What is the Big Play? The big play is that investment that gets you excited and it's a little scary. It's almost a sure thing when you pull the trigger. Now by saying a sure thing I mean you did the proper research on your investment. You know the risk and the reward. You have contingency plans on how to protect your investment and you are not speculating or gambling.
The problem with the big play is that most people do not prepare for it. They do not have the funds or access to the financial resources for the big deal. The deal of a lifetime happens every week for those who can act on it. Deals are like money. They go to the people who pay the most attention to it. Are you ready to save for Your Big Play?
Playing Too Small
People are playing too small. They never invest enough for the big payoff. When you invest pennies and nickels you usually get a return of pennies and nickels. Small investment = small return. Large investment = big payoff.
"People never create wealth because they never invest enough in a deal to get a big payoff". – Grant Cardone
People do not create wealth because they do not invest large enough into a deal to get a huge payoff. Creating wealth requires a surplus of cash and confidence. Sure you can create wealth over a long period of time with small consistent investments. You have seen the graphs of how your money can grow with compound interest. But I am talking about creating wealth now.
$ 100k Your First Target
Grant Cardone says you should save $ 100k before you make your first big play investment. Now he is not set in stone on that figure but that is a target most people can achieve with discipline.
Furthermore, to save that much you have to find ways to increase your income and it gives you time to study income-producing investments. Also with that time and discipline, other opportunities will open up for you.
5.5 Steps to Saving for your Big Play
1. Write Out Your Plan – Money gets bored and goes to the person who pays attention to it. Write out a plan on why you are saving for your big play and what you will invest in. If you do not have an investment idea yet that is OK. It's important that you make a commitment on paper that this money is for wealth creation only.
Money with no plans magically vanishes. You have experienced this before. Whenever you had extra money lying around it went quickly. The pizza man got it, you had to go to the new restaurant, a family member was suddenly in need, the kids needed stuff, and well … life just happened. Commit in writing how the money will be used.
2. Increase your income – You will never get wealthy without increasing your income. People miss this point. They start to save, cut back on their expenses, and pay off their debt. But they never intentionally increase their current income. Dave Ramsey, the creator of Financial Peace University says, "Income is your key to wealth". The more you can increase your current income the more you can save.
Look for opportunities to increase your income at your current job. Can you generate more tips? Are they bonuses you are missing out on? Can you perform other duties? Could you bring in more customers? Is overtime available? Can you get paid on referrals? How about getting a second job?
3. Cut Expenses – Another way to create surpluses of cash is to come up with a monthly budget and cut all the expense that is holding you back. Go through your monthly bank and credit card statements. There is crap on there that you did not need to buy. Cut back to the bare minimum. Do not go into any more debt. Certainly, if your spending is out of control. Go get help. Understand there is hidden money in your monthly spending. Go get it.
4. Open Up A Sacred Account – This is an important step. Open up a high-interest savings account. This is the start of your savings plan. I recommend an online bank with a limited number of transactions per month. Importantly, an account where it takes a couple of days to get your money. Limited access will curb your impulses.
Give your sacred accounts names also. This makes it real and personal. I call my sacred accounts The Big Play, The Big Dividend, and Sweet Jesus. These accounts are sacred. You do not ruin sacred ground. Once your money goes in that's where it lasts until you are ready to invest.
Understand emergencies happen. The temptation will entice you to dip into your sacred accounts. Opportunities will arise that will be calling for your money. This is why you have a written plan to keep you on point. Do not dip into your sacred accounts. They are off limits.
5. Decide on how much you will save each month – I teach my students to come up with a monthly budget that they can live upon. Then we put all the extra money into those sacred accounts. We Save It All. Income spikes, income surges, increases, bonuses, and extra windfalls. Save It All! This is not the time to buy shiny objects.
Increased income goes into the sacred accounts too. This is why you have created a budget. All the extra money from eliminating spending and increased income will grow quickly. I have seen students who cut $ 1ka month from their spending and add it to their sacred accounts.
5.5 Earn and Learn – IDEA + HARD WORK x TIME + DISCIPLINE = SUCCESS. This is the success formula. Use it to build your sacred accounts for your Big Play. Learn while you earn. Study investments, read books, go to seminars, and prepare yourself for Your Big Play.