Investing in the stock market is one of the few topics I never get tired of talking about. Reading stories about average Joes and how they built wealth really gets me excited!
Today I want to share a thread I found on Reddit. It really shows the power that introducing your children to investing can have.
I’ve been browsing Reddit lately, as occasionally participants on the threads there will link to my articles.
Last night, I found a post that excited me and warmed my heart. As you can guess, it was about money invested in the stock market that grew exponentially and substantially over time.
The poster, who goes by the handle LordPounce, told a wonderful story about how he was introduced to investing.
As it turns out, LordPounce’s father was a stockbroker. When Lord was 18 years old, he received a letter from his father’s brokerage firm addressed to him. When he opened the letter, he realized it was a brokerage statement that had about $10,000 invested in 10 different stocks.
When he asked his father about the letter, his father’s reply was “now that you’re 18, it is your money and you can do with it whatever you like; however, my recommendation is that you discuss it with me first.” As Lord was about to enter college, his father advised him to forget about the brokerage account until he graduated.
Following his father’s advice, he did not check his brokerage account again until he was about 22 years old. In that five-year period, he discovered, his account had doubled in value!
These results made him so excited that he immediately took a few thousand dollars he had saved and invested in more stocks.
After graduating from college, he moved overseas and took a rather low-paying job. Throughout this time, he was committed to his investment account, and never touched one penny over the next ten years.
Throughout that time, we had the Great Recession, in which the stock market fell by 40%. One of the most important things our friend was able to do was to not panic and sell at the worst possible time. He held on to his investments, and eventually the market recovered.
A few years later, his grandmother passed away, and left him $100,000. He put it almost entirely into stocks.
Throughout the next five years, he would occasionally sell a little bit to fund a vacation. But he left the majority of it alone. For the most part, he didn’t even look at his account.
A few years ago, he asked his sister – who is now his broker, since his dad has retired – what his account was worth. She told him at the time that it was worth $500,000.
Fast forward to 2019, and his account is now over $700,000.
His ultimate goal is to be at $2,000,000 before he is 50. He is currently 37.
This article exemplifies 1) the power of compound interest; and 2) starting out as young as possible. This young man is 37 with over $700,000 put away for retirement. I don’t think there’s any doubt he will hit $2,000,000 before he’s 50 – and by the time he’s 65, I bet he could be at $5,000,000 or more!
I absolutely love finding stories like these…and will share them every chance I get!
Check out the whole Reddit thread here.
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