This is a fantastic example of the power of compounding returns. I say returns because for this to work, you have to actually do something and you will receive the reward in return. Now, you can of course take some money, reinvest it and still receive a reward, however it simply won’t be as accelerated as this example.

Doesn’t everyone want a million dollars? No, well at least some people do, but most don’t have an actual strategy, aside from win the lotto, inherit it or just wait until you retire and hopefully there will be enough in your superannuation. That is if the government hasn’t changed the rules by then.

The first thing I’m going to show you is that mathematically, this is possible. You need to forget the how for now, because we will get to that. I want you to think about having $0.01 cent. Now, imagine you could turn this into $0.02 cents tomorrow. You might buy something for $0.01c and sell it for $0.02 cents. You might save an extra $0.01 cent on a purchase, but in any event you now have two. You have doubled your money in ‘One Move’. Now I want you to think about turning $0.02 cents into $0.04 cents. Then 4 into 8 and so on.

Guess what, if you do that 27 times over, your one cent will become one million dollars. You can work this our manually if you like, or grab a calculator, or just believe in the power of excel because I’ve done it for you below.

Now, there isn’t much around to buy for one cent and so grasping this concept is a little hard. Even by the time you get to $1 (that’s 8 moves by the way) you might think this is not worthwhile, so let’s start with something most people can deal with. Imagine you had $10, could you turn that into $20 somehow? Could you buy something on ebay.com and in turn sell it for $20? What if you could, what if you just happen to be good at something, or have a lot of knowledge about pricing or are handy with repairing things? What if you bought an old heater or some tools and with a bit of work, you fixed them and sold them?

Now, if you did this with one item, could you do it with 4?

Let’s say you turned your $10 into $20 and then that into $40. Can you buy the same thing, 4 times at $10 and sell them at $20 and now you have $80.

This simple process is what retailers do every day, just on a larger scale than you right now. Think about it, the door lock you just bought at Bunnings for $15 might have only cost $5 so actually they tripled their money. Of course they have large costs as well, but think about how to apply this to your own circumstances. The really interesting part starts when you have enough momentum that you have created $5,000 and then $10,000 (that’s move 21 by the way).

What are some larger ideas?

At $250,000 – buying a piece of land (somewhere) and splitting it and selling it off for $350K total – okay, it’s not doubling, but it’s a great return.

At $350,000 – buying a renovator in a regional location or outer suburbs and selling it for $450K – again, not doubling, but you get the picture or

At $450,000 – buying 4,500 of those items you got for $10 and selling them at $20 again and making $900,000.

What can you do with something small to make it grow?