How Quickly Can You Become A Millionaire?

how quickly could you become a millionaire assuming you just invested five hundred dollars a month knowing what we know now if we could hypothetically go back in time and only invest in those investments that we knew are going to generate great returns in the future how much money could we make and if we stuck with those investments where would our nest eggs be today well since April Fool's is right around the corner I decided to find out just for the fun of it I went back and looked at four different stocks that have performed incredibly well since the turn of the century so without further ado let's find out what's really possible in the stock market but before we get going be sure to like this video if you haven't already as it really does help out the channel a lot and subscribe with notifications on for more money related videos like this one every single week and if you want to further support this channel you can check out some of the links I have left in the description below which includes a link to the investing platform and one finance get started investing for free today ok so as I just said we're gonna be going over four different investments in the stock market today figuring out what kind of returns they generated in the 2000s and Beyond we'll use that to determine just how quickly we could theoretically have become a millionaire investing in each of them assuming we only put in $500 a month a couple of other things to mention in the interests of keeping things as simple as possible will be assuming that we made these investments inside of a Roth IRA and that there were no trading fees that we had to worry about or other taxes and costs and to give us some context for the results we'll be seeing today we will be comparing them with what would have happened had you invested the same $500 a month into various index funds over the same period lastly these results are not going to be the most realistic since we're basically assuming that we had access to a time machine and could go back and cherry-pick some of the best investments the stock market has produced over the last 20 or so years so I wouldn't take this too seriously it's all done in the interest of fun but with that out of the way let's get into it and look at our first investment tractor supply company ticker symbol tsco if you're interested caters mostly to the hobby and lifestyle farmers and thanks to some pretty substantial growth in the number of hobby farmers in the late 2000s and early 2010's they saw their stock price soar over the past couple of decades a share of the company stock was valued at a mere 42 cents in November of 2000 by October 2002 it had exploded to $4 and 27 cents a share riding the bull market following the bottom of the dot-com crash tractor supplies stock grew to as high as 14 dollars and 90 cents a share in March 2006 before unfortunately starting a slow decline that would last into the Great Recession at the bottom of the recession the stock was valued at a mere six dollars and 52 cents per share less than half of its previous high though admittedly still quite a bit above where it started however those who managed to hold on during those difficult times were rewarded with a bull run that didn't let up until 2016 in May of 2016 the stock broke $90 per share before falling into the mid 50s over the next year since then it has recovered and at least as of the end of 2019 it was once again sitting at around 93 dollars a share so if you had started investing $500 a month into tractor supply company in January 2000 how quickly would you have become a millionaire 20 years 15 years try 13 years and 1 month and it would have been a bit of a shocker - in December 2012 the stock was worth about $40 a share and based on our investments we'd have owned about 20 1005 on her chairs therefore our net worth would have been around eight hundred and seventy five thousand dollars at the time but in January of 2013 just a month later the stock jumped up to nearly 48 dollars a share and our net worth skyrocketed to 1 million and 26 thousand dollars that's a return of about 35 percent and what's more because the stock just continued to rise from there we would never again fall below the 1 million dollar mark in fact at least as of this writing we've closed out 2019 and we'd have a net worth of about 2.06 million dollars that's like having an average return of about 24 percent per year for 20 years now the 2.06 million is a bit down from what would have been our all-time high net worth of about two million three hundred and eighty seven thousand dollars which we would have had in july 2019 but considering that two we've only invested a hundred and twenty thousand dollars of our own money and have a net worth north of two million dollars I don't think we'd be too bummed about the whole situation this becomes even more true when you compare it to the performance of something like the S&P 500 or that same time frame hypothetically if we would have invested five hundred dollars a month into an S&P 500 index fund such as vanguards VF i NX fund from january 2000 to January 2013 we would have had a net worth of about a hundred and fourteen thousand two hundred dollars that's an average return of about five and a half percent per year over those 13 years which on the one hand is pretty impressive in its own right because think about it we started investing in 2000 which most people would say is one of the worst times you could have been investing since we not only completely missed out on the stock market run-up of the 1990s but we also had to experience a second major crash later in the decade and still managed to make 5 and a half percent per year but on the other hand it's certainly a far cry from having a million dollar net worth as we did in our cherry-picked example which is kind of the point of this video I mean we don't yet have the benefit of hindsight for what stocks are going to do in the years to come so the results of our example investments in this video aren't really going to be the most likely outcomes for us when picking individual stocks but that doesn't mean it isn't still kind of fun to imagine what is possible if we did have the advantage of hindsight going forward and just so we have the numbers in our heads for the rest of the examples today had we kept investing in the S&P 500 index fund throughout the rest of the 2010s we'd end up with a net worth of about three hundred and forty eight thousand three hundred dollars that's an average return of about nine point six percent per year over those 20 years with that being said tractor supply company was obviously a great investments in the 2000s but it actually wouldn't have been the best let's move on to our next investment so wouldn't it have been great if you had invested in Amazon before it got big of course it would Amazon has one of the greatest stock market run ups in recent memory and is now one of the biggest companies in the world but just how great was that run-up well let me put it to you this way if you had begun investing $2,800 a month into Amazon in May of 97 which I know is a lot but stick with me here you would have been a millionaire but the 2000s even began in May of 97 Amazon was closing at around one dollar and 50 cents per share by September it was up to four dollars and 34 cents by June of 98 it was trading at $16.63 in November of 98 it broke 32 dollars a share three months later it doubled again to over 64 dollars a share and the very next month in March of 99 it rose to 86 dollars and nine cents per share that is an investment that is worth over fifty seven times its original value in less than two years and at twenty eight hundred dollars a month which again