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Ask HN: How do I turn 100K into 1 million?

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71–80 of 138 posts

Re: Ask HN: How do I turn 100K into 1 million?

#71

Ahoy! Sailing is great, I've got a personal goal to do the SHTP in 2014. You have a terrible investment track record and a good programming track record. Go with your strength. Since you have a short attention span, you should focus on short projects that you can ship quickly. Bring maritime weather / charts to the iphone, I'd buy that :-)

Some of that already exists, check out the App Store. I'm thinking an iPad would make a decent chart plotter, though :-). Now, if I could only find a weather-proof enclosure!

A friend of mine uses a Ziploc freezer bag. She can still operate it through the plastic, apparently. Haven't tried it myself.

EDIT: I just tried wearing a Ziploc sandwich bad as a mitt and operating my iPad. There's apparently no degrading of the touch screen! I'll have to pick up some large Ziploc bags the next time I'm at the store.

Re: Ask HN: How do I turn 100K into 1 million?

#72

From what you have written, it seems like you are a hard core programmer.If you like programming then shifting to some other profession to earn more money , might not help much as you will always have the craving to sit on your computer and create code. Trading is good but risky, i would suggest not to risk all your hard earned money there though you might allocate a smaller portion for this. Since you mentioned you…

I don't have a craving to sit in front of my computer and create code. I have a craving to learn things, get to the bottom of things, solve tough challenges.

I also like selling. I spent a year as a commission-only sales person, selling trading software over the internet. I think I did reasonably well and I enjoyed it tremendously.

I did notice that I missed the technical challenge, though.

Re: Ask HN: How do I turn 100K into 1 million?

#73
post #60

Earlier quoted context omitted.

Spanish real estate has been tanking. Over 1.5mm units unsold. I think it's a good time to buy, perhaps towards the end of the year. My wife is a self-employed travel agent catering to the Russian market (I'm Russian/Cuban). I she would love to go into property management, specially if the property is ours. I'm reading about LBOs in "Barbarians at the gate" and I think it's a bit like that. You need to figure out the…

"You need to figure out the potential rental income of a property and convince the bankers that it's enough to service the mortgage debt. All the while putting as little of your own money in as possible." This last part is not true. 100% leveraged properties are hard to make serious money on, and it makes for a fragile business (you only need one down cycle to bring down the, ehm, house). Average return on rental in…

Roel, I was thinking of a regular 20% downpayment, maybe a little more. That's about 30% with closure costs in Spain.

Re: Ask HN: How do I turn 100K into 1 million?

#74
post #45

"I rent but paid cash for a recent BMW last year" One tip I can offer is not to do things like that. A house or condo is generally an investment that increases in value, so you should buy that for yourself instead of buying it for your landlord. And paying a lot for a car that will be virtually worthless in 10 years won't help you achieve your goal.

Buying isn't always a better idea than renting. The OP lives in Spain, but the nytimes has a US based rent/buy calculator that is very good:

http://www.nytimes.com/interactive/business/buy-rent-calcula...

It basically comes down to how long you'll be in the house, and how much you think it will appreciate over that time. There are plenty of scenarios where renting comes out ahead.

Re: Ask HN: How do I turn 100K into 1 million?

#75
1) take $50K to a casino 2) buy a color on the roulette wheel 3) set up a bet that has some fun characteristics ... maybe a 10% chance of paying 1m and a 30% chance of losing entirely (with some variety in the middle).

Let the wheel spin and enjoy the adrenaline. Worst case you go back to your lucrative consulting gig. Consider that you already paid the amount you lost in taxes and you don't even miss it.

Re: Ask HN: How do I turn 100K into 1 million?

#77
Here's an idea. There is an instrument called a "straddle option" that is essentially a bet on volatility. I think it'd be interesting to try to formulate a strategy that made aggressive purchases of these around various product announcements.

edit: Perhaps this wasn't the wisest comment ever, but not sure why it was modded down.

Re: Ask HN: How do I turn 100K into 1 million?

#78

Earlier quoted context omitted.

What makes it so clear that buying options is a "guaranteed way to lose money over time". Derivatives are mathematically zero sum minus costs. That's why. For traders in aggregate, they are a certain loss. Tack on leverage via credit cards, well... Is this deliberately intended to be disparaging Sort of. The guy needs to realize that he's capable of really stupid mistakes before he opens that fresh new brokerage acco…

1995 was 15 years ago. I advanced a bit since then.

I'm thinking that trading may be my best bet.

I traded twice in ... ugh... 15 years or so.

I advanced a bit since then.

Yeah right. You might want to put your money in this:

https://online.citibank.com/US/JRS/pands/detail.do?ID=SvgCDs

Re: Ask HN: How do I turn 100K into 1 million?

#79

Earlier quoted context omitted.

How did you find work at an investment bank without being sufficiently savvy to realize? Is this deliberately intended to be disparaging? 1. There are plenty of people at investment banks whose principal function isn't to understand options. 2. What makes it so clear that buying options is a "guaranteed way to lose money over time". At any rate, the only people profiting on derivatives are the market makers. And even…

What makes it so clear that buying options is a "guaranteed way to lose money over time". Derivatives are mathematically zero sum minus costs. That's why. For traders in aggregate, they are a certain loss. Tack on leverage via credit cards, well... Is this deliberately intended to be disparaging Sort of. The guy needs to realize that he's capable of really stupid mistakes before he opens that fresh new brokerage acco…

[deleted]

Re: Ask HN: How do I turn 100K into 1 million?

#80
post #5

"Trading" is not the answer. "Investing" is. Read The Intelligent Investor and Security Analysis, both by Benjamin Graham; and F Wall Street by Joe Ponzio (His website fwallstreet.com also has a number of gems. Particularly, his post about how to value a business http://www.fwallstreet.com/article/25-calculating-the-value-... ) If you read those materials, you will learn how to invest and using the approaches set out…

I'm going to invite a flurry of disagreement here, but I'm just going to say it. Investing is not the answer, trading is.

II and SA are phenomenal books, but they are also more relevant to a different time in market history. The basic tenets certainly hold true. (Ben Graham famously loved buying companies under book value. Thats still a winning bet and will continue to be.)

Its important to realize the macro picture here as well though. The last 70 years have produced tons of literature saying that long term growth is the way to do it and that int he last 70 years long term investments have outperformed. This period of "proven returns" coincides with the US rising to the world superpower, becoming the richest nation on earth, and spending beyond our means.

I have a massive faith in America, but its irresponsible to not consider that times have changed. The next 70 years could be like the last 70, but we stand at a social/economic/global power precipice which could imply a dramatically different America in 10 years. If the American economy sucks hard for the enxt 10 years, returns are just going to suck. Long buy and hold portfolios have won in large part also because the American economy has expanded for the last 70 years.

The other huge difference is that HN is comprised primarily of extremely computer savvy people. The tools wielded by the readers here are uniquely suited to tackle financial problems that can produce excess returns that far exceed

The risks aren't significantly higher, yet the upside is disproportionately greater when utilizing the techniques (computing) and infrastructure (electronic markets and cheap execution) that have become available in the last 10 years that did not exist in almost the entire duration of the period that produced all of the "buy and hold is the only way to go" literature.

HN people are smart. REAL smart. That's why a lot of people have read mountains of literature to educate themselves. Unfortunately, the success of buy and hold strategies in the last X years produced a bias towards that sort of literature and everyone's drank the kool-aid.

The last 5 years, and even more the last 2 years have democratized the quantitative trading process, exposed the tools to those not in the industry, and changed the face of finance.

There's still a place for the Intelligent Investor. But if you're the average HN reader, Ben Graham style investing isn't your best shot in finance. Quantitative trading is. Both will take a lot of work. It won't be easy. But if you're going to invest serious time, think about how much the tools and the game have changed in the last 2 years and ask yourself if you really think that all the literature that predates this change is indicative of the new world.

I too believe you can turn 100k to $1mm. and I think you can do it a lot faster.

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