Reverse Millionaire

Feb 2nd, 2011 | Filed under Opinions and Perspectives

As I continue to save some of the little money I earn, in the hope of one day becoming a millionaire, I would like to share with you another concept of financial wealth most people have never heard of before, the reverse millionaire.

I had a work mate introduce me to this idea almost a decade ago, he said:

When I die, I hope I owe a million dollars to the bank, because then I will know that I had spent all my money, and had also spent another million dollars along the way.”

What an interesting concept, Here I am approaching middle age, and I don’t know yet if I have even made a million dollars in my life, certainly not after tax.

Having thought about this a bit, I realized the concept of becoming a reverse millionaire is actually easier than you may think.

How To Become A Reverse Millionaire:
(Do Not Try This At Home)

Step #1 – Borrow a Million Dollars

Option 1 – The Sneaky Borrow

You would need to get a job, preferable a good one, all the while using several credit cards wisely by always paying off the debt. Your responsible use will cause the credit card companies to continually up the credit limits on the cards as you prove yourself to be an upstanding customer. You will find it is not actually that difficult to get the credit limit of a credit card up over $20,000, and with hard work and savings, you could quite possible get them as high as $50,000 – $100,000 each. You should also get lines of credit, and multiple bank accounts with overdrafts at as many banks as possible.

Several high limit credit cards from several banks, as well as your lines of credit and bank accounts overdrafts all cashed out on a single day, could quite easily, and quickly get you the million dollars in cash you are looking for.

Legality = Questionable

I wonder if this is legal. If it is, and too many people try it I am sure there would soon be some sort of “Reverse Millionaire Law”, maybe you could get away with it, but you might want to consult a lawyer first.

Option 2 – The Hard Work And Saving Method

This is the way your parents and school teachers probably told you was the way to get rich, and in the end would lead to the biggest pile of cash.

Go to College, get a steady job, work hard, invest wisely, and save enough money that the bank doesn’t mind you borrowing another million dollars.

Legality = Legal

This will probably never happen to me, though I have gone to college, and do save, but the getting a steady job part unfortunately is my fall down. I just can’t stand “Working for the Man” more than a few years in a row.

Option 3 – The High Interest Method
Reverse Millionaire Compound Interest Graph

Rather than doing the hard work yourself, you can simply let the magic of compound interest do the work for you, by my calculations if you can get enough credit at the age of 25 to borrow just $6,500 at your average credit card rate of 20.5%, with no additional work needed, you will become a reverse millionaire by the age of 50.

Legality = Legal

Hmmmm, I don’t think this was exactly what my work friend meant by this. I think what he was talking about was actually spending an additional million dollars before he died, this is more about the man sticking it to you rather than you “sticking it to the man”. Though definitely not the method of choice, it is something to consider.

Step #2  – Going Beyond Broke

Assuming you did not pick Option #3 above, you now have one million dollars of the banks money, as well as a bunch of your own, this does not yet make you a Reverse Millionaire. To become a true Reverse Millionaire, you must liquidate any assets you have, and spend all of it before the bank takes it away from you.

For myself I am pretty sure I would want to get out of whatever country I did this in as fast as possible, so I would probably spend a large chunk of money initially on something like a yacht, to carry myself, my money and possible a couple of supermodels somewhere beyond the banks reach. The yacht would then be liquidated as quickly as possible into cash, before the bank put a lien on it. I could then commence my decade or so of endless partying somewhere in the tropics until finally becoming a Reverse Millionaire.

Reverse-Millionaire-Success

  1. Janene Murphy
    Feb 2nd, 2011 at 09:29
    Reply | Quote | #1

    Hehehe! It’s scary how easy the high interest method is, huh? If it’s all the same to you, though, I think I’ll focus on making money instead of digging a deeper hole. 🙂

  2. PBScott
    Feb 3rd, 2011 at 00:15
    Reply | Quote | #2

    @Janene Murphy
    Glad you had a laugh Janene.

    Yeah #3 is not such a good choice. I was thinking of extending the graph to reverse billionaire also, it would only take another 24 years !

  3. Simply Ridiculous
    Feb 6th, 2011 at 13:41
    Reply | Quote | #3

    These are fascinating ideas. I think that no. 1 would certainly work.

  4. PBScott
    Feb 6th, 2011 at 22:38
    Reply | Quote | #4

    @Simply Ridiculous

    Thanks for the comment.

    #1 does look appealing, but I hope no one actually does these things, I imagine #1 might end up making you a fugitive.

    I won’t be doing anything like this myself, as once you are a fugitive, you pretty much have to lose all contact with family and friends, and they are more important than the money to me.

  5. johannthecabbie
    Mar 7th, 2011 at 07:19
    Reply | Quote | #5

    Years ago, an acquaintance of mine was diagnosed with HIV. This was the days before the drug cocktails were developed, so he believed he only had a few years left. So he decided to live up his last days to the max. Having an excellent job, he easily obtained a number of credit cards with high limits, got a second mortgage on his house, rented it out, and went on an extravagant world tour.

    Now, near twenty years later, he’s in excellent health and he’s still paying off the credit cards. He has no regrets.

  6. PBScott
    Mar 7th, 2011 at 07:47
    Reply | Quote | #6

    @johannthecabbie
    Thanks for the share johann, good to know he took a break from the grind to enjoy life a bit, and happy to know he is still alive and happy.

    Interesting enough a buddy of mine borrowed about 30k when he found out he was dying of cancer and took a big trip around the world, after returning home, he actually managed to pay it off before he died so the banks didn’t hound his parents after he was gone. I guess he wanted to leave a positive legacy.

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