# Journey to Millionaire then billionaire



## jdam (Apr 4, 2012)

Hello everyone. Thanks for checking my post. 

I haven’t been very active since I joint in 2012. But my investment has been running at full speed. I want to share my journey with you and heard your feedback.

A bit about myself. I promise, this is the only long post, the subsequent posts will be shorter. if you have any questions feel free to ask. I like to remain anonymous.
Education: engineering 
Job: IT support
Age: mid 30’s
Married with 1 kid.
Income: average IT income
Investment style evolution:
Started from stock picking to value investing to indexing (with a few moonshots)
Goal: 20%+ return per year. 100’s millions by 60, billion by 80
Note: my investment style evolved a lot. I am at the point where I want to have safe, low volatility passive investment and then use leverage to reach 20%+ return. Because picking stocks doesn’t guaranteed profitable return yearly. My goal is to have 20% or more return on my investment. My personal return has been above 20% last 10 years (investment + work income). I like to keep it that way until I become a billionaire. I know most of you would say 20% return is too ambitious. But it isn’t impossible, many people started with nothing and became billionaires, their return is more than 20% (check any self-made millionaire and billionaire)

Portfolio: 
2 houses, 2 car
Equity: Canadian energy etf, US utility etf, Canadian weed etf 

Started investing: 2007 
Net worth:
2007 = $20,000
2017 = $650,000


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## OnlyMyOpinion (Sep 1, 2013)

A few thoughts:
Audacious goals but I don't see you arriving at billions based on your portfolio. Million(s) should be achievable with discipline and more diversification (read: some US and global equity exposure). 
IMO, a 20% ror that includes your work income growth is not really meaningful. It is where the money has gone that is relevant. Your net worth growth is impressive, is $650k the current value of your noted portfolio? Wondering how much of that is your 2 houses (net of mortgages of course)? 

I have to say that a goal of being a billionaire at age 80 is unusual. Why? I believe most billionaires didn't set out with that as a goal. Some were born into weath, some were entrepeneurs who bet correctly, etc. I find in my 60's that I am now looking at ways to unwind my assets while I still have my marbles. We have all we need and see no reason to try to continue to grow to some arbitrary value.


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## heyjude (May 16, 2009)

The flaw in your argument is including work income in your returns. In all probability, a significant proportion of the increase in your portfolio is coming from what you add to it every year. That cash inflow is not ROI. Your work income is not going to increase by an average of 20% per year, unless you rapidly become the CEO of a large corporation. Your investment returns on equities may be great, but remember that we have had a bull market since about 2009. That may change very soon. As for leverage, it is your friend when returns are positive, but your enemy when they are negative. 

Besides, there are many 30 something people who work in IT, earn average salaries, and invest in index funds. If they are frugal, they can all become millionaires. The probability of becoming a billionaire is minuscule.


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## kcowan (Jul 1, 2010)

Working in IT pays off early but will top out too. Unless you make the switch to executive and also join the stock options of a leveraged company, you will live comfortably but not have a home run.

Good luck though. It is always good to have a plan. Those with realistic plans are twice as likely to become successful as those with none. My focus is to introduce some realism to your plan.

Save 10% of your salary. Invest it in blue chip stocks with 4% dividends. When you reach $100K, invest 10% of that in potential 10-baggers, say $1000 each. As each one doubles, transfer the losers into it. Constantly bet on the winners. Avoid debt by avoiding premature purchases.


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## TomB19 (Sep 24, 2015)

Hoping to make 20% return in a given year, particularly this year, is worlds different than hoping to average 20% over a lifetime. Particularly with the diluting effect of ETFs, I don't think it's a reasonable average return to hope for.

However, if you can make that, good for you. Perhaps you will share your methods with us. If we could average 20% over our lifetime, we could live pretty well indeed.


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## nobleea (Oct 11, 2013)

I don't know what you mean by rate of return to include work income.
Look up the XIRR function - that will tell you your true return of your portfolio. 20% was within reach until recently.

As others have said, having a solid plan and sticking to it will be easy to be a millionaire, even multimillionaire. Billionaire will be almost impossible. You need a business or three to get to that level. Big businesses, not a subway joint and a couple car washes. Or if you are extremely lucky and leverage all your portfolio in to 7 moonshot stocks, successfuly, in a row. Though at those levels, you'd be moving the market with just your money, so not really possible.


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## AltaRed (Jun 8, 2009)

The OP is obviously talking about 'net worth' growth rate and not investment returns. If one puts enough new money into a portfolio account, one could have 300% growth per year for a few years and that will rapidly tail off as absolute net worth grows. It's a different calculation entirely.


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## peterk (May 16, 2010)

Guys - give him a break.

$650,000 * 1.2^45 is 2.4 billion. His goal is only *1* billion.

Totally doable... Should be easy


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## jdam (Apr 4, 2012)

Thanks for everyone’s opinions. They are valuable. Here are my thoughts
- I know 20% sounds unrealistic. But aren’t we surrounding ourselves with successful people and their wisdoms:
rim, apple, facebook, amazon, Alibaba, baidu, google, tesla, etc. Just to show the point it is quite possible among the people 
- I combined my investment and income to show my net worth and my performance as a person. (when I stop working, my performance will only based on investment)
- I didn’t have a lot of income when I started investing, even now I could saved about 10k from my income.
- I know my income will mean less to my net performance as my net worth gets bigger.
- I want to be able to afford the best health care (personal health issue), help people who need help and I love investing.
- I know the odds to become billionaire are small for most people. But if I can get 15%+ return and live up to 80s or 90’s I can get there. It is just a matter of time, not performance of return.
- I have a feeling the bear market is just around the corner. I know you are going to say I can’t time the market, there are indicators we can check, just get out before the party is over at 12 am.
- to OnlyMyOpinion: my portfolio will change depending on the opportunities. I think a safety + steadiness + leverage in bull market can produce good return. 
- I thought investing was easy until I went through the bear market in 2008, I was down 75% but I was young I recover quickly. That got me serious and curious on how the best investors invest. I read all the books on investing recommended by the best investors.
- I put away about 25% of my income, use it in investment.

- Here is the graph for my future net worth projection








Asset: 1.28m
2 houses: $1.1m
2 cars: $10,000
The rest is in RRSP, TFSA, STOCKS
Debt: 606k
Net worth: $663k


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## lonewolf :) (Sep 13, 2016)

jdam said:


> - I have a feeling the bear market is just around the corner. I know you are going to say I can’t time the market, there are indicators we can check, just get out before the party is over at 12 am.


 The odds are high we crash Monday or early next week. My question to you is are you committing self sabotage as you see a bear market just around the corner. I find it very interesting the charts scream danger next week esp if Feb 9th low is taken out yet you are long even though see the danger. Jdam what are you looking @ that makes you think the market is going to shortly be a bear market ?


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## lonewolf :) (Sep 13, 2016)

jdam said:


> ]
> 
> Asset: 1.28m
> 2 houses: $1.1m
> ...


 Your pretty much positioned the way most are set up. To come out ahead have to be on the complete opposite side of the trade. Everyone has bought the world & is debt. If you get out of your debt plus sell the world to go long cash yes I would say you might have a chance to become a billionaire even valued @ today dollars. There will be a time to buy the world though this is not it. Your goal can be done good on ya for having a goal


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## nobleea (Oct 11, 2013)

jdam said:


> - Here is the graph for my future net worth projection
> View attachment 18361
> 
> 
> ...


I sort of follow your excel chart, but its not set up very well.
Based on your numbers, I think you're saying that you have 180K in RRSP, TFSA, stocks. That's assuming you've included the 1.1m worth of housing in your net worth as most do.
And based on your chart, you are expecting to stop working, or at least withdrawing 100K a year from your portfolio starting in 2022 and growing up from there. At that point, your networth will be 1.508M. That's a growth of 845K in 4.5 years. We'll have to assume your houses and cars don't appreciate, or if they do, it's minor. Of course there'll be some deleveraging in paying down the mortgages. So let's assume you only need a growth in your portfolio of 800K. on 180K base. in 4.5 years. Even at 100% leverage on your portfolio (are margin accounts possible in TFSA and RRSP?), you would need over 20% growth to get from 180K to 980K portfolio in 4.5 years. Now maybe you're saving 50K a year, in which case, 20% might just do it. But still with 100% leverage. I mean BRK has returned something like 21% on average over the past 50, 60 years.


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## tdiddy (Jan 7, 2015)

I wonder how many people come from nothing to become billionaires, with a day job? Usually the story involves a great deal of personal involvement, ie start your own company, become an elite executive, be a generational athlete, entertainer.. Honestly curious, what would be the approach here? A string of leveraged good bets on penny stocks? VC?

Edit: so according to investopedia, as of 2015 nobody has done it. https://www.investopedia.com/articles/investing/112015/stock-picking-wont-make-you-billionaire.asp


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## jdam (Apr 4, 2012)

lonewolf :) said:


> The odds are high we crash Monday or early next week. My question to you is are you committing self sabotage as you see a bear market just around the corner. I find it very interesting the charts scream danger next week esp if Feb 9th low is taken out yet you are long even though see the danger. Jdam what are you looking @ that makes you think the market is going to shortly be a bear market ?


thanks, just a quick reply. most people think it is impossible, I feel the pressure to prove myself here but i wont I dont want to turn my diary into a debate. this is a personal journey, so we will watch and see.
I will continue to post my journey here as much as i can. and we can talk about the odds in the investment forum.


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## OnlyMyOpinion (Sep 1, 2013)

tdiddy said:


> I wonder how many people come from nothing to become billionaires, with a day job? Usually the story involves a great deal of personal involvement, ie start your own company, become an elite executive, be a generational athlete, entertainer.. Honestly curious, what would be the approach here? A string of leveraged good bets on penny stocks? VC?
> Edit: so according to investopedia, as of 2015 nobody has done it. https://www.investopedia.com/articles/investing/112015/stock-picking-wont-make-you-billionaire.asp


Thanks tdiddy. A very interesting link because it quantifies some of the required capital and performance, discusses the path of a few well-known billionaires, and warns investors to have realistic market expectations or risk becoming disillusioned or too aggressive.

Examples: 
_Suppose you perform extremely well and save up $1 million worth of investable assets by age 30... You then apply all $1 million to the markets and somehow realize (an) incredible 17.7% annual return. In the end, your portfolio would grow to approximately $300 million by age 65. It's a lot of money, but it's still $700 million short of billionaire status._

_If you're a 35-year-old with just $6,000 to invest, you'll need to average about 40% returns until you're 70 to become a billionaire. Even if you build an awesome portfolio, that's not happening._

*The numbers don't add up. Take a realistic, practical look at your stock market expectations. Otherwise, it's too easy to become disenchanted with performance and either stop too soon or get too aggressive.*

_Real fortunes, at least at the billionaire level, are built by entrepreneurs who find ways to put products or services in front of hundreds of thousands, if not millions, of consumers.
_


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