Million Dollar Challenge

Read an interesting article today on investing. The topic was about if you could get 100% return on $1000 investment in one year.

The end result of the article was that yes, it could be done, with a lot of work researching volatile investments that could yield explosive results. But it also came with a lot of risk involved.

Let me reposition the general thrust of the article — could you take $1000 and turn it into $2000 in one year.

Once I rephrased the topic — I sat back and said, yes, I could, with a lot less risk and not as much work.

How? Sell things. The easiest way to generate income in a capitalist society is to sell things. Could I make $1000 profit on a sale? Yes, I could. But let’s look at it another way. Could I buy something for $1000 and resell it for $1250, thereby making a 25% profit? Yes. Could I do this four times over the course of a year? Yes, I could. Could I take $100, buy something with that and sell it for $125? Yes. Could I do that 40 times in the course of the year? Probably, but it would be more work. The point is, that if you break it up into smaller profit percentages, you can achieve the goal in less than a year. And, here’s the great part, you have tangible items that have (hopefully) intrinsic value, so your money is at a much lesser risk than volatile stock investments.

So, to carry this thought process a little further, could I double my money in a year. Yes. Yes, I could.

Can I do that two years in a row? Why not? The same process could be used again.

Would it be possible to double my money every year? I mean, could I take $1000 and turn it into $2000 in the first year, then take that $2000 and turn it into $4000 the second year, and so on?

Well…I guess I could. It would just be a matter of scale. If I bought something for $1000 and sold it for $1250 four times over the course of a year to double my money, is it really all that different to buy something for $10,000 and sell it for $12,500 four times in a year? Well, I don’t know. What about doing the same thing with $100,000? Or $500,000? Or $1,000,000?

Seems to me that the scale is going to be changing what item you would be reselling. Once you are getting into the six figure range, it wouldn’t be too hard to move that money into buying and selling real estate, and still achieving your goal of doubling your money.

So here’s the challenge — double your money to $1,000,000. How long would it take?

Here’s a chart:

Chart 1

As you can see, by doubling your initial investment of $1000 every year, by the end of 10 years you have over $1,000,000 in your hands.

But let’s say you don’t have $1000 to start with, maybe only $500, or even less? By doubling every year, it only takes three more years starting with $125 than it does with $1000. Is that something that could be done? Yes, it could. See Chart #2.

Chart 2

How, exactly, can someone take $125 and turn it into a million dollars in 13 years?

I’ll show you — because I’m going to do it right here in this blog. And you can do it with me.

I’m going to chart every single thing that I do to take $125 and turn it into a million dollars. And I’m going to see how long it takes. The plan is going to be 13 years. Let’s see how long it actually takes.

Oh, and along the way, I’m also going to invest $125 into some volatile investment and see how that does during the same time period.

Let the challenge begin!