The Power of Small Numbers

Earlier tonight, I had a thought while I was in the shower, don’t worry, this thought had nothing to do with soap, or scrubbing.

The thought centered on work and income; I was amazed to realize I’ve earned roughly $42,000 coaching soccer.  I have coached soccer for the past 12 years, earning around $2,000 the first year and about $4,500 this past season.  A little mental math gave me the surprisingly large total.

Really?  Coaching?

I’ve deposited in the bank $42,000 from coaching, amazingly that is about 8,000 more then my first year teaching salary.  I’ve earned more then my starting salary by having fun, and doing something I thoroughly enjoy.

Suddenly, I began to once again appreciate the power of small numbers, you see all this money was deposited in my account, twice per year over the course of 12 years, I was surprised by the total, because the individual deposits weren’t really that impressive, in fact they have roughly been equal to a regular paycheck.  Essentially, coaching has allowed me to earn two extra paychecks each year.

Adding two extra paychecks each year for 12 years has added up to some big time cash.

Unfortunately, this thought quickly lead me to examine a what-if scenario.  You see, 12 years ago, I also coached the freshman basketball team.  This experience tested my abilities, as my team tended to score less then our opponents.  This was upsetting, as basketball is a sport in which the high score wins.  For this reason, along with an inconvenient practice schedule, I quit coaching basketball after two seasons.

I don’t regret the decision, but some back of the envelop math reveals that I’ve also walked away from, what would now add up to roughly 40,000.

I felt sad for a second, and a bit shocked, but quickly moved on because at this point in the financial process, I’m all about moving forward, and finding ways to reach our family goals.  So shifting gears, I began to examine other ways in which the power of small numbers is positively impacting my future, knowing that those seemingly small numbers can grow quite large over time.

I am currently earning a little over two paychecks per year in total dividend income.  This is exciting, but the real power of small numbers is revealed when I look at the payouts of individual stocks over time.  Some payouts have doubled, without me adding a dime to the origninal investment, while several others are close to doubling.  Mind you I’ve only owned individual stocks since 2011, so to double ones money in roughly 5 years time is incredible, especially for someone who is only 34.

 Hopefully, I have many more 5 year blocks left, assuring these investments ample time to grow and grow.

Another small number was earned though my use of credit cards, which paid out 1,714 dollars in the past year so far  (I’ve earned another 200$, but I’m still waiting for it to be credited to the account).  I plan to keep track of this going forward, but if you want to know how some people afford travel, look no further than this last sentence.  All this money was earned simply by doing my regular shopping with a credit card instead of cash, and opening cards that offered lucrative bonuses.

Lastly, an area that started as a small number of around $2,400 per year is beginning to grow.  This area consists of my rental real estate.  Last year, according to my tax return, this business produced about $9,000 in profit.  That is after all the bills are paid, and does not include any principle reductions paid on the loans for the properties.  I currently own 6 rental properties and have been adding about 1 property per year.  Since these profits are largely being reinvested in additional properties, I don’t notice the effects on my lifestyle just yet, but ultimately, this should be an area in which the small numbers begin to grow quite large as more properties are added to the mix, and some loans begin to be paid off.

In many areas, what started as a paycheck or only a few hundred dollars has added up to significant income within my short (13 year) career.  Never underestimate the power of small numbers, and their ability to grow over time.

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