How to become a millionaire?
What return do you need?
So it's a funny question: How much annual return do you need on your starting capital to reach one million dollars/pesos/euros/yen in any given number of years?
Turns out, it's not a ridiculous thing to slap a percentage on it. Well... that's what the calculator above does.
If you can find some way to get to your starting capital. (5k, realistically, but more is obviously better). And you find some way to let it compound interest for 15-20% per year, then you'll be getting close in about 30 years.
Which, I find, is not a bad ambition at all...!
Obviously - interest will have its effect. It just means your million will be worth less. (Like how a million is like a cute tip for an apartment these days in some cities). If you would put more money into this investment every month, it would go even quicker.
With 10,000 euros and 30 years you need 16.6% a year, which is not a crazy number. If you happen to know a lot about a certain type of market, stock, or technology. Warren Buffet was at 19.9%, and he didn't have the power of AI and the internet at his disposal. So see the number above as something nice to strive for.
In October 2012 I bought 26 Tesla shares at about $34, a quirky bet on a startup that was often ridiculed and distrusted. But I agreed with the premise of scaling electric vehicles, getting rid of exhausts and noise in the heart of cities.
Then I made the mistake of treating it like a casino: seven months later I sold at $102, three times my money. As it kept climbing past my exit I realized my mistake: if I believed in the future of Tesla and their premise on the future of clean energy, and as long as I trusted Elon Musk to do the right thing, I should have held on to the stock as my lottery ticket out of constant struggle.
I bought back in 2015 at $247, a higher price for less than a third of the shares. And kept holding on, until 2019, six years after I first sold, when the stock finally started moving. Mind you: during these years I was following the company closely — which in my experience is the only way to make a ‘safe’ bet on any investment. If you don’t know what you’re investing in, then you’re setting yourself up for a loss.
The stock has exploded since then, and I finally quit most of my Tesla position in 2024, after Elon Musk showed he could fall for identity politics (in this case, white nationalism), retreated from his promise to grow Tesla by 50% every year, bought X and turned it into a screaming match, and started pontificating on topics he didn’t understand or know anything about.
Since 2024, I’ve tried my luck at diversifying, betting on newer AI companies, and again had returns of more than 20%.
6% a year is what you’re looking for as a base minimum: enough to beat inflation and actually start compounding year on year. But 15% is what you’re looking for when you want to solidly grow your money. If you get into the research of the field you’re good at, it’s definitely possible. Even in bear markets, even through crises or even wars. And even within your own moral frameworks, like my own choice not to invest in fossil fuel companies or the war machine.
It's possible you sometimes have to wait for years for the stock to pop, because people aren't seeing what you're seeing. Then, 100% growth will still give you an average of more than 15% even if you waited years.
The lesson isn’t that research fails. It’s that research alone doesn’t pay out. Stay in the market, keep doing your homework, know your subject well, don’t let yourself get distracted, pick growth markets and stick with them when things get volatile as long as you understand the health of the company's cash flow, technical feasibility and trust its leadership.