It’s tempting to dream about becoming an overnight millionaire.
All you need to do is pick the right stock or startup investment, and you could be swimming in a bath of money like Scrooge McDuck.
But the truth is, the wealthiest people I know didn’t “get rich quick.”
Instead, they got rich slowly, by making smart moves again and again.
That said, certain strategies can dramatically speed up your path to becoming wealthy…
And today, I’d like to share one of them with you.
Turning $1,000 into $1 million+
If you’d invested in Amazon’s stock at its IPO, you’d be up by more than 125,000% right now.
That’s enough to turn $1,000 into more than $1 million. But Amazon went public roughly 25 years ago. On an annualized basis, that’s 33% per year.
33% is an amazing annual return. But keep in mind, Amazon’s an amazing company! It would be almost impossible to build an entire portfolio of “Amazon-like” stocks, where every one of them was a winner like that.
If you’re like most folks, you have a diversified portfolio of stocks or ETFs.
And in that case, your portfolio won’t return 33% a year…
Instead, on average, it’ll return closer to 6% per year.
A Long Road to Seven Figures
If you earn a 6% return per year, want to take a guess how long it would take to become a millionaire with a $1,000 starting stake?
Get this: 118 years!
But what if you were starting with a bigger number? For example, what if you had $10,000 to invest instead?
Well, even then, it would still take you more than 79 years to grow it to $1 million.
And even if you were starting with $100,000, it would still take you close to 40 years.
But I’m not telling you all this to depress you.
Instead, I’m doing it to prove a point:
It takes a long time to build wealth!
But as I mentioned earlier, certain strategies can help you speed things up.
Bigger, Faster Profits
Matt and I founded Crowdability to help investors like you invest in a new asset class:
Pre-IPO startup investments.
Why? Because they can potentially help investors multiply their returns many times over.
In fact, they’re one of the most profitable asset classes of all time.
For example, Cambridge Associates — a financial advisor with clients like The Rockefeller Foundation, Harvard University, and the Bill Gates Family Office — recently released a study.
It tracked investment returns across all asset classes over a 25-year period. It compared returns from stocks, bonds, and pre-IPO investing.
And over a 25-year period, pre-IPO investing was the highest-returning asset class by far:
Stocks and bonds returned low single-digits...
But investing in private companies returned an astonishing 58% per year!
At that rate, instead of waiting 79 years to get rich, you could turn a $10,000 investment into $1 million in just 10 years!
But here’s the thing:
You should NEVER invest your entire portfolio into private investments…
Reduce Your Risk!
You see, in addition to being more risky, private investments are “illiquid.” In other words, you can’t turn them into cash whenever you’d like. You need to wait for the company to get bought or go public in an IPO.
But that shouldn’t stop you from taking advantage of the extraordinary returns of this asset class.
You see, even if you allocated just a tiny portion of your overall portfolio to pre-IPO deals, you could still dramatically accelerate your path to wealth.
For example, look at this chart:
This chart shows what would happen if you invested 100% of your $10,000 portfolio into stocks and earned an average of 6% per year.
As you can see, after 15 years, you’d be sitting on just under $25,000.
But now let’s see what happens if you allocated just 10% of that portfolio — that’s just $1,000 — into pre-IPO investments, and kept the rest in stocks:
As you can see, your potential returns grew dramatically…
After 15 years of earning 58% a year on just a small portion of your portfolio…
You’d be sitting on close to $1 million.
That’s the power of adding pre-IPO investments to your portfolio!
It Still Takes Time
And that’s why Matt, our team, and I do what we do.
We understand the impact that pre-IPO investments can have on your portfolio…
And we firmly believe you should allocate at least some of your assets here.
Not only could this help you build greater wealth, but it could help you do it faster.
Happy investing.
Best Regards,
Founder
Crowdability.com
