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

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

#91

Post by rjett »

joelreymont wrote: post #82
rjett wrote: post #47

Invest in adderall and see where that takes you. Joking. In all seriousness, drop the desire to turn 100k into 1 mil in x amount of time. That will lead you into wreckless, speculative behavior. Trading is tempting for you because it offers instant feedback. With one or two successful trades, people tend to extrapolate their returns into future returns, believing that it's possible to repeat these trades over and ove…

What led to my blockbuster year? Luck and my desire to work more. I used to work 1-2 weeks out of 4, that was enough for everything since my burn rate is low (3-3.5K EUR/mo). I sailed for about 8 weeks in the first half of 2008, for example. The relaxed work style didn't let me save much, though, not enough to get a shot at independence.

I guess "independence" is in the eye of the beholder. Working 1-2 weeks out of 4 and sailing around sounds like a pretty nice level of independence for someone like me. If your idea of independence is to never have to work a day of your life ever again if you choose not to, it sounds like the solution would be to "work more" in the near term. It sounds like you're a pretty bright fellow and when you do work, your services are highly valued. The more you work, the higher your odds of "getting lucky" are.

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

#92

Post by jimbokun »

rjett wrote: post #47

Invest in adderall and see where that takes you. Joking. In all seriousness, drop the desire to turn 100k into 1 mil in x amount of time. That will lead you into wreckless, speculative behavior. Trading is tempting for you because it offers instant feedback. With one or two successful trades, people tend to extrapolate their returns into future returns, believing that it's possible to repeat these trades over and ove…

"With one or two successful trades, people tend to extrapolate their returns into future returns, believing that it's possible to repeat these trades over and over again."

Worse, he describes how he has tried trading various times with no success, and still thinks trading is his best bet for meeting his goals.

Sounds more like a compulsion than a well thought out strategy.

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

#93

Post by arthurdent »

grandalf wrote: post #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.

Its a fairly well documented phenomenon that option volatility increases going into earnings then immediately deflates after the fact.

An at the money "straddle option" is essentially purely a volatility play, but the problem is that once the stock moves, the "straddle option" accumulates various other risk factors that are harder to manage.

This is also why you can't just sell the position knowing that the volatility will go down after earnings, because the change in the risk characteristics other than volatility may be sufficiently costly so as to offset the gains from the decrease in volatility with a short straddle position.

This particular play is fairly common though and many option traders who feel they have insight into the magnitude of the future move relative to its pre-earnings pricing will make plays on it (largely based on historical evidence or earnings predictions).

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

#95

Post by mkramlich »

Trading sounds like a very risky way to try to grow the $100k you worked so hard for, esp considering you have a wife and kids. My best non-expert advice would be to try starting a profitable small business that leverages all your strongest skills and passions, and that can evolve into a passive income stream. That stream plus possibly more contract/wage work over the next 5-10 years could take you to $1 million. Take this with grain of salt.

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

#97

Post by jimbokun »

arthurdent wrote: post #80
yoseph wrote: 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…

"I have a massive faith in America, but its irresponsible to not consider that times have changed."

So diversify with foreign assets.

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

#98

Post by tullius »

mynameishere wrote: post #50

Then AOL ran out of capacity and I was back to my 700 bucks after paying about 200 in commission to Bear. How did you pay 200 dollars in commissions on a 700 dollar trade? How did you find work at an investment bank without being sufficiently savvy to realize that buying options on a credit card and then paying a gigantic commission is an absolute, guaranteed way to lose money over time? I'm genuinely confused here.…

Bear Stearns loved to hire autodidact college dropouts.

"Under Greenberg’s control, Bear’s profits grew quickly. At its peak it employed almost 15,000 people. While most Wall Street firms preferred to hire Ivy Leaguers, Greenberg looked for people with “PSD” degrees, by which he meant “poor, smart and a deep desire to become rich.”"

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

#99

Post by joelreymont »

rjett wrote: post #91
joelreymont wrote: post #82

Earlier quoted context omitted.

What led to my blockbuster year? Luck and my desire to work more. I used to work 1-2 weeks out of 4, that was enough for everything since my burn rate is low (3-3.5K EUR/mo). I sailed for about 8 weeks in the first half of 2008, for example. The relaxed work style didn't let me save much, though, not enough to get a shot at independence.

I guess "independence" is in the eye of the beholder. Working 1-2 weeks out of 4 and sailing around sounds like a pretty nice level of independence for someone like me. If your idea of independence is to never have to work a day of your life ever again if you choose not to, it sounds like the solution would be to "work more" in the near term. It sounds like you're a pretty bright fellow and when you do work, your ser…

Aye!

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

#100

Post by WestCoastJustin »

eli wrote: post #22
samt wrote: post #21

Go to law/medical/dental school and in about 10 years open your own practice. Anything else is a lottery and you should be playing for the fun of it, not to make money.

And school isn't a lotto? You know many happily employed recent law school grads these days? Or many young doctors who are confident they'll retire rich?

School can be a lotto if you get a degree in aboriginal affairs or something similarly obscure.

Becoming a md/lawyer/dentist is a pretty sure thing. At least where I live (Canada) these professions are in demand. You can always move to smaller communities if needed.

I think the parent comment was pretty good advice.

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