20M net worth by 40 speed run brainstorm

I know there are numerous posts like these and most recommend just starting a business.Comment random ideas to achieve this. Obviously it is near impossible but I just wanted some ideas from the most ambitious individuals on the inter webs.Mine so far:-startup investing spam-individual stocks-marry rich

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Comments (58)

  • Developer in RE - Comm
Nov 13, 2021 - 4:28pm

Quality crypto projects. None of the meme coin shit.

  • Intern in IB-M&A
Nov 13, 2021 - 5:31pm

There's no good place. You have to conduct your own research.

As the poster above said, 10m sounds very easily achievable if you work in investment banking/high paying job and save aggressively. You can achieve that in 10 years if you stick to safe crypto investments, 5 if you get into lower cap coins.

Nov 14, 2021 - 2:52pm

Most of the coins are garbage but look at coin market cap website and take the coins that are ranked from 20-40. One of these will likely 10x. That's how I found Solana (which i sold out of eventually and put back into BTC). One alt coin I'm invested in right now is fantom. 

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  • Intern in IB - Gen
Nov 13, 2021 - 6:53pm

Edit: OP changed to 20M. Whatever.

Here is a serious reply, but also take my $.02 and throw it into doge. Rapid wealth accumulation is something I've started contemplating and no I don't mean winning a lottery ticket, become an allstar at a HF, or any other right tail outcome. However, I am going to assume that you start off in IB/etc at $150k (even UBS A1 got this much, right?) so basically any very high quality job with upside.

Now here are my assumptions: starting as an IB analyst NYC, staying in IB/PE (no b-school)

Year 1: $150k all-in = $95k after tax - 12*(2k rent+2k other expenses) = ~50k after tax (ignoring HSA, 401k, w/e)
Year 2: $165k all-in = $105k after tax - 12*(4k expenses) = ~60k after tax
Year 3: $300k all-in = $175k after tax - 12*(5k expenses) = ~120k after tax
Year 4: $350k all-in = $200k after tax - 12*(5k expenses) = ~140k after tax
Year 5: $400k all-in = $225k after tax - 12*(5k expenses) = ~165k after tax
Year 6: $500k all-in = $275k after tax - 12*(6k expenses) = ~200k after tax
Year 7: $600k all-in = $325k after tax - 12*(6k expenses) = ~250k after tax
Year 8: $700k all-in = $375k after tax - 12*(6k expenses) = ~300k after tax
Going to assume saving $300k each yr the next 10 years because careers are much less linear

15

Seems pretty easy, right?

Let's look at 12%

12%

Now lets say you think that CAPM rules and 9% is your expected return in the S&P over the net 18 years. There's no way we still hit $10M right?

9%

Damn, so it seems that if you can save and invest most of your IB/PE income you'll hit the goal as long as you can plateau at 300k savings (which is no guarantee depending on spousal needs and kids).Aggressive accumulation tacticsHonestly the boring "save your income in indexes, maybe use some leverage to hit the 12% mark" doesn't quite hit the serotonin spot for some so I'll put forth some reasonable investing strategies and hopefully others will chime in with theirs as well.

1. Hedged Levered indexes
This forum has jacked off to TQQQ a lot recently and I don't blame them; although it HAS to be hedged with TMF or else you are exposing yourself to undue risk. Quarterly/semi-annual rebalancing provides the highest IRR (27% since 1985, check r/LETFs for more backtests), and I would feel pretty comfortable keeping 30-50% of my portfolio in the TQQQ/TMF mix or other 3x levered funds.

2. Crypto
Opinions aside, this space has grown a lot and I see there continuing to be opportunity in this space. Maybe not necessarily BTC, but I think that staking SOL or ETH for a modest APY + appreciation can be a solid formula for success for a few upcoming years. After that, who knows

3. Options
Lol. This paired with Staking solana (got in at ~$120) has allowed me to take my ~$20k summer earnings + FT signing and turn it into nearly $55k from early Sept until today. I will say this method has extreme outcomes and you absolutely need to not yolo before you know what you're doing. Some strategies I employ are 1-5DTE slightly OTM TQQQ calls, tight credit spreads on companies that are oversold in the short term (I have been racking up 10-25% weekly yield which is a big reason for my growth. I can elaborate further, but I think further interest in this you should visit r/thetagang

4. Real estate
FHA loans, BRRRR, etc are great ideas as well for risk-adjusted gains. Personally, I'll be in NYC so I won't really be able to partake in such, but if you're in a MCOL or LCOL, this can be a fantastic way to get great returns via leverage. WSO isn't super great on this stuff so i'd check out biggerpockets.com or maybe reddit? 

