Magic Penny

Would you rather have a million dollars today ... or a magic penny that could double itself every day for thirty days? Its a trick question of course, designed to fool those unfamiliar with the awesome power of compounded growth over time. The financially astute option is to take the Magic Penny. Why? Because a penny doubled thirty times over exceeds five million Dollars. Here is how it arrays out on paper.

Day 1 = $.01  Day 2 = $.02  Day 3 = $.04  Day 4 = $.08  Day 5 = $.16  Day 6 = $.32

Day 7 = $.64 Day 8 = $1.28 Day 9 = $2.56 Day 10 = $5.12  Day 11 = $10.24 Day 12 = $20.48

Day 13 = $40.96  Day 14 = $81.92  Day 15 = $163.84  Day 16 = $327.68  Day 17 = $655.36

Day 18 = $1,310.72 Day 19 = $2,621.44  Day 20 = $5,242.88  Day 21 = $10,485.76

Day 22 = $20,971.52 Day 23 = $41, 943.04  Day 24 = $83,886.08 Day 25 = $167,772.16

Day 26 = $335,544.32 Day 27 = $671,088.64  Day 28 = $1,342,177.28  Day 29 = $2,684,354.56

Day 30 = $5,368,709.12 ... amazing is it not?

                                                                             Roger L. Caron

Golden Years

Many folks believe the "ball game" is over when they reach retirement age when its not. Increased longevity for many seniors could lead to decades spent in retirement. Sufficient time to build significant wealth during post-work years. How? by living a wee bit below actual retirement income.

The key to prosperity is the same regardless of chronological age. Income is income and if you're not saving a portion of what is received, its not possible to advance. The bottom line .. its not what you receive that matters, rather what you keep that counts.

                                                                 Roger L. Caron

Wallet & Wheels

Be very cautious when driving and make certain your auto registration and insurance are current should you be stopped by the CHP. As you know California is in a deep financial hole, and trying hard to to collect more money from wayward drivers. For example: failure to use a seat belt $148, roll through a stop sign $214, run a red light $436, pass a school bus with a flashing red signal $616,  park in a handicapped zone, sans permit $976; second offense $1876.  Highway Patrols are under pressure to issue more tickets, so be especially aware of tougher enforcement of all DMV rules and regulations.

       Roger L. Caron

Dollars & Sense

Think long and hard before co-signing on a loan for a friend or relative. Why? because its a three-way transaction between the borrower, you and the creditor ... that can come to bad end. Don't co-sign unless you're willing to pay back the loan yourself. Because as co-signer, you're equally responsible. In the event the other party defaults, the creditor will look to you to make good on the debt. Often you won't find out the borrower is late on the payments until your own credit is blemished, and thus damage a relationship with someone you sought to help. if you want to assist another financially do so only with unneeded cash and consider it gift, that way there will never be any cause for hard feelings.

                                                                      Roger L. Caron

Bank Account

A poignant story with a meaningful message: A 90 year old man who dressed himself each morning, hair combed and perfectly shaved even though legally blind, moved to a nursing home ... his wife of 70 years having passed away. After a long wait in the lobby, he smiled when told his room was finely ready. As he maneuvered his walker to the elevator, a staff member provided a visual description of his room. “I love it” he stated with enthusiasm ... "but you haven't seen the room yet" said the staff member.

He responded “That doesn't have anything to do with it ... happiness is something you decide on ahead of time. Whether I like my room or not doesn't depend on how the furniture is arranged, it's how I arrange my mind. I already decided to love it. It's a decision I make every morning. I have a choice, spend the day in bed recounting the difficulties I have, or get up and be thankful for all the happy memories I've stored away … Just for this time in my life”. 

Old age is a lot like a bank account ... We can only withdraw from it what we put in. 

                          Roger L. Caron

You Can Get Rich

The idea that your chances of getting rich can be calculated is a fallacy, based on the idea there is a finite amount of wealth in the world. In reality, there is no cap on the number of people who can become millionaires. In fact, if you live in the United States you have a far better chance than most folks on the planet of becoming wealthy. According to a report issued in 2010, America is home to three million plus people with a net worth in excess of seven figures, representing one third of all global high net worth individuals.

- Being out of money is a temporary situation “Broke” is a state of mind -

                                                   Roger L. Caron

"Big Hat - No Cattle"

The Texas expression “Big Hat - No Cattle” refers to looking good versus having substance, a pithy though derisive remark, that carries a noteworthy message ... one that brings to mind an illustrative parallel from my youth.

In my collage days my driving demeanor was one of wild abandon. Speeding through an unmarked intersection, I was the cause of a major car pile up. Fortunately no one suffered serious injury and though bazaar, the other driver was deemed at fault. I knew otherwise, of course, but wasn't going argue the point having just wrecked my dad's new pick-up truck.

And here's where the story gets interesting. The other driver's insurance company not only took care of the vehicle repairs, they paid me five thousand Dollars to sign a non-injury release form. The irony of what followed is a life lesson well worth sharing.

Five Grand was a lot money back then and as the saying goes, it was burning a hole in my pocket. So I rushed out and blew the entire amount on General Motors most expensive model. Although I didn't realized it at the time, it was the personification of “Big hat - No Cattle.”

Had I instead taken my financial wind fall and invested in a few “blue chip” companies like Procter & Gamble, Johnson & Johnson, Coca Cola, etc. The same $5000 would have grown to $500,000 today.

In other words the fancy car, long gone to the junk pile, in reality cost me a half million dollars! Had I shown a bit of restraint and purchased a new Chevrolet for $2,500, the lost opportunity cost would have been reduced to a quarter million dollars. Experience is an excellent teacher but can often exact a high price.

The message: the choices of today beget the outcomes of tomorrow ... for better or worse.

                                                             Sincerely, Roger L Caron