Can Cash Gifting Make You A Millionaire?
The following post appeared on Dead Reckoning, by John Berry:
Being a Millionaire is a desirable destination for many. As with any destination, you have to choose a suitable route in order to arrive at the right place. Take Cash Gifting as an example for a route to be a millionaire. We can use becoming a Millionaire for a real life application of Dead Reckoning and how it comes into play.
In reality, most people don’t know where they’re going, much less really understand where they are. We won’t get into that but just to prove my point ask a random sample the classic interview question: “Where do you see yourself in 5 years” and you’ll more likely get silence or at best some vague meaningless answer. The destination is the easy part of Dead Reckoning, you answer a simple question - Where do you want to get to from where you are? If you want to apply this to life this can refer to things like your job or career. With a destination in mind you simply have to determine how you get from where you are to where you want to be.
Now since we determined our destination as being a millionaire, we need a refinement our specific destination. Does that mean make a million dollars a year? Have a million dollars in the bank? Own a million dollars in assets? For simplicity we’ll take making a million dollars per year. How many people do you think say they want to be a millionaire, but never do two crucial things:
1. Define and breakdown what it means to be a millionaire
2. Evaluate if they can actually get there from where they are.
Clearly number 2 above is where this Dead Reckoning concept comes in. But it also involves number 1 as well because that’s the path, how you know if you’re on track.
To make exactly one million dollars a year means you have to average the following:
$1,000,000 per year where a year is defined as twelve months can also be taken as
$83,333.33 per month (change not included) or based on 52 weeks in a year
$19,230.77 per week or based on 365 days in a non leap year
$2,739.73 per day or since most of us think of a wage per hour
$114.16 per hour.
At this point we run into the people who would point out the flaws in this analysis, because it is not based on how people work. We do not all work every month, most do not work everyday, and we certainly don’t work every hour out of the 24 available. Obviously math is math and these numbers are correct, but those people must acknowledge that using that line of thinking the numbers rise. That means a person expecting to make a million dollars a year would need to exceed these numbers to hit that mark given less available time.
Enter Dead Reckoning…
What are you currently making per year? Typically CEOs see income this way.
What are you currently making per month? Typically professionals see income this way.
What are you currently making day? Typically contractors see income this way.
What are you currently making per hour? Typically seen this way by non salaried.
If you can answer any of these you have your present position versus where you want to be. Based on common census numbers that say the average annual income is around $34,000 for the USA you should see a pretty big gap. When you realize the hours involved in that $34,000 are far less than those in the calculation above, that gap is even wider.
In reality, the size of the gap is not what’s important, it simply defines the present position. To understand what this means think of a trip. Once you know how far it is to where you intend to be you decide on the best means to get you there. No one wants to walk from San Diego to San Francisco, but that’s a more acceptable scenario than walking from San Diego to New York. Those two are actually at least possible, you can’t walk from San Diego to Shanghai. Now that you know that you cannot expect to reasonably make a million dollars a year based on your current course, you have to adjust. That adjustment involves choosing the proper vehicle(s) to get you there.
Cash Gifting is simply one potential vehicle. The question here is whether or not Cash Gifting can make you $1,000,000 per year? Are there other ways or vehicles? Of course, but this is about this particular vehicle.
Cash Gifting programs range all over the place, the most popular ones have people receiving anywhere from $150 to $500 to $800 to $1500 to $3500 to $10,000. There is a government guideline for the IRS that limits individual giving to $12,o00 per person annually that most try to stay well below.
Just based on these we see that at $150, if we received one every hour for 24 hours a day we would be receiving well over $1,000,000 per year. The reality is that is not very likely or reasonable to expect over the course of an entire year, but it’s not impossible. If you have to communicate with each one it’s worse.
The attractive number is $2,739.73 per day. This total is less than one of the $3500 gifts per day or two of the $1500 gifts. That looks possible. If you can average just one $3500 gift per day, you would receive well over $1,000,000. There are businesses and salespeople who make a sale a day all over the place. The key here is just like companies that have high margins, less sales, but more money, probably less work.
This could go on, but the basic answer is clear, using the right Cash Gifting system can make you a Millionaire.
