My financial goal, an assesment and some questions..

[steve fleming]

Back to the $1mil in 10-15yrs , realistic ?

Definitely is. I am 35 and achieved that goal (from a zero base) 2 years ago.

I now have a mortgage free house and a substantial investment portfolio and no debt.

Made the most money from micro-cap investing (sub $10m m/c) and building positions when no one else was interested in them. I am happy to take big risks and average down where possible, because (and this will sound arrogant) I back myself as having done more research and have better skills and market knowledge than the average investor.

Have had countless multi-baggers and a few 20/30/40 baggers, which obviously have a massive impact on your portfolio...there have been many disasters as well, but you put that behind you and get on with the next opportunity.

The key for me now is position sizing - I start small with high risk option/micro-cap investments and then as the company de-risks the market value of my investment will increase or I will convert options and then end up with a meaningful size holding in a lower risk company.

You also need to have a handle on the broader dynamics of the market. For example at the moment you don't want to be stuck with a whole lot of resources investments (with junior explorers at a 3 year low). So over the last couple of years I have been leveraging wins from resources plays into investments in other sectors.

There are always opportunities, you just got to be across all the various sectors and industries, try and follow as many companies as you can, do your research, then pounce when the opportunity presents itself.

[Lizard]

So I have gone back to the book I was reading last night and thought I'd post the info from it here .

Get rich stay rich by Martin Hawes and Joan Baker

pg 42
"...throughout the book as benchmarks to remind you of what you are aiming at:

$1 million (the amount you will need)
15 per cent (the performance you will need); and
10 years (the time you will take)

It goes on to say your net worth has to be at least $1 million in order to be finically free. It makes mention this is possible provided you don't have too much wealth tied up in your home and live a modest lifestyle.

It might be just taking this out of context, but to get to $1m in 10 years with 15%pa (after tax) is either going to take $50k per year in savings or starting with a $250k inheritance.

And then you can start saving for the house.

Maybe have a play with the calculators at sorted.org.nz and see what works for you.

[steve fleming]

Definitely is. I am 35 and achieved that goal (from a zero base) 2 years ago.

I now have a mortgage free house and a substantial investment portfolio and no debt.

Made the most money from micro-cap investing (sub $10m m/c) and building positions when no one else was interested in them. I am happy to take big risks and average down where possible, because (and this will sound arrogant) I back myself as having done more research and have better skills and market knowledge than the average investor.

Have had countless multi-baggers and a few 20/30/40 baggers, which obviously have a massive impact on your portfolio...there have been many disasters as well, but you put that behind you and get on with the next opportunity.

The key for me now is position sizing - I start small with high risk option/micro-cap investments and then as the company de-risks the market value of my investment will increase or I will convert options and then end up with a meaningful size holding in a lower risk company.

You also need to have a handle on the broader dynamics of the market. For example at the moment you don't want to be stuck with a whole lot of resources investments (with junior explorers at a 3 year low). So over the last couple of years I have been leveraging wins from resources plays into investments in other sectors.

There are always opportunities, you just got to be across all the various sectors and industries, try and follow as many companies as you can, do your research, then pounce when the opportunity presents itself.

PS - you should also read Peter Proska's story in Matthew Kidman's "Bulls, Bears and a Croupier:The Insider's Guide to Profiting from the Australian Stockmarket" as inspiration.

[Halebop]

I'm with you Liz, the math of 15% and $1m assumes an improbable rate of saving for the average kiwi or a heck of a lot of leverage (and therefore probably no corrections either). My calculator kind of gets me there at a saving rate of $15,000 per annum and 80% leverage but it's a bit rich to expect property or leverage to produce sustainable returns likes that.

[Stranger_Danger]

Firstly, I believe it is very possible to create a million dollar net worth in 10 years. Frankly, I did my first in a lot less than that.

However, you haven't provided the two crucial bits of data

(a) What is your annual income?

(b) Do you have a wife and/or kids?

The truth is, you're not gonna get there by putting $1000 a time on a whole lot of penny dreadfuls.

The best things you can do involve saving (the vast bulk of your annual income, and, as your income goes up, never increase your expenses), genuine frugality, really long hours and other tough choices - investment returns are just a hopefully big cherry on the top.

I'm happy to write up a long post if you're actually interested, but most of my advice will involve things like "find a friend and live in their garage until you have your first million", "how to stay awake for a 30 hour shift" and "100 little ways to save money and annoy all your now ex-friends".

The truth is, most people will roll their eyes and if you have a wife and kids, they won't let you do any of it anyway.

I'm not saying you've left it too late, but you're definitely at an age where you should have done the hard part when you were young, had limitless energy, and the alternative to getting rich was drinking beer and talking rubbish.

[toast2success]

Great to see more awesome advice and thoughts coming through. Much appreciated.


I realise $1k is nothing in terms of launching myself into the market so will direct it to my debt.

Steve Fleming, thanks for the reading tip, I'll try and find that book.
Stranger Danger, your pretty much bang on re me taking the alternative path (beers and talking rubbish).

So I guess my next step after paying the debt should be either looking at saving enough to enter the market (maybe a $5k parcel) or perhaps a emergency fund ? How many people operate with an emergency fund ? A lot of my reading inficates to have anywhere from 3 months to 1 year of expenses saved?

I'd love for this thread to keep rolling , so keep on feeding it with info. It's helping me a lot so I like to think it may help/inspire another person that checks it out.

[Aaron]

Definitely is. I am 35 and achieved that goal (from a zero base) 2 years ago.
You also need to have a handle on the broader dynamics of the market. For example at the moment you don't want to be stuck with a whole lot of resources investments (with junior explorers at a 3 year low). So over the last couple of years I have been leveraging wins from resources plays into investments in other sectors.

There are always opportunities, you just got to be across all the various sectors and industries, try and follow as many companies as you can, do your research, then pounce when the opportunity presents itself.

That is inspirational Steve. How much time did/do you spend a week reading and researching. Just to get an idea of the kind of committment required. I may not have the intelligence or the balls to succeed even if I did make the effort but still interested to know. Also do you have a fulltime job as well?

[toast2success]

That is inspirational Steve. How much time did/do you spend a week reading and researching. Just to get an idea of the kind of committment required. I may not have the intelligence or the balls to succeed even if I did make the effort but still interested to know. Also do you have a fulltime job as well?

Yeah great question...I'd be keen to hear these answers as well....

[CJ]

Yeah great question...I'd be keen to hear these answers as well....

Since we are being checky, how much capital did you put in to start and how much capital have you introduced over time (or has it all been from portfolio growth).

[toast2success]

Oh and another question for all...I have to pay tax this year and have the money sitting aside...I was thinking I'd be better off with it in a term deposit until the time to pay it rolls around...is this quite a common practice ?