5. Less appealing stuff for me
Tbh, angel investing, etc doesn't really make sense to me but would love to hear more if anyone is willing to share successful strats they have found here.

Nov 13, 2021 - 7:22pm

Thank you for the lengthy response. Stupid question but how do most people invest in the TQQQ mix? Just through your own brokerage? And is it a 50-50 mix?

Also angel investing to me seems like the best way. Just dumping it into 5-10 startups and crossing your fingers. I have no expertise on this though.

Nov 14, 2021 - 4:51pm

I'm guessing you're 19-20 years old. Living through multiple bear markets, here are my thoughts. 

1. Please, please don't listen to the posters here suggesting you to 100% DCA TQQQ. Even in the 60/40 UPRO/TMF split, you would have lost everything in UPRO if we had a 33% SP500 dip during covid rather than the 30% dip we had instead. If we have a repeat of the 2000/2007 crash, you would lose everything in these levered products

2. The salaries assumptions that the intern posted above is for TODAY's salaries. In 2015/2014, MF PE paid 250k after a 2 year IBD analyst stint that paid roughly 120k. 20 million in 19 years is not going to be worth the same as it is now. Furthermore, you could get laid off/have poor bonuses. You are assuming 19 years of constant/consistent earnings which is not typical in a finance career due to fund performance or bear markets.

3. If you want to hit 20 million by 40 through a job without taking excessive risk in your investments, you will have to focus on EARNING MORE in your job so you can save in excess of 300k. Think partner at PE/HF/IBD. You're also not going to be living on 72k a year when you're in your late 30s (lol). 

4. A lot of the younger posters here haven't lived through a crypto bear market. In 2017, I went from bitcoin -> ethereum -> small cap coins. I took 30k to nearly 600k. I nearly lost everything in the 2018 crypto bear market, but was still able to retain 2 bitcoins. 

See below, please tell me which projects still exist? 

https://coinmarketcap.com/historical/20171217/

I believe in crypto, but only have less than 20 percent of my crypto allocation these days in altcoins/small projects as the downside is quite severe. My remaining 80 percent is in bitcoin and Ethereum. 

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If you meet anyone who has hit 20 million by 40 today self made, I would imagine nearly 70% of them started/own their own business. Maybe 20% joined a pre-ipo company at the right time or made partner at solid PE/HF/IBD shop. Maybe less than 10% got there through lucky/levered investing while holding a normal finance job. 

You are better off starting your own business to hit that number. Alternatively, if you can hit 10 million by 40 through a finance job, maybe another 5 years of compounded 10% growth and reinvested 300k every year could get you to 20 million by 45 if the market doesn't crash. 

Good luck. 

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  • Intern in IB-M&A
Nov 14, 2021 - 7:16pm

There won't be a 2017 bear market v2. The crypto market is too big, the entire financial system has evolved. People just "buy the dip" on every occasion. There's too much money floating in our economy, inflation is through the roof

  • Prospect in IB-M&A
Nov 13, 2021 - 10:09pm

Marrying rich is honestly the most accessible--maybe the only accessible option--for most people here, especially if you attend an old money legacy school like the Ivies (Cornell excepting), UChicago, Duke, etc. Every other person I've met here went to either an elite northeast prep school or is the child of some wealthy aristocrat in East Asia. Skip the meritocratic schools like MIT, Caltech, and even Stanford to a degree

Funniest
Nov 14, 2021 - 1:10am

Assuming you're 25 now, find a way to make ~$3,600 a day for the next 15 years. You best bet is to move to SF and visit 5 stores per day and resell your acquired merchandise at a ~20% discount (6 stores if you're really looking to make sure you hit your target). You got this!

  • Prospect in IB-M&A
Nov 14, 2021 - 12:49pm

Forgot to mention there's a barrier of entry. Someone white, for example, would not be able to pull this off

  • Partner in RE - Comm
Nov 16, 2021 - 1:55am

I went from negative net worth at 23 to about your target.  i did it in commercial real estate as a broker, lived on about $150-200K tops per year and piled everything else into real estate, crypto, index funds. never had a w2 paycheck in my life. i am an introvert.   it's not that hard.

Nov 16, 2021 - 10:46am

Easiest path imo would be to start BB IB -> MF PE -> MM PE -> Start your own independent sponsor w/ 8-10 years experience and elephant hunt for proprietary deals. Capital is easy to raise if you have a decent LOI. 

Nov 16, 2021 - 1:10pm

I have a pretty good idea how hard it is, but $20mm by age 40 is by definition going to be extremely hard. I am under no illusion that I could do it myself, but I also know that I am not going to have $20mm by that age.

Nov 16, 2021 - 1:52pm

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