The concept of Monopoly Money was introduced by my friend Bill last week during a business conference. While it may seem out there at first glance, the more you think about it, the more it makes sense.
The concept is that by saving money during your growth phase, you are hindering your ability to reach your goal. For example, if you goal was to make $10,000,000 within 8 years, any money that you place on the side as a safety net is hindering you. If you make $1,000,000 in year 1, you should put forth all $1 million into your goal to hit the $10m goal. If you put $500,000 aside for a rainy day and use $500,000 to move forward, aren’t you slowing down your speed?
My goals are on a much smaller scale, but let’s look at my gold coin investment. I view the gold coin as a hedge against inflation, a safety net investment. In fact, you could say that all my stocks and mutual funds are the same thing.
If I can truly take $1000 and open up an ebiz store that makes $1,000 a month, why wouldn’t I put 100% of my saved money into opening as many stores as possible?
Think about it. If I have $50,000 saved up, why not open 50 stores if I can make $50,000/mo with it. At that rate, my $50,000 in savings looks like a totally losing situation.
This is the concept of Monopoly Money. When you play monopoly you buy every property you land on. Why? Because you know that its a game and there is no reason to save your money. The object is to win the game.
While I cannot fully embrace the 100% monopoly money concept, I can understand it and at least begin to implement it. Thinking about monopoly money, my $200,000 goal seems sort of small now, doesn’t it?