How to accumulate a Million Dollars?
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Loading ...Is it really possible for an average individual (i.e. an individual not born with a golden spoon, doesn’t have Bill Gates’ IQ, and doesn’t have the looks of Angelina Jolie/Brad Pitt) to become a millionaire?
The answer is a definite YES…. why so? The method is actually very simple… drum roll please…… through “COMPOUNDING” your money…
Albert Einstein once said:
The most powerful force in the universe is compound interest.
I worship this statement, because I know that this simple truth is the only answer I need in my quest to becoming a millionaire… Being a Math nerd like I am, I naturally translated this statement into numbers…
Assume I start with $10,000…
If I can compound this amount at 5% per month,
After 1 year, I would have $10,000*(105%)^12 = $17, 958.56.. a pretty decent growth… but still miles away from a million….
After 2 years, this $10,000 would have grown to $32,251… Still far from a million…. but notice that in the second year, my money has grown from $17,958.56 to $32,251… an increase of $14,292.44… whereas in the first year, the money only increased from $10,000 to $17,958.56… an increase of a mere $7,958.56….
That’s the beauty of compounding your money… the longer you compound it, the faster it’ll grow…
If you can leave the money alone and let it continue to compound… after 8 years, this $10000 would have compounded to $1,081,864.10… That’s $1 MILLION…!!!!!
So, plainly speaking… If we can set aside a certain amount of money and let it compound… our money will grow at a faster and faster rate until it eventually becomes a million dollars!!!!
Of course, the above example assumes
1) You have $10,000 to start with (which I have.. and I think most people should be able to accumulate if they are frugal and hardworking enough)
2) You do not need to touch this $10,000 for the next 8 years (not a problem as long as you still keep your job)
3) You are able to compound this amount at a constant rate of at least 5% per month…
Now, point 3 is where it gets ugly… that’s the challenge… which is why I explore options trading… cos only with options trading (or other forms of trading that offers some form of leverage*) can I hope to achieve this growth rate… I’m glad to say that my performance is so far pretty decent… maintaining a growth of about 5-10% per month….
About the Author
To find out more about how I make money through options trading… or to simply encourage me on my path to millions… check out my blog http://www.mymillionairegoal.com
