(Continued from: “Dinner In Hawaii or Just a Candy Bar?”)

Each dollar coming into our hands has a huge potential that is either released skyward for great wealth in the future, or it’s killed on the spot through reckless spending. Or, third scenario, it experiences an outcome somewhere in the middle—quantified on a giant scale of possibilities from bad to great.

It all happens the moment we make a decision about what to do with any given dollar, a decision that will have a direct impact on our future, whether positive or negative.

It’s not just an issue of the cash in our hands; our dollars are scattered all over the place within the diverse categories of our lives. Beyond just having money in our pockets and in our savings accounts, we also have dollars resident within our house, within junk in the attic that can be resold, within our cosmetics, our power tools, a mutual fund, and even in a candy bar. Each dollar at any given moment has it’s very own “Future Magnitude” whether we see it or not, whether positive, negative, or neutral. And, of course, debt represents negative dollars that are stealing money directly out of our future like a giant vacuum cleaner from hell.

When a dollar is consumed or wasted, such as when we buy that candy bar we didn’t need, that dollar is gone forever, and it takes multiple dollars with it out of our future.

How we view money is the central engine that drives people to millionaire status or causes us to struggle financially. What we do with each dollar emerges from our own personal “dollar view”. Therefore, we need to view money like we never have before.

Let’s illustrate “Future Magnitude”…

Imagine a 25 year-old guy named Benji. He buys a candy bar for a buck. He devours it in 35 seconds, gets a brief sugar buzz, and then it’s forgotten. A day later he doesn’t even remember the incident or recall what brand of candy bar he ate.

FREEZE FRAME! …What just happened?

That candy bar just took $53.70 out of that kid’s future. What could have happened instead of the candy bar purchase is that the very same $1 bill could have been transformed into a great dinner for Benji and his future wife, Shaun, 40 years later—at the age of 65—when they will sit in an outdoor restaurant on the beach in Maui, enjoying the beauty of a dusty-rose sunset.

The scenario of what could-yet-be is stunning: Benji’s future wife orders grilled salmon with a teriyaki glaze alongside Orzo salad. Benji selects a 20-ounce prime rib with garlic mashed potatoes. Both of them enjoy exotic fruit tea. As they savor their meal, the foamy waves gently cascade on the rocky coral reef below. Shuan gazes into her husband’s eyes, so grateful for the care he has given her over the years—and now they both luxuriate over this fabulous meal to cap off a wonderful week in paradise, celebrating their 40th wedding anniversary.

This is a gilded romantic moment Benji’s wife will keep in her heart for all of her days. And this meal, destined to become her favorite culinary experience of all time, was the result of Benji’s wise use of money in his youth.

Or, instead…forty years earlier…

…that magical meal could have been obliterated in 35 seconds in the form of a hastily-devoured candy bar. That’s a drastic contrast between the glorious future potential of a single $1 bill or its sudden demise as a snack. Confirm the math yourself: find an online savings calculator. Put in $1. Estimate an annual return of 10%, compounded monthly, (not uncommon for active trading in the stock market for the long term), and project that out for 40 years. What you get is the price of a fabulous dinner for two.

And that is only ONE dollar! Imagine a lifetime habit of carelessly tossing around many of our dollars so that they get instantly consumed in like manner, instead of reaping the rewards of Future Magnitude.

The time we need wealth more than ever is at the conclusion of our earning years as we’re getting older. That’s when we have less energy to work, and we just want to play, rest, travel, and enjoy a sense of reward after a lifetime of work. But all that potential can be eaten up, one proverbial candy bar at a time, during the earlier years.

This is not an argument against candy bars, enjoying lattes, or having thrills at a theme park. The purpose of this illustration is to begin a re-calibration of how we think about money while focusing on the value of a buck. In short, every dollar is a potential time machine, not just “mad money”—something to get rid of during an impulse shopping spree.

So now that we’ve affirmed the value of enjoying lattes, let’s use that familiar illustration of a latte a day at a cost of $3.75, because it does illustrate a good point. What is the Future Magnitude of those dollars? If we had invested our latte money for 40 years, on a daily basis of $3.75 at 10% annual return compounded monthly, we would have gained $733,240. Cool.  And that’s just latte money.

Think of each dollar as a soldier. If he gets consumed (or killed in action), he has no children, grandchildren, or future progeny. He dies alone. But if the “soldier dollars” survive, and they kill the enemies of debt and fiscal recklessness, they can fight for us, and conquer new territory for great adventures.  Those “soldier dollars” can get married and reproduce multiple offspring into the future.

A buck is not a buck. A single dollar is a genetic powerhouse capable of creating generations beyond itself that keep growing and growing and growing.

One final word of hope: many of us are coming to the realization too late in life how we’ve messed up with money.  Many of us no longer have 40 years for $1 to become $53.70. So the strategy we must adopt, in order to make up for lost time, requires that we become more aggressive and take greater risk…not stupid risks, but properly-managed risks. If we have an account, for example, that can give us 10% return a MONTH instead of 10% per year, and we invest $3.75 a day at that rate, how long will it take us to get that $733,240 as mentioned in the above example?

…Just over FIVE AND A HALF years, not forty!

Before the big financial downturn, I was trading stock options and getting more than 800% annualized return.  Admittedly, it was a nice bull market!  But stock options are one way people can get very aggressive with their financial futures.  When the bottom dropped out of the economy starting in 2008, I discovered vulnerabilities in my system and pulled out.  Since then, I’ve been planning my stock options strategy to be more equipped to generate gains in a dramatic, global-wide crashing bear market.  It’s my hunch that we’ve got several of those in the years ahead!  However, options is one way you can make money no matter which way the market is going—at least potentially.

The purpose of this blog post is to help people start thinking outside the box, and realize there’s more to money growth than 1% at your bank (which is actually loss), or a few points higher in your 401(k).

My suggestion to any weary souls out there who can only think in terms of working more hours at more jobs in order turn their finances around and/or generate wealth is to consider training in this whole new arena.  Stock options is a perfect consideration for some, though not for everyone; it’s not for the weak of heart.  Think of it as a Class 5 White Water Rafting Ride!  For me, it’s a thrill!

In fact, let me suggest two great sources of online training, one for stock options (that Class 5 White Water Rafting–requires some Indiana Jones in your blood), and the other for effective stock investing (Class 2 White Water Rafting–less adrenalin required).  Please know two things: (1) there are never any guarantees of success, only potential.  And, (2) know that I don’t get a commission if you decide to take either of these avenues; these companies won’t even know that you came via my blog.  (There may eventually be some little widgets on my blog that generate pocket change, but these are not in that category.)

Stock Options (higher cost training, high velocity ride, radical gain potential): http://dtitrader.com

Stock Investing (very affordable, slower ride, good gain potential): http://www.vectorvest.com

A quick note about VectorVest: it’s the only service that combines the power of fundamental valuation with the insight of technical analysis. VectorVest analyzes, sorts, ranks and graphs over 18,300 stocks daily for Value, Safety and Timing and gives a Buy, Sell or Hold recommendation on every stock, every day.

DTI / Stock Options: I urge those with interest to sit in and listen to some of DTI’s free webinars.  It just might give you hope in a very bleak world getting worse.  Think about it: when you consider the idea of learning how to make profits when the market is crashing—THAT, dear folks, is a very redemptive thought, and it can lead to dramatic freedom!

Some of my best trades have been buying “puts”, a tech term for being able to make moolah when a stock goes down.  I think my best “put” trade actually doubled my money in just nine days.   Of course, there are no guarantees with the stock market and trading options.  On the other hand, there ARE gigantic opportunities, and the more training you have, the more you can mitigate risk, and the more you mitigate risk, the more you’ll find that profits take care of themselves.

VectorVest: They are simply fabulous, ALMOST–but not quite–paint by the numbers; you still have to make wise decisions.  Even if you don’t think you have an aptitude for stocks, they are very good at hand-holding and guiding you every step of the way.  My strategy with stock options actually incorporates information I get from VectorVest as well as from other sources.

In closing, one new camera angle on risk you might not have considered: doing nothing, or doing only what’s considered “safe,” could end up being the greatest risk imaginable.

© 2011 Bob Anderson