04-07-2023, 06:11 AM
The chart below is from my e-book. It shows how you can get rich from investing in the stock market. You need
But can you be a billionaire? Refer to the second chart. It shows the final sum if you invest $ 1,000 annually for different investment periods and different annual returns.
For example if you can achieve 12% compounded annual return over 60 years, and you invest $ 1,000 annually, you will get $ 8 million at the end of the 60 years.
Following this logic, if you want to be a billionaire, you need to invest $ 125,000 every year with 12 % compounded annual return for 60 years.
The irony is that if you have $ 125,000 every year to spare, I think you don't have to worry about being a billionaire.
Note that Warren Buffett in his partnership days achieved 15 % compounded annual returns. So 12% is good for a retail investor. Secondly Warren Buffett became a billionaire not exactly from 100 % investing in the stock market. His Berkshire Hathaway is actually a business.
The reality is that most of the billionaire investors make their money from being an entrepreneur as well as being a stock investor.
But all in not lost. It is not that difficult to be a millionaire. You invest $ 1,000 every year for 60 years and achieve at 8% annual returns. The challenges are:
a) do you have the patience?
b) you have to learn how to invest to achieve consistent returns
- to start young
- invest regularly
- achieve consistent annual returns
But can you be a billionaire? Refer to the second chart. It shows the final sum if you invest $ 1,000 annually for different investment periods and different annual returns.
For example if you can achieve 12% compounded annual return over 60 years, and you invest $ 1,000 annually, you will get $ 8 million at the end of the 60 years.
Following this logic, if you want to be a billionaire, you need to invest $ 125,000 every year with 12 % compounded annual return for 60 years.
The irony is that if you have $ 125,000 every year to spare, I think you don't have to worry about being a billionaire.
Note that Warren Buffett in his partnership days achieved 15 % compounded annual returns. So 12% is good for a retail investor. Secondly Warren Buffett became a billionaire not exactly from 100 % investing in the stock market. His Berkshire Hathaway is actually a business.
The reality is that most of the billionaire investors make their money from being an entrepreneur as well as being a stock investor.
But all in not lost. It is not that difficult to be a millionaire. You invest $ 1,000 every year for 60 years and achieve at 8% annual returns. The challenges are:
a) do you have the patience?
b) you have to learn how to invest to achieve consistent returns