How to turn \$100,000 into \$1 million in 10 years from trading

The purpose of this website is to show you that anyone can become a successful trader, as long as you know what you’re doing.

1. Working smart and in the right direction is much more important than working hard.
3. Using a systematic trading strategy is much more effective than using a discretionary trading strategy. Systematic strategies take the guesswork out of trading.

Now here’s the secret. You don’t need to be a full time trader to consistently beat the stock market index over the long run (in fact many professional hedge fund managers underperform vs the index). You just need to develop a sound strategy, stick to that strategy, and tweak it every once in a while to make it better.
In How to become a successful trader with a small account I said that “you can’t turn \$10k into \$1 million. It’s just not realistic”. One of my readers emailed me and asked “what about \$100k? Can I turn \$100k into \$1 million?”
The answer to that is a resounding “yes”.

How to turn \$100k into \$1 million in 10 years from trading

This is not going to be easy. Don’t let anyone fool you. This wealth creation process might take more or less than 10 years depending on your own circumstance. But 10 years is a conservative estimate. We always want to underestimate our own capabilities when trying to achieve a goal. That way we give ourselves plenty of leeway for errors along the way.
10x’ing your trading/investment portfolio from \$100k to \$1 million in 10 years has 2 components to it:

1. Develop a  QUANTITATIVE trading strategy that yields an average of 18% per year. 18% per year is not an unattainable target. It is achievable as long as you know what to do. Even our free trading strategy yields an average of 17.2% per year.
2. Save \$20k each year and put that into your portfolio.

Here’s the math:

1. The portfolio starts with \$100,000
2. Year 1: \$138,000
3. Year 2: \$182,840
4. Year 3: \$235,751.2
5. Year 4: \$298,186.4
6. Year 5: \$371,860
7. Year 6: \$458,794.8
8. Year 7: \$561377.8
9. Year 8: \$682425.8
10. Year 9: \$825262.5
11. Year 10: \$993809.7

Growing your portfolio is much easier if you plow your savings into it AND achieve above-average returns. If all you did was earn 18% per year and you didn’t reinvest in your portfolio, \$100k would turn into \$523k after 10 years. Having a continuous flow of additional funds into your portfolio will make your portfolio grow faster and faster.
So does saving \$20k a year seem impossible? Not really. All you need to do is breakdown this lofty goal into 2 smaller goals:

1. Save \$850 from your current salary each month.
2. Earn an additional \$850 in side income each month.

I’ve always been interested in business, even before I got into trading. You’re not actually building anything when you trade – you’re just pushing pieces of paper around. With a business at least you are having a meaningful impact on the world. That’s why I’ve always followed the latest business ideas throughout my career, even though 99% of those business ideas had nothing to do with me.
So going forward, I am going to publish one post each weekend highlighting a side-business idea that you can try. I don’t have the time to try these ideas, but at least I can show you what other people are doing to make money aside from their day jobs.
On that note, I’d like to highlight my friend Chris’ side-business. Chris is a urologist  who’s passion for extreme travel and wilderness photography has taken him to many exotic places. This means that he also gets some pretty amazing shots. Like myself, Chris is a big fan of the outdoors. Go to his website Exploring Light Photography to check out his portfolio.
People like Chris prove that you can run a successful side-business that’s totally unrelated to your day job.
FYI, I am in no way affiliated with Chris’ work and nor do I receive any monetary compensation for this shoutout. I just truly admire his work. Here are some of his shots.

I’m particularly fond of this one. I pretty much love everything that has to do with the surf, beaches, and ocean.

1. wow, incredible pictures! I’m an avid traveller and not bad photographer, but hardly can find anything comparable to these in my 300 GB or so of pictures. Well done, Chris!

2. There may be an alternative (or complementary) strategy, keeping in mind that we’ll definitely see a bear market and recovery from it in the next 10 years:
1. Read Troy’s blog daily, along with financial sites, to build own opinion.
2. Go 100% cash when Troy does so (MLT model signals SELL).
3. Stay tight on cash during bear market, not lured by rallies nor “buying opportunities” (not making my mistake that I made in June 2008), until the MLT model signals “buy”.
4. Open all valves buying 100% UPRO (I would add also TQQQ) on the “buy” signal. Have steel balls to sustain painful corrections.
UPRO was incepted in June 2009 (3 months into current bull market), was 7.20 then. Now is in 130s, was 172 on its peak in late January. Someone who would buy and hold it all 8.5 years, would have around 20x initial value. Well, on one hand, the tailwind was that it was all bull market, but at the same time we should admit that this bull market has been quite anemic (nothing to do with late 90s frenzy), only 2009, 2013 and 2017 were really good years. Also that return would come from purely idle strategy, after surviving 2011 and 2015-16 major corrections (MLT model would help avoid them, at least partially).
I would personally use both.

3. Woww 17.2% is awesome, I am going to be no way near that number :).