Can an average person make a million dollars by investing it in the stock market, or mutual fund?

Answer 1

yes, as a matter of fact its almost guaranteed. since the stock market opened over 100 years ago, it has averaged 12 percent a year. we could do a little better if we choose wisely.

15,000 invested into steady 13 percent a year stocks, compounding every year. in 35 years you will be a millionairre. I love compound interest. =)

Answer 2

Yes it is very possible, but is not a get rich quick scheme.

If you start investing $15,000 this year and increase your investment by 3% each year to cover inflation. Your investments will grow to above $1 Million in 30 years with an average return of 12%.

30 years may sound like a long time to you. But if you are 25 you will only be 55 when you have obtained $1 Million. If you are 40 today however, you need not worry because a 40 year old today has a life expectancy of 40 more years! So you still have time to get that million!

You can even make $1 a day grow to a million in a lifetime. (See the link below)

PS: someone tried to tell you that a bank won't let you borrow money to invest in the stock market. That is an UNTRUE argument made by Robert Kyosaki (Rich Dad Poor Dad author). Because every broker (bank) will allow you to buy stocks on "MARGIN", which is borrowing money from the bank to invest in stocks. The interest charges eat into your returns and your potential downside is increased more so the the upside potential - therefore making this more risky and not for everyone. But you can still do it!

"The greatest mathematical discovery of all time is compound interest."
"The most powerful invention of man is compound interest."
--ALBERT EINSTEIN

Answer 3

JJ, the answer depends on the average. If you invest $1,000 and add $3,000 yearly and you earn about 8% annually on it, in 20 years your investment total $152,929.72 ($61,000 principal).

As you can see, it all depends -
1. how much you invest
2. how much you keep adding to it
3. your return rate

You know for sure how much you can invest and how much you can add to it because of your income. Unfortunately in the stock market, you don't know what the return rate is all the time.

When I invested in the stock market, I had up to 30% returns then sometimes I had 4% returns. It was erratic. After a few years, I started looking for other options that would give me a better route to the "million dollar" mark. I finally found it using real estate tax liens with steady interest rates. The state defines the interest rate at 14%, 16%, 18% -- much better than the stock market. See the book below for more information.

Answer 4

The simple answer is "YES." There is an expression: Time makes all things possible. The problem is do you have enough time. You could place a small sum of money in the back, earn 0.01%, and make a million dollars assuming you keep it there for like a billion yrs. Now let's get back to reality. Your biggest enemy is inflation. I see these idiot financial advisors say stuff like if you put away $10 a month for 20yrs you'll have $50,000. What they don't tell you is a $50,000 may only be worth $30,000 in 20yrs depending on the rate of inflation. As a caveat, you must add an offset to deal w/ inflation when projecting out. Time can be your friend (if you start investing early) and inflation is always your enemy. If you are 55 and asking this question, then you're pretty much out of luck unless you have a job that pay half a million a yr.

Answer 5

Easily.

The example I use is, if you start before you are 30, add $100/month to a growth mutual fund with a solid long term record.
$1200 for the year.

Next year, when you get a raise, take $200 of your raise and add it to your yearly total. Next year add another $200 ($1600 for the year after 2 years) Repeat every year. By the time you are in your 50s, it will be a big chunk to invest every year, but your income will also be much bigger.

Assuming you meet the long term return of the stock market, by the time you are 65 you will have $1 million in the bank.

Answer 6

I didn't write down the date of the article, so -- sometime within the last 2 years, one of the investment magazines answered your question. They wrote: "Real estate has packed quite a punch of late, appreciating 12.4% annually between 2001 and 2006, according to the S&P/Case-Shiller U.S. Home Price Index. That clobbered stock prices, which gained only 4.3% a year as measured by the S&P 500. But over the long run stocks win easily. A new study by Jack Clark Francis, a finance and economics professor at Baruch College in New York City, and Yale's Roger G. Ibbotson compared the annual returns of real estate from 1978 to 2004 compared with those of 15 different "paper" investments, including stocks, bonds, commodities futures, mortgage securities and real estate investment trusts. The results were: Housing delivered a solid buy unimpressive annualized return of 8.6% Commercial property did better at 9.5% The S&P 500 however, delivered a crushing 13.4%. Other studies argue that real estate's returns are much worse. Yale finance and economics professor Robert Shiller, ... looking back to 1890, contends that only twice has real estate produced truly outstanding returns: after World War 2, ... and from 1998 to 2005, a period he thinks is a bubble.Housing's rate of return, he argues, has to trend back to the mean of about 3% a year--barely above the inflation rate.

Answer 7

I dont say an average knowledged person in stocks could make it for sure.. But an average person can make money in Mutual Funds with some average knowledge..
or If you wanna invest in Stocks, then get yourself boosted with stock investment knowledges...

All the Best !

Answer 8

Yes. In fact all average people need to make a million dollars if they want to have a comfortable retirement. Mutual funds will do research for you. To get a "quality" portfolio you will need multiple mutual funds that wil give you strong exposure to value stocks, growth stocks, and international stocks. Depending on your age, bonds are also an important part of your investments.

In order for your money to last a lifetime, you will need (roughly) 20 times the money you desire to pull-out each year. This way your money can replace itself and continue to grow. If you want $60,000 per year, plan on saving $1,200,000.

Answer 9

It all depends on the level of risk tolerance. I like those "high voltage" stocks with excellent management team. For example, Adriana Resources(ADI.V or ANARF). Check their web yourself. If they did twice by turning a $20 million company into $billion, how likelihood will they do for the third time? I have 99% of the confidence that they will deliver again. At least, this is one of the best stocks that will make $million.

Answer 10

Yes but you have to stick with it. It will take years but you can do it. Stick with mutual funds. They have pros managing them. Go to Vanguard , com They have many good funds. Equity Income Fund is great and pays div every 3 months.