Can you really get rich from stocks? Does it really build wealth over time? Has anyone else actually become rich with stocks? I’ve got the answers! Read on to find out.
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Can You Get Rich From Stocks?
When I was a teenager I sat down with my grandfather who was the CEO of a credit union at the time to talk about money. We both loved talking about financial topics and I learned a lot from him.
He told me that if I saved up about $10,000 by my early 20’s it would easily be worth over $1,000,000 by the time I retired if I invested it in the stock market. I didn’t even need to do anything beyond that. Just invest it and let it grow.
I was super intrigued by this. This was the first time I had heard about this “magical” stock market. At the time I took his word for it, because I had no idea at the time how to test this theory, but today I understand math enough to find out if it really works.
So I’m going to put this theory to the test and see if it works right now. Let’s take this hypothetical scenario and put it to the test.
Let’s say we managed to save up $10,000 by 20 years old and then invested it in the stock market at age 20. For simplicity I’m going to ignore inflation but that would need to be considered for any real future planning.
The overall stock market has returned on average about 10% (S&P 500 Index) without considering inflation over the history of the stock market.
So I ran the numbers in a spreadsheet. Look at this chart below to see the results:
Based on historical returns it looks like that $10,000 investment would turn into $1,067,189 by the age of 69. This is without doing anything else. No more contributions or changes to your investments.
He was pretty close! While I would expect to retire earlier than 69, it is true that you will reach $1,000,000 in your retirement years. Best of all, this is all without picking great stocks and building a great portfolio. This is the most passive form of investing.
With proper research we could have made a lot more than $1,000,000, but this chart demonstrates the power of investing in stocks. Yes, you can get rich with stocks, in fact, you can get very rich with stocks and I’ll show you how.
How Much Could You Have Made?
The power of investing in stocks is almost hard to believe but it is absolutely real. Small investments can become massive amounts of money by picking solid investments.
There is cool site called Invested Instead that shows you much money you would have today if you would have bought stock in a company rather than buying one of their products.
I’ll show you a few examples to give you an idea how powerful a small investment can be over time.
If you would have bought an Apple iPhone back in 2007 for $499 when it came out, it would be pretty much a worthless old tech device today.
Now, if you would have invested that $499 in Apple stock instead, in 2018 you would have $6,484!
If back in 2001 you would have bought a Microsoft Xbox for $299 when it came out you would have an old gaming console chilling in your basement or closet. :)
If you would have bought $299 of Microsoft stock you would have $1,423 in 2018.
Tesla Model S
If you had purchased a Tesla Model S when it came out in June 2012 for $57,400 you would still have pretty cool car.
If you would have put that $57,400 in Tesla stock you’d have $593,773 and could have bought 5 Tesla’s or maybe even a Ferrari if you are into that sort of thing.
This is just a fun little way to show you the value and power of investing stocks.
Are Other People Getting Rich With Stocks?
Short answer, yes! Many of the richest people in the world have become rich from investing in stocks.
Probably the most well known is Warren Buffet. He started from $0 and became a billionaire largely from stock investing. At one point he was even the richest man in the world. He’s famous for his incredible track record of success investing in value stocks.
Timothy Sykes is a young investor who has had great success by turning his Bar Mitzvah gift of $12,000 into $1.65 million in his college years. He’s gone on to continue raking in the profits investing in stocks.
The CNBC TV personality, Jim Cramer, had success in stocks long before starting his TV show Mad Money. In college he was so successful that he began teaching others. He eventually started his own hedge fund and became a multimillionaire.
Anyone Can Do This
You don’t have to be a celebrity or super smart to make money in stocks. My first big win in stocks happened shortly after I started experimenting with stocks. I was learning as I went and I bought Sirius radio way back when it was relatively new.
I put a $1k into Sirius and shortly after it doubled to $2k because Howard Stern was signed on to become a Sirius exclusive host. I was shocked and thrilled. It was the most exciting $1k I ever made.
My next big win took my stock investing adventure to the next level.
The company I was working for at the time began a new program that allowed us to invest our 401k into the stock market rather than just the small selection of funds they normally provide.
At the time I had about $40k in my 401k. I researched what I could and should invest in and I put that $40k into the stocks I picked. About a year later it had double to about $80k!
I had made $40k in stocks in one year! It was nearly what I made at my job for the entire year back then.
This was just the beginning. By the time I was 30 I had built up about $125k in stocks and I’ve continued to make money year after year in stocks since.
Stocks are a very powerful tool to build wealth and ultimately become rich. The super rich do it and us “regular” millennials can do it too. It’s not as complicated as the TV personalities try to make it.
Have you ever wanted to make money in stocks but have no idea where to begin?
It's time to go back to the basics and I’m going to show you how.
To make money in stocks, you only have to focus two things: picking the right stocks and building a dream team of stocks that will make you money. Do that and you're good to go.
Strap in because I’ve got a lot of awesome stuff to show you!
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