Let's say that you have $1,000 in a saving account. What are all the possible ways you can 10x that? Think about it, you only need $9,000.
Frankly, at this level, one of the fastest ways to make that $9,000 is to get a good job and start saving. You didn't expect this answer, did you?
If you are able to save $500 every month, your goal is only one and a half years away. There are several ways you can shave a few hundred dollars from your monthly expenses including downsizing, taking in roommates, cutting cable (...who is still paying $200/month for cable TV?), reducing your trips to Starbucks, stop going to restaurants and more. Nothing sounds particularly fun, but smart budgeting, thrifting, and being frugal can actually make you feel better about your finances and yourself. Plenty of online communities can help you with that if that's the place you start from.
But what if your saving account has $10,000. Good luck with saving the remaining $90k to 10x your money!
This is where investing comes in.
The typical ("high yield") saving account gives you something like 0.5% a year on your balance. I'm sure that you have heard of the magic power of compound interest, but at this rate, it would take 139 years to double your money and 462 years to get to $100,000, 10x your initial deposit.
Forget about bonds, at the time of writing, in early 2021, they won't help you get to 10x your money in your lifetime either.
You need 10% per year returns to 10x your money in 23 years. This is something you might be able to achieve by dumping your money in a broad market index at the right time. 10% is not far from the average return of the S&P 500 during the last 100+ years. For example, it took from 1942 to 1962 for the market to 10x. Then again another 10x from 1970 to 1997. And from 1991 to 2021, another 20 years for the index to 10x.
SP500
You should also be able to notice, from this chart, that if you get in at the wrong time, you might need to wait significantly more than 20 years. For example, if you got in at the peak of 1999-2000, your money would have returned exactly zero percent after 11-12 years. What a blow.
Actually, you are aware of inflation, right? The same $10k that you could have used to buy your family a trip to Italy in the summer of 2000, was only getting you a trip to Florida in 2011, because the cost of airplane tickets, hotel rooms, and restaurant meals all went up while your money went nowhere.
How can you 10x your money in just a couple of years then?
What you need - and this is just plain math, is for your money to double every year for about 2 years and a half. Plenty of stocks do that, the hard part is to find them between the thousands that go nowhere and the hundreds that go bankrupt at the same time. In the next chapters, we will discuss several of these stocks.
Is finding a 10x investment life-changing? It's definitely an amazing investment return but it can hardly take you directly to retirement. For example, if you consider 10 Million dollars enough for you and your family to retire today and enjoy a great life, you still need to start from 1 Million and 10x that. If you had $1M, would you have the guts of putting it entirely in a risky investment? Any sane financial advisor would recommend diversifying your investments: a little in real estate, a little in bonds, some more in index funds, and the rest to play with risky investments. The reality is that, in the game of investing, very few people make it big in just a few years. What you should strive for is consistent investments for 10-20-30 years, avoiding being stupid, gambling, and Ponzi schemes.
