A little over two years ago I had a discussion with friend InvestmentBanker about how easy it is to make a million dollars. Keep in mind that easy is relative.
20% annually is no walk in the park. Learning about the stock market takes patience and diligence. There is so much information out there about fundamental and technical analysis that you could go your whole life and still not understand 90% of the things that happen on wall street.
The above is how I feel when I look at pretty much every single graph I see.
To the left you can see the success of capitalism. In the 1930s the average trading volume on the Dow was maybe 2 million shares monthly. In March of 2009, over 9 billion shares were traded. In today’s society it takes money to make money. We can complain all we want about how the rich get richer because of the stock market, but ultimately you should learn how it works: To become part of the 1% you have to think like the 1%.
I wrote before that to consistently beat the market is an impossible venture. I’d like to change that to improbable. Hard work pays off and we should never rule out optimism.
Remember the chart above; to save 10k the first 5 years and 20k for 10 years after is not difficult with discipline.
William J. O’Neill wrote, “The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.” That said, let’s make a million dollars.
*1 million dollars is not enough to retire, it’s simply an arbitrary target.