is admittedly a lot more than we're looking at investing for the examples of this video your investments in Amazon would have been worth over a million dollars by that point but like I said we're looking at investment performance since 2000 so that doesn't count for today's video as amazing as it is however as I said Amazon has grown into one of the biggest companies in the world so even after that insane run-up of the late 1990s Amazon still had enough fuel to produce a pretty incredible run in the 2000s as well after falling back down to earth as many internet companies did in the early 2000s Amazon was valued at around $6 per share in September 2001 it wouldn't break its $86 per share high again until September 2007 when it was valued at around 93 dollars a share it would weather the storm brought on by the Great Recession and fall all the way to 42 dollars and 70 cents a share in November of a wait before bouncing back and growing through the rest of the 2000s and 2010's this May date the video a little bit but at least at the time of this writing Amazon stock is worth around 1,900 dollars a share so hypothetically if you had invested $500 a month into Amazon stock in September 2001 you would have become a millionaire in a hundred and seventy months that's an ROI of about thirty point eight percent per year and while it did actually take us a little bit longer to hit the million dollar milestone with Amazon than it did with the tractor supply company Amazon would have more than made up for that lost time with its sustained growth throughout the 2010s because had you continued investing in amazon all the way through 2019 your investment would now be worth a whopping three million one hundred and forty five thousand dollars which is over fifty percent more than we would have had in the tractor supply scenario it's also an ROI of about thirty point seven percent per year since 2001 but you know who has both Amazon and tractor supply company beat in the 2000s Apple yes Apple is another one of the Titans of the investing world so much so that I know many people who have bought some Apple stock for their kids while they were young so that they could have some money to start with when they reach adulthood and by and large that has not been a bad investment so far Apple like Amazon was hit pretty hard during the dot-com crash in fact by September 2002 it was valued at just ninety cents per share and would fall to his low as eighty-eight cents a share by April of 2003 but just like Amazon it did eventually recover growing all the way to twenty four dollars and sixty two cents a share in December of 2007 it did like many other stocks lose over half of its value during the Great Recession but after falling to just over $10 a share in December of 2008 it came roaring back with a decade-long bull run that saw it grow to nearly $300 a share by the end of 2019 and 2019 itself was actually quite a spectacular year for Apple because it jumped from a hundred and fifty five dollars a share in December of 2018 to two hundred and ninety three in December 2019 that's about a ninety percent surge over the course of a single year quite impressive so how quickly could you have become a millionaire investing in Apple well assuming you invested $500 a month in September of 2002 it would have taken you a mere nine years and seven months to cross the seven figure mark that's an average annualized return of over fifty six percent per year but it gets even better because in addition to reaching a million dollars faster than any of the other investments that we've covered so far would have Apple also leaves you with a higher net worth today than even Amazon would have and mind you that's despite the fact that we're having ourselves start investing Apryl a full year later than we did with Amazon because a $500 a month investment in Apple starting in September of 2002 would be worth four million one hundred and seventy eight thousand dollars today that's an average ROI of about thirty five point eight percent per year over that time now that's what I call an excellent investment or at least I would if it weren't for the last investment I came across while working on this video because I found a company that would have reached a million dollars faster than Apple while leaving you with more money today than even Apple did and is by quite a wide margin in both areas so Monster has been kicking butt since the turn of the century seriously short of things like Bitcoin this is one of the best investments of the past 20 years monster was little more than a penny stock through much of the early 2000s it was valued at 9 cents a share in February of 2002 and hovered between that eight and nine cents a share all the way until the summer of 2003 and that's when it finally started to pick up steam monster broke the $1.00 per share mark in March of 2005 it rose past $5 per share a year later and reached the double-digit threshold in October 2007 after falling to $3 and 81 cents per share during the Great Recession monster experienced a steady rise throughout most of the 2010s ending the decade with a share price of around 63 dollars and 70 cents so an investor in monster in 2002 or 2003 would have seen their investment grow to over 700 times its original value over the course of just 17 years that would be like if Apple ended the decade at over $1000 a share or if Amazon finished at over $4,200 a share that's an insane amount of growth but since a good portion of it took place in the first few years monster of course being valued at nearly $8 a share by the summer of 2006 our investment would have crossed the 1 million dollar plateau really quickly if we had started investing $500 a month into Monster in February of 2002 we would have been millionaires by May of 2006 that's just four years and four months worth of been bad totaling just $26,000 out of pocket to become millionaires that's an ROI of about two hundred and nineteen point four percent per year and if we would have kept investing all the way to the end of 2019 our investment would be worth nine million two hundred and forty two thousand four hundred and forty dollars and twenty eight cents that's an average annualized rate of return of forty one point eight percent per year for seventeen years running and that's despite going through not one but two of the worst stock market crashes in American history that's crazy and it is what's possible through investing though obviously as I stated earlier in the video it's not exactly what's expected if you want to get a better idea of what is expected when investing in the stock market you can check out my updated video on what to expect when investing in the stock market at the link that should be showing up on your screen right about now but that'll do it for me today once again if you enjoyed this video be sure to smash that like button if you haven't already subscribe and hit that bell next my name's you'll be notified of all my future uploads I generally upload every single Monday and if you have a friend that would be interested in this kind of content be sure to share it with them let's really get this information out there and start our own financial revolution

Channel: Next Level Life

Views: 29,097

Keywords: financial education, money, next level life, personal finance, investing, debt, financial freedom, financial independence, budgeting, retirement, early retirement, retire early, ryan scribner, financial diet, finance, stock market, stocks, graham stephan, Beatthebush, Beat The Bush, How quickly can you become a millionaire, how quickly can i become a millionaire, become a millionaire investing, millionaire stock market

Id: 7FXY41K5ReU

Length: 14min 38sec (878 seconds)

Published: Mon Mar 30 2020