Money in motion creates more money.

span How does money in motion produce additional wealth? This is possible only when each of the other nine principles are applied to your financial situation, coming together like a crescendo behind Principle 10. The appli- cation of all the principles builds momentum and creates opportunities to put your money to work in a variety of ways. Applying each of the 10 prin- ciples at the same time has exponential power to transform your life, creat- ing a multiplier effect. Systematically building from one Money Mastery prin- ciple to the next and applying each principle on top of the other is like multiplying two times two times two times two: The end result is much greater than if those numbers are simply added together. That’s because each prin- ciple builds on the power and potency of the one that came before.
2 x 2 x 2 x 2 = 16
On the other hand, applying some of the principles part of the time is much like adding two plus two plus two plus two. You will see some results, but the overall effectiveness will be much less potent.
2 + 2 + 2 + 2 = 8
When you apply all of the principles all of the time by controlling yourspending, eliminating debt, planning for the future, and reducing your taxes, you are in a position to put your money to work for you so that it can do more than one thing at the same time, creating opportunities to maximize your wealth to its fullest; this is what Principle 10’s “money in motion” is all about.
The basic concept behind Principle 10 is learning how to get your dollar to do more than one thing at the same time. class="fullpost"> So how can money be put in motion to create more money? Let’s take a look at banks as a prime example of Principle 10. Suppose you deposit $1,000 ina bank. The bank pays you, in turn, 4 percent interest on that amount. What does the bank then do with that $1,000? Under the rules of the banking system,it can go to the Federal Reserve and get an additional amount to go with it,$10,000 for example. It now has $11,000 it can lend out at a much higher rate of interest than it pays you. Of course this is a simplified example of a very complex system, but it gives you an idea of how money in motion creates more money. Banks follow the very strict federal regulations that govern the banking indus- try, along with their own operating protocols to get your dollars to do more than one thing for them at a time. Take a closer look at how banks put money in motion, continually turning your money over and over to make a profit.If the bank lends out your money as part of a car loan and gets 10 percent interest on the loan, it will make 6 percent profit (af- ter paying you 4 percent in- terest ) on that car loan, right? Now when the car dealer gets the loan pro- ceeds, he puts that money into his bank. While the car dealer lets the money sit until needed, that bank loans his money out on a home construction loan at a rate of 9 percent. Then, the contractor for that con- struction job puts the
money in his bank and before he makes payroll or buys lumber, his bank has already loaned that money for a computer at 14 percent. When the com- puter dealer puts the loan proceeds into the bank, the bank turns around and loans it out on a boat for 10 percent. The boat dealer then deposits that money in his bank, and that bank loans it out on a Visa card at 18 percent.From this example you can see that $1,000 will typically multiply within the banking system eight to 10 times; often this will occur very quickly, within hours or days. The banks benefit every time that money turns over, no mat- ter what the rate—18, 6, 10, 8, and even 4 percent. If you add up all the turns on that original $1,000 in a year, the banking system will have earned between 38 to 42 percent while you only earn 4. Who’s winning this game? The point is, that if like the bank, you can get your money to do more than one thing at a time, you can look forward to both safety for your money and higher rates of return. This idea is worth repeating:
If you can get your money to turn over, or in other words, do more than one thing at the same time, you can makea constant and higher rate of return on that money.
In the prior bank example, we showed how these institutions literally turn money over and over again. In this next example, we’ll demonstrate how more than just money can be put in motion to build more income and wealth. Take for instance a large public company that sells shares of stock. Let’s say this company builds roads and bridges and takes the money from the sold shares to buy road-graders and other machinery. It then uses this equipment over and over again on many jobs, “turning” it many times to make a profit. The equipment only needed to be purchased once, but is used many times over to create additional wealth. This company, rather than getting a set “rate of return” on their money like its share holders, actually uses its equipment to turn over a greater and more continual profit.“Okay,” you might be thinking, “that’s fine for banks and large public com- panies, but what about me?” Let’s apply this concept of “money in motion” on a more personal level through the following account of one of our clients.