Are My Goals Delusional?

Question

-To become a successful business person
-To invest in the market to make about 1k and invest that to make about a million
-Invest in the million and own multiple businesses
-Buy and Sell my businesses
-Take the risk and multiply my income by 10x (from the 1st Milion)
-With my 10million (normal rate interest on that is like 600k a year i think) put that in a bank and let that grow
-Hopefully my capitol can grow at the rate of over a half of a million a year steadily (600k a year)
-and in due time i will have multiple millions
(and maybe, MAYBE, i can reach 100mil after like 40 years, 'im not counting on it at all, its just a MAYBE')

im not sure if this is feasible because i think that i have an extremely slight case of megalomania.

Answer 1

Yes, you are megalomanically delusional. Having been one in my younger days, I can only say reality, and the math, hurts:

--To become a successful business person--

Very Possible, although as a megalomanic you may have problems passing business ethics in business school.

But here your plan starts to fall apart, quickly:

---To invest in the market to make about 1k and invest that to make about a million---

Whipping out my handy TI financial calculator: PV= -$1,000 (initial investment/outlay) FV= $1,000,000 (your goal) I'll give you say 10 years to still give you time to finish up, nets.... a 99.53% average annual return... thats per year every year for 10 years, straight. I believe I read recently the highest 10 year return on an individual listed stock (out of the thousands of stocks) is about 40% and the average stock returns are expected to be around 8% according to analysts for the next decade, I'd say your nowhere near your goal in ten years.

--Invest in the million and own multiple businesses ---Invest in the million and own multiple businesses
-Buy and Sell my businesses
-Take the risk and multiply my income by 10x (from the 1st Milion)----

Technically you've already been doing this in the market, but now your swtiching to buying and selling whole businesses... you realize whatever business you buy for a million bucks isn't going to be well established. It not like you can flip these things like a house either (or like you used to be able to anyway)... you work and nuture a small business into something. Anything you'll be able to buy, someone also wants to get rid of... if its a well run business, there is probably an entrepreneur running it... its his/her passion, dream, & energy driving the company (of this size). They probably won't want to sell if the business is going somewhere. Also, that entrepreurial spirit won't exist if they previous owner sells out early to you (especially if its just so you can flip it)... Also, you say you want to make ten times your money and get $10 Million in income... hold on a sec there partner... $1 million in assets * 10 doesn't equal $10 Million in income... its $10 Million in assets! Income is the cash the assets kick off, assets kick off closer to zero (for growth stocks) to say 12% for the highest risk bonds and other income securities. (So most likely about say $300-$700,000.00 in income in a conservative well balanced portfolio designed to produce income).

----With my 10million (normal rate interest on that is like 600k a year i think) put that in a bank and let that grow
-Hopefully my capitol can grow at the rate of over a half of a million a year steadily (600k a year)---

Ok first off $10 Million in a bank isn't going to grow all that much... especially when you factor in inflation... your purchasing power only gains a percent or two each year... yawnzville. (Think closer to in year x + 1 you have $10,600,000.00 but with the purchasing ability closer to: $10,192,307.69 in year x dollars. Although actually the return you'll get today is closer to 4.50% (say in an online savings account) and not 6%. But let's not quibble.

---and in due time i will have multiple millions
(and maybe, MAYBE, i can reach 100mil after like 40 years, 'im not counting on it at all, its just a MAYBE')---

PV = -1,000 FV= $100,000,000.00 N= 40 I/Y= X

x = 33.35 % annual returns per year for 40 years straight... considering small cap stocks have averaged the highest long term returns at close to only 12% your going to fall way short.

Also, even if you somehow did get to your $100,000,000.00 at say 3% inflation will only buy the equavalent of $30,674,846.63 in todays dollars.

Oh and FYI, if you could get the 12% a year for 40 years on your $1K, you'd end up with:

PV= -1,000 FV= x N= 40 I/Y = 12%

x= $93,050.97 or $99,906,949.03 short of your dream...

Oh and thats $28,543.24 in today's dollars... about the price of a decent new car.

So $1,000.00 + forty years = new car; not world industrial domination.

Sorry to crush those dreams, but better to understand the reality now then be ruined trying to live up to the dream.

Answer 2

Yes, its delusional, but wait....... Didn't Hillary Clinton makes hundreds of thousands of dollars on the commodity market from money that was lent to her and managed by a professional commodities trader... Yes! That's the ticket!

If you're not tied with the Clinton's political machine then I suggest that a more realistic rate of return for stocks over the long term is around 15% a year.

Answer 3

You might have a slight case of megalomania as you say. But other people have done as much and more. So why not you?

Answer 4

You never know... But do keep in mind that you:
a) Need to persevere always;
b) Need to be aware that you must start from the start;
c) Need to really learn and know how to do business;
d) Need to be very lucky;
e) Need to be very clever and probably step on many people.

Do you still want it? Good luck!

Answer 5

Goals aren't enough; you need a plan.