Before I continue, let us not focus on the amount but the process. Why? Because the value of $1 is different for different people. Some people is earning $6,000 per month, some $100,000, some $3,000. Some people are not working because family is rich. Some assets are worth $1 million because age 50 and had accumulated many years, but some young people's assets only worth $50,000.
The reasons were:
As he could see the positive result, his confidence has grown and he has been investing consistently. He didn't take very high risk, but invested gradually into diversified stocks with his retirement money. He was able to achieve average of more than 20% return per year for the past few years, outperformed the local stock exchange index yearly. Based on his rough estimation, his has made $96,000 from Sep 2009 to May 2013 (3 years and 8 months). Plus the $4,000 that he has made, total is $100,000.
Besides congratulate him, I would also want to follow the way how he invest. If I have less money than him, I will make less than him. If I have more money than him, will make more than him. But all of us will be having a good % return. Be realistic, more important is the % that we make every year, how much we make is how much money we have.
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How I made my First $100,000 from Stock Market. The journey share by someone and I post it here.
He started investing more than 10 years ago but not much profit, because not much savings and wrong stock selection. Profit less than $1,000 from Sep 2000 to Sep 2006 (6 years).
Currently he is a middle working class salary person, where there are few superior higher ranking than him in his department. Doesn't really earn much, but able to save some money. As he continue to have more savings (money) and have better stock selection, he invested more, profit has increased, but still not much. He made a total of $4,000 only from Sep 2006 to Sep 2009 (3 years). He started investing more than 10 years ago but not much profit, because not much savings and wrong stock selection. Profit less than $1,000 from Sep 2000 to Sep 2006 (6 years).
The reasons were:
i) stock selection has improved but still not good enough;
ii) good stock sold too early; Normally sold if made 10% to 20% and switched stock
iii) dare not buy stock if already moved up.
iv) not much confidence to invest more because results were not so good
The "Turning Point" was at a dinner in Shangri La hotel. Four of them. A remisier/ dealer, a banker, an investor, and himself. At that time, he dare not enter the market because prices have already gone up. He has also missed out on many stocks because the stocks didn't reach his buying price target. The banker shared with him about Dollar Cost Averaging. He took the advice/ challenge.
Since then, he started using Dollar Cost Averaging and started to see some good result. As he was thinking how to have better stock selection, he realized his stock selection was not good enough, because he concentrated too much on PE ratio. Then he started to change his strategy:
i)Continue with Dollar Cost Averaging
ii)Buying