expand on the underlying psychology of this concept. Let’s imagine that we were going to make a committed decision to implement this model in our own personal financial lives and we could not skip any steps or take any shortcuts. By the end of the first year, we will have accumulated only $4096. This means that in the next 8 months, we will have to amass $995,904 more than we currently have to reach the one million dollar level.

At this point, this imaginary experiment becomes more of a fairy tale or daydream to the average person. But let’s think about our minds and the power of focus. For the first 12 months of the experiment, we were making a monthly habit of acquiring assets (likely devalued assets) and selling them at a higher price point. As each month went by, we were forced to become more creative and innovative with our investments as the challenge of each amount grew larger. Assuming we were successful for the first 12 months, the challenge on month 13 would be to double $4096 to $8192. After an entire year of practicing with small amounts and getting into this habit, the only real change required would be to adjust our perception of the size of the investment.  There are plenty of people in the world who have had success doubling large sums of money in short periods of time (business acquisitions, real estate and currency trading to name just a few). The average person may not understand how to do it but they most certainly could learn if they were to focus their mind and their attention on the task and do whatever it takes to learn the required skill.

I once heard T. Harv Eker use the extreme example that if there was a life or death situation and your life depended on you making a million dollars in one year, you could figure out a way to do it. I completely agree. The point I am trying to make is that I truly believe we are all capable of achieving a goal like this if the stakes are high enough. Why then, do so few people ever try to achieve such a major goal? Why do so many people reject the idea before giving any serious thought to it? There are probably a number of reasons, but from my perspective, the primary reason a person would never even attempt a goal like this is because in their heart, they don’t believe they can do it. If they did believe they could achieve the goal, would they not be actively working on it? Of course they would.

With that in mind we can begin to understand the powerful role that beliefs play in our lives. From the standpoint of our minds, a psychologist would say that a belief is nothing more than an idea that we have consciously accepted as true and ingrained as part of our subconscious conditioning. So if we are holding on to beliefs that limit us and keep us from taking action on a life changing idea, with the proper awareness, we can make the conscious decision to formulate a new belief that supports us in our big life goals.

I think it is both healthy and wise for every person to take time out regularly to examine their habits of thought. Since this article is centred around the idea of financial goals and money, I would encourage you to step back and review your personal thought processes when you were introduced to the idea of ’20 Months to One Million’. If you rejected the idea as something that was unrealistic or out of your level of capability, take some time to examine the belief you are holding that is causing you to reject the idea. What other limiting beliefs have crept into your mind that are no longer serving you? Can you replace those beliefs with a more empowering and gratifying thought pattern?