Your next 10 million

[farmerEd]

OK guys, I was asked this question by a younger (mid 20's, male) family member at a get-together not long ago...not long out of college and relatively bright and hardworking....after he found out that I had retired at a young age(I don't generally advertise that), he wanted my advice on what I thought he should do to make $10 Million(his number) as quickly as possible...mind you, it was not a get-rich-quick type of question..it was how can I plan my life so that in 10-15-20 years (sooner the better), he could have a sizeable pile of dough, more than enough to live on and then some. Of course, his first idea was real-estate(isn't it everyones these days?)...I gave him my opinion that RE was probably in the long-run not a bad component to building wealth, but my own opinion was that now is not the greatest time to be putting all my eggs in that basket....

My own advice was "technology" (i.e. a software package, a website that people may pay for etc), defintely something where he either wholly or substantially owned the company...because really thats what I know best...but I've been ER'ed 4 years and thats a long, long time in the technical arena to give much specific technical advice in that regard...

So you guys come from lots of different backgrounds....what would you tell someone (other than that they don't really need $10M to live on, which I already did)...but even so, whether its 2-5-10-20-30 $Million...the principal is more or less the same....you need something more than a decent salary and a LBYM mentaility to accumulate very serious welath unless you are willing to do it for 30-40 years.

Any takers? If it was you...knowing what you know now, what would you do?

 

[unclemick]

Well - I suppose not being brilliant - I would repeat what I told my oldest nephew(newly minted Naval Academy grad) - gave him Bogle's book(1994 one) - DCA into Vanguard Index 500(now I would TSM) the max you can as early and as long as you can - don't watch - concentrate on your career.

Along the way - history coughed up a good decade for stocks, he got married, they had a son, he got his promotions and will remain in the Navy.

Three tours in the Middle East and he screwed up and read Four Pillars(Bernstein).

heh heh heh heh

 

[frayne]

Start your own company and work your ass off, then sell it or take it public.

 

[wabmester]

my 10 easy steps....

 

[Dry Socks]

my 10 easy steps....

I agree that starting your own business is the way to make big bucks. But, it might make sense to start sooner. If you end up getting married and having kids, it's pretty tough to start working without a net. In my opinion it might be better to take the risks earlier while you still can.

 

[retire@40]

Start a business that you believe you would enjoy.  

Work at it, build it up, make and save as much money as you can until you have built up at least half of what you need to retire.  

Then sell all and retire, or take it down a few notches and semi-retire.

Be intense about your business, but keep family your top priority no matter what.  And don't forget to have some fun in between or else you will burn yourself out before the finish line.

That's how I've run my life and it's worked for me.

The more that business can run without you, the better.

 

[JPatrick]

How to earn 10 million?  If your passion is to earn 10 million you probably never will.  Tell me about your "other passion" in life then we can brainstorm the roadmap to success.

I don't get the 10 million question, but I do get the old "how do I make a ton of bucks in the market" question.  As it normally comes from an inexperienced person I've memorized a piece from Lew Rukeyser.  To make the point that you don't need special skills or timing, you just need to get with it and stay with it.
The Story:
Ralph is the unluckiest investor in the world. Starting in 1963 he put $2000 in the S&P 500 once per year.  Being unlucky he choose the worst day of the year (meaning the very top of the year).  He did this every year for 10 years.  He then quit and let it ride. As of December 1, 2004, his total of $20,000 would have grown to $837,057. 
His nitwit brother in law Darth (same age) finally got a clue in 1973 right after Ralph quit. He also invested $2000 yearly, but he did it for 20 years, twice as long as Ralph.  He was much luckier.  Each year he was able to pick the exact bottom of the market.
Even though he was lucky and invested twice the money, come that same December 1, 2004,his stash was worth $25.805 LESS than Ralph's.
The obvious moral--JUST DO IT!! (thanks Nike)

I always carry a hard copy of this, and if I think I've gotten through, I hand it over to the inquisitve lad, expecting a frosty Corona for my trouble.

 

[unclemick]

Yep

The late Joseph Cambell -'follow your bliss.'

Even Bernstein's Four Pillars can't screw up my nephew(I hope) since he got in over ten yrs of max TSP with Bogle.

A little first cup of coffee razz.

heh heh heh

 

[Arif]

Wab,
Like your list. However I would add a side business while employed out of college. That way you can run parallel tracks (self employment and employee). Then depending on which one takes off jump on that boat and ride it till you get to ER. This reduces the risk greatly of #6 especially if you have a family to support.

 

[retire@40]

However I would add a side business while employed out of college.

Depending on the type of business, it wouldn't be a bad idea to start the business while you are still in college. This may work better for a service-type business rather than a capital intensive business.

If you can get a customer base in place by the time you graduate, you can take it full-time after you graduate.

 

[lazyday]

Even Bernstein's Four Pillars can't screw up my nephew(I hope) since he got in over ten yrs of max TSP with Bogle.

Amusing perspective
I suppose next to Bogle, W Bernstein is a radical, market timing, testosterone poisoned young male. And probably a right handed extrovert!

(Four Pillars is my favorite investing book, and I consider Bernstein to be conservative, but it's all relative)

 

[azanon]

I guess Bogle was ok with 100% stock and Bernstein supports diversification among asset classes?  I'm always mulling over how to structure my portfolio, but in the end, i just leave all my retirement money in pure stocks, but just spread it out as much as possible (foreign and domestic, all market capitalizations).  I do this because that extra 2-3% return thats possible from a pure stock portfolio over one that holds about 50% stocks can mean a doubling or more of one's end value.

I know now that I have the guts to just let it ride, because i actually took 2000-2002 without selling at all; which of course financially was a dumb move, but it did prove I have the guts to watch a fall and not flinch.