I am going to turn $25k into $1mil in 5 years trading in the stock market.
You’re probably asking yourself if you read that right. The answer is yes. I’m going to become a millionaire and it’s going to be a fun ride. I like simple and you will learn that about me as read my blog. So if I’m keeping it simple the money ONLY has to double 5.25 times. I am going to be writing about my journey in my blog so you can come along and experience all the fun with me. I am going to be writing about my trading strategy that is so simple you may think I’m simple. And how I navigate through the bipolar market.
First I’m going to write a little about how I got here.
I first started getting curious about the stock market back when I was in high school. I graduated in 1996 so I’ll date myself from the start. Back then I would watch the financial news and try to understand what was going on even though I had no clue what they were talking about. For some reason, the large amounts of money moving on a daily basis highly intrigued me. So I thought to myself if I could just get a piece of the action one day I can be rich.
When I went into college and got into the business school I started doing those play portfolios where you had $100k of play money. I had a lot of fun with it, pretending to make a lot of money. Somehow I thought if I could do it with play money I could do it in real life. Do you all remember the movies like the Boiler Room? I loved those movies. I thought I could be rich just like them.
My interest kept building as I got hired on at a large brokerage firm (who shall remain nameless until the buy a banner on my website) and got my Series 7 license. So at that point it got real. I was learning the inner workings of the stock market. It was the year 2000 at that time when the tech bubble burst. So I walked right into a huge selloff. I saw people losing their money like crazy. All of a sudden, I learned how QUICKLY the stock market can make you broke. I also learned that you cannot be emotional with money you put into the stock market or you will lose money. Additionally, I started to see the factors outside the market itself that contribute to those emotional decisions, which I will write and/or rant about that a lot more about that later.
At that point, I still had not put money in the market. Well, because I didn’t have any. So I saved up $2500 and was finally able to open up a brokerage account in 2001. I started buying up penny stocks and doubled the money shortly thereafter. So I know this doesn’t sound like a lot of money, but it was to me back then. The rush of seeing the money grow so quickly was unlike anything I had ever experienced. I would later learn that part of this game is not to get too high when things are good and not to0 down when things go bad. See previous paragraph about emotional decisions.
Either way, I was excited because I had visions of my account continuing to multiply. Then life started to happen so I had to pull all the money out sooner than I wanted to. I did get to keep most of the gain but selling sooner than I wanted to cost me future gains. I will write more about timing and opportunity cost later as well. Unfortunately, there was nothing I could do about it because I needed the money. BAD!!!
I left the job at the brokerage after a few years and while I still really wanted to invest in the market I didn’t have the money to invest so I was out of the market until 2006. I opened up a new brokerage account and threw $5000 at it. Again, playing with penny stocks. This time around I started off fast again and doubled it in short time. Unfortunately, one of the stocks I had most of my money in had what we’ll just call some issues. The result was that I saw that stock eventually become worthless. So I had lost most of my money. That was a very humbling experience to double money quickly and then end up losing most of it. That really sucked, but I still wanted to keep trading. It was time to save up some money again.
I was out of the market again until 2009. Somehow losing most of my money a few years earlier didn’t keep me from putting more money, newly saved mind you, into a new brokerage account the early part of 2009. This time around I had made the decision to buy a house by the end of the year. So this was my way of saving up for a down payment. This time I knew it was going to be short term because I was going to get my down payment out of the market and get out. I know it sounds crazy and I don’t recommend doing this. The even crazier thing is it worked. So now I had a home, which has turned out to be an awesome investment, but had no cash to trade with. So back to saving for my next shot at it.
Fast forward to late 2015. I had been out of the market for what seemed to be an eternity and I was itching to get back. So I put $25k into a brokerage account and started day trading. And that is where I got my idea of turning it into $1mil. So this is how I thought it was going to happen. I hope you are ready for some earth shattering revelation. I am going to buy low and sell high. The concept is so innovative and so creative and more importantly so simple that it’s going to make people question all the convoluted strategies out there. I’m going to buy “highly rated” stocks that have been beat up and sell them when the market corrects. Conversely, I will short sell overpriced stocks and buy to cover when the market corrects. That is IT.
So I put the strategy to work and it started off hot. And I mean real hot!!! Then the worst start in the history of EVER happened at the beginning of 2016 followed by Brexit later in the year. The interesting thing is that I was still making money before I came crashing back down to earth. There were 3 stocks that I held too long that I ended up having to sell that wiped out my gain and even had a loss. (LCI, GILD and KORS) And if that wasn’t bad enough life happened again and I had to withdraw money before I was ready to. I know that is the second time I write life happened and I will elaborate on that as time goes on. But at that point turning $25k into $1mil had to be put on hold. But…
You should know by now that I’m not going away. So I’m back at it again. Get ready for the ride because it’s going to be fun one…