Managing money and accumulating wealth is similar to flying a plane through a weather system as Nelson Nash portrays, in his book “Becoming Your Own Banker.” He describes that every weather system has a leading edge with a headwind, a center, and a back edge with a tailwind. He also explains that if the plane is engineered to travel at 100 mph and flies into a headwind of 345 mph, the plane will be going backwards (Negative, 100-345= -245). If the plane is traveling through the center portion, it’s achieving its engineered rate of speed (Neutral, 100-0=100). And lastly, if it is traveling through the back edge, it will be aided by a 345 mph tailwind (Positive, 100+345=445). Each one of these areas represents a different “environment” in the larger system. It’s pretty obvious you would want your money to be in a positive environment, but Nelson claims that 95% of the American public have their money in a negative or neutral environment. Could there be a “Bermuda Triangle” where money simply vanishes? Is your money exposed to this “Bermuda Triangle”?

This story fascinated me because it makes perfect sense. It seemed like a simple blend of mathematics, logic, and imagination (and there is a lot of that stuff in Nelson’s book). Nelson quotes Albert Einstein in his book, “Imagination is more important than knowledge.” My imagination told me that there has to be a logical way to mathematically prove Nelson’s claim as it relates to money and the American public.

The first step of my logic process involved creating a standard (a Rosetta stone) between flying a plane and managing money. After some time of contemplation, there were several commonalities that I could come up with. The first was that someone had to operate the vehicle and the second was that it requires fuel.

The second step of the process was to create a mathematical system in order to numerically calculate Nelson’s claim. I settled on a simple plus/minus (+1/-1) rating for each of the two variables. The vehicle is not assigned a rating because it is useless in itself without the two variables of control and fuel. Think of it like this, can a 401K (or any financial product) do anything with no money in it? No. For the first factor, a (+1) is given if an individual has knowledge and ability to operate. They are in control and don’t need to rely on someone else. Ownership is also a key point here. Ownership by default is a (+1). A (-1) is given for no control/ownership or giving up the control. Who is actually operating the vehicle? For the first factor, ownership/control, it’s either going to be the individual (+1) or someone else (-1). For the second factor, fuel, fuel in the financial world is known as interest. PAYING more interest than what one is EARNING is a negative situation so that gets a (-1). (+1) is given to the situation where more interest is being EARNED than PAID. That’s a positive situation.

This rating system produces 4 different groups:

- (-1, -1) This group has no ownership/control and is paying more interest than they are earning.
- (-1, +1). This group has no ownership/control but is earning more interest than they are paying.
- (+1, -1). This group has ownership/control but is paying more interest than they are earning.
- (+1, +1). This group has ownership/control and is earning more interest than they are paying.

This matched up perfectly with Nelson’s story. You can easily see that group 4 would be in the positive environment, groups 2 and 3 would be neutral, and group 1 would be in a negative situation. At this point, I could dive into each group in more detail, but the purpose of this is see if there is a way to numerically prove Nelson’s claim that 95% of the America operates in a neutral and negative environment. The results were jaw-dropping to say the least.

Now that I had some numbers, my imagination told me plot out a simple X/Y graph. After plotting the points and connecting the dots, a right triangle came into view—giving me the inspiration for the Bermuda Triangle of Money. Separating the triangle at each point on the X-axis gives a representation for each group. Adding some creativity to calculate the surface areas of triangles and parallelograms (with some help from Google) and you get the following information:

Group 1 represents 43.75% of the triangle.

Group 2 represents 31.25% of the triangle.

Group 3 represents 18.75% of the triangle.

Group 4 represents 6.25% of the triangle.

These numbers suggest that 43.75% (Group 1) of the American public is operating in a NEGATIVE financial environment. These people are living paycheck to paycheck whether they are actually working or are on government benefits. They have very little to no ownership/control of their financial lives. The headwind is pushing them farther and farther behind. 50% of the American public (Groups 2 and 3) are operating in a NEUTRAL financial environment. They believe they are doing the right things but they are either giving up ownership/control or they are sitting on wealth that is not earning interest. This reminds me of another quote in Nelson’s book from Will Rogers, “The problem in America isn’t so much what people don’t know; the problem is what people think they know just ain’t so.” Groups 2 and 3 are very sensitive to the external factors that affect the entire system (taxes, interest rates, inflation, currency fluctuations, and loss of job/other life events). Only 6.25% of the American population is in a POSITIVE environment that is earning more interest than they are paying while maintaining ownership/control. This group is generating wealth faster than the other 3 groups. Nelson claimed 95% of the American public was operating in a Neutral to Negative environment, he was wrong. It’s actually 93.75%! The attached graph places the triangle over Nelson’s weather system so you can visually see the “Bermuda Triangle of Money”. If you use a little more imagination, you can see a hidden triangle that represents the opposite of our current situation. 93.75% of US are exposing OUR money and wealth to it every day unknowingly and unnecessarily. This can be avoided though, but where do we start?

- Take ownership and control!
- Read Nelson’s book, “Becoming Your Own Banker.”
- Stay away from the Neutral trap. Money should be moving!
- Learn how to capture the interest that you are paying to banks and finance companies.
- Find ways to legally remove your money from the tax system without giving up the interest earning power.
- Be positive!