Double a penny a day and you will come up with a pound after about a week. Now, double that dollar up and keep going. After three weeks since you have started doubling that penny, you will have just over £10,000. Keep going and you will reach that million straight away.
It is definitely an appealing strategy. It sounds so easy in the first place. After all, you do not even need to start with a penny. You might as well start with £100 to make it easier. The real struggle begins once you reach a high amount of money – doubling that is difficult.
Now, it is worth noting that this idea works with pretty much any currency. You can double a cent a day and make a million dollars in no time. You can double up any subdivision of any currency and the result will be the same.
The modern version is far from what this classic piece of wisdom claims. The modern version implies you getting taxed straight away. Once you have doubled up that penny, you will no longer have two pennies by tomorrow. If you live in a high tax country, you will be lucky to even come close to that.
Even if you are economically savvy and a financial expert, this strategy becomes quite irrelevant if you are about to lose money to tax on a daily basis. This article will show you how to double a penny for 30 days and actually manage to keep most of your money.
Understanding the concept of compound interest
Compound interest is a topic that most people will not understand. It is mostly aimed at those with some experience in finances, as well as those who like mathematics. Now, compound interest can be described as interest on interest.The problem is that the system we live in is so sophisticated that most people never see it happening. Sure, everyone knows about taxes, but the government is literally robbing you by charging interest on interest. You never know how it works until you see it happening.
You are more likely to see this issue when you think about how to double a penny for 30 days.
You have probably been asked before – would you like $1 million or the possibility to get $150,000 a week for a year? Sure, the question may come in different forms, but the right answer is always the same. Most people choose the big chunk, but being patient could give you much more.
When it comes to the classic penny example, if someone gave you a million in a month or you had the option to choose the penny, you would get over five million by the end of the month. Now, this scenario does not involve the actual interest.
Forget the government and do it yourself. Get interest on that penny yourself. This is how compound interest works if you use it in your favor. You keep getting interest on the initial investment, not to mention interest on your interest. You will grow your money much faster.
There are more versions of this piece of wisdom, but the general idea is always the same. Get a small amount of money and let it gain interest. Save everything, of course, and you will come up with more money than if you actually accepted a large amount in the first place.
How to double a penny for 30 days – The modern version
This concept might have been an interesting idea ages ago, but things are different now. You will pay taxes for whatever you make. In other words, the modern version of this story is triple a penny a day for 30 days, only so you can have enough for taxes.The first challenge is finding something that gives you a solid 50% interest rate on a daily basis, which is quite difficult. Then, real life kicks in and all sorts of difficulties will bug you – taxes being some of the most common ones.
Whether you work or you have a business, there are times in life when everything seems perfect. You gain momentum and you make money – you put that money back into it, so you can make it grow, whether it is a cryptocurrency account or a business.
This is a different version of the penny story because what you do not realize is the fact that you actually try to take advantage of compound interest – if it works in your favor, of course. With time, you will make decent amounts of money, but it is just not fast enough.
Taxes are some of the most problematic issues out there. No matter what school you go to, they never teach you about taxes. No government wants you to know how to manipulate taxes and figure out ways to avoid it. Unfortunately, taxes can cripple you, hence the necessity to educate yourself.
Imagine paying 20% in taxes or even more – up to 35% in some countries. Double your penny a day and you will get less than what you need. The more you do it, the more money you lose too. At some point, it may not even seem like a good idea anymore.
In theory, you would make over £5 million if you learned how to double a penny for 30 days. If you paid interest on your profit on a daily basis – assuming you pay about 35%, you would only have £20,000 by the end of the month. Exactly – the government would rob you of millions.
Of course, the theory is not that easy to apply because doubling your money on a daily basis is nearly impossible. Then, there are other factors that may affect the result, such as employees, salaries, inventories and so on. As a business person, you tend to be more careful about large expenses.
The point is taxes are often overlooked. The bad news is that such taxes may not seem like some of your largest expenses, but they will definitely add up with time. The process is gradual, so this is why you cannot see how much money you actually lose.
More tax, less money, less investments, slower growth – this is how it works. The idea is that if you live in a high tax country – take the USA or Australia, for example, you will not be able to grow your wealth because lots of money goes into taxes.
Furthermore, such countries put social pressure on you. You tend to spend money because everyone else does. Even if you are actually doing fine, you will lose money on things that you do not necessarily need.
There are people out there who earn hundreds of thousands a year. While that would be a nice amount of money to start expanding wealth, they feel obliged to move into nicer areas, buy nicer homes and invest in a proper car. However, these so called investments do not always make sense.
As if all these were not enough, taxes also kick in and grab a big chunk of that money. You get the point then – there are people who make a fortune, but at the end of the year, that fortune is spent on irrelevant things and they end up with nothing.
How to double a penny for 30 days – Changing the game
Take a minute to do the math and figure out how much money you have spent in the last years on taxes. It is a fortune. Think about the day you started working and see how much money your government has literally robbed you for.At this point, just like other entrepreneurs out there, you are probably trying to find ways to get out of this trap. Forget about status symbols – a car or a house, but also about tax. You need to avoid all these in order to grow your wealth.
The answer is quite straightforward – you step out of this situation and change everything. It is easy to say it, but applying it is completely different. You will need to lose your status and find ways to optimize your tax.
There is definitely a rat race out there and most of it targets the status – irrelevant and likely to help. It sounds hard to believe it, but most people buy things they do not need to impress people they do not like. Funny, but true.
The tax burden is not to be overlooked either. This concept also needs optimization. Now that you know how much money you have lost over your working life, you could have probably invested it and turned it into millions.
It is never too late to wake up – never too late to start either. Some changes will be needed and it all begins with your mindset. You need to get out of your comfort zone – perhaps move out of your country, for example. Then, slowly remove yourself from the social burden – buying things that you do not need.
From this point on, it is time to take some action. You may need to give up on your citizenship – if you are American, you probably know already that this is one of the last countries on earth that will tax your citizenship. It makes no difference where you live, work or pay tax.
You also need to educate yourself on different offshore jurisdictions and actually take advantage of tax shelters. You must optimize your tax accordingly – live somewhere, get tax residency somewhere else, start a business in a completely different country and so on.
There is no such thing as a strategy that will work for everyone. Instead, you need to figure your own necessities and circumstances. Bottom line, the goal is the same – lowering tax and actually boosting the personal wealth.
Back to compound interest, it works in two different directions. It can be the driving train to boosting your wealth in no time. But then, it also refers to small things that will affect you from a different direction – such as status symbols that will ruin your earning capability.
Such issues will not affect you when you buy them only. Instead, they will also affect you in the long run – less money, less opportunities. For example, you may need to sell a business for less money because you did not have enough money to put into it.
Back to how to double a penny for 30 days, this concept is not extremely viable in today’s society and tax and social issues represent the main problems. Even if you had no tax and you lived in a hut in a jungle, it would still be difficult to find such a good opportunity.
Now that you get the point, here are some interesting things that may work well for some people, but they may also be disastrous for others. These are some of the most popular ideas out there and no matter what you are after, they must be analyzed in small details.
Invent or invest
By this point, you probably ask yourself – will this strategy to work? Learning how to double a penny for 30 days will get you to rush and try to find strategies, only to realize that they may not necessarily work. The world is different today, so no matter where you are in life, you want to know if it is possible.Now, to keep it simple, if you actually leave your money in an account with great interest rates in a country with no tax on this income, chances are your income will multiply and gain in size. This is what all these double pennies are about.
Give your money a few months and the account may look pretty nicely. However, there are a few different ways to understand how a penny a day works. There are ways to figure out how to expand your wealth without too much work.
Some people may believe that gambling could be the only way to do it. Sure, it may work. But on the same note, you are more likely to lose everything than actually win something out of this experience. Therefore, you might halve your penny, so it is not really a good idea.
What options do you have then?
Exploring the stock market
The stock market is one of the most popular investments out there. It can skyrocket, but you can also lose money – just like with any other investment out there. If you do it right, you could easily get back with about 10% on a yearly basis.So, learning how to double a penny for 30 days will get you to £20,000 in a month. You can then forget about it – assuming that you are good enough to do it. Your money will then double up every seven years or so.
Now, imagine starting with £20,000 or $20,000, whatever currency you have. Imagine you are just 30 years old. By 37 years old, you will have £40,000. If you take a minute to do the math, you basically double a penny every year.
By 44 years old, you will have £80,000. By 65 years old, you will have £640,000. If you start this venture at an earlier age, results would be even better. By the time you retire, you may actually have your million. You have built up from magic pennies.
Now, when investing in the stock market, you need to be extremely careful. Such investments grow over long periods of time and the bad news is that long periods of time see companies coming and going. Companies that seem impossible to destruct these days might be gone by the next 10 years.
If you remember the crisis in 2008, the markets were practically overbought. As a direct consequence, many companies were simply wiped out. Things can change overnight and you need a flexible plan and a diversified portfolio.
Lending money
No, this is not about becoming a loan shark. You do not want to end up chasing people for money they owe you, hiring debt recovery companies or even worse – going on the illegal side of such an apparently profitable business.Lending money is not a bad idea though because it makes your investment work for you, rather than have you struggle. This option is quite sophisticated and requires a solid legal background – or at least a good starting point to ensure you make enough money.
Keep in mind that you will also lose some money in the long run.
Assessing the 401(k) plan
Now, this option is like a sword with two edges. You can practically deposit money in an account that the government has full control over. The government is bankrupt – everyone knows it. You never know whether or not you can still have the money by the time you retire.
On the other hand, it may also work if you do things right. Put some principal in a classic 401(k) plan. As a direct consequence, your taxable income will be lower, so you save some money on tax. After all, you must meet the overall purpose of income tax.
When you work for a company, you can also have your director match the contribution. This is not always a general rule and things may vary from one company to another, but it is totally worth checking. In most companies, part of your contribution will be matched – usually, at least to 50%.
This alternative usually comes with a cap. You cannot be matched all the way up, but with a limit. For example, if you contribute $1,000 to your plan, you may get your employer to contribute another $500 to your account.
Taxes will also be reduced if you put money in your 401(k) account. If you are part of the 25% marginal tax category, you will get about 25% of what you contribute overtime. You get the point – you pay your taxes, but your contribution will be deducted, so they are reduced.
Going the extra mile
While the above mentioned ideas will work for average people, the truth is a professional will seriously get out of the comfort zone and take things to another level. The point is to lower tax or at least reduce it to a minimum.If you are severely taxed, you can change the country. Got a business? An international one? An online one? Move to a country that does not tax international income. You can register the business in a country with no corporate income, for example.
There are lots of opportunities out there, but you will have to leave everything behind – your family, parents and friends. You will need to get a home in a different place – maybe a place where you cannot even speak the language.
You will need to educate yourself, invest in one place and the other and diversify your portfolio. Moreover, you must always get ready to relocate. Things and laws could change relatively fast and nothing is 100% secure these days.
Learning how to double a penny for 30 days will not be that easy if you live in a high tax country.
Conclusion
As a short final conclusion, doubling a penny for 30 days will not give you the millions you deserve – assuming you actually find a solution and can double the money so often. Tax will cripple you and your social status will also need to be fed.Forget about all these things and educate yourself, then get out of your comfort zone. It may seem difficult, but it is incredible what you can achieve once you explore all your opportunities out there – especially in a society that is so interconnected that you can almost go, live and work anywhere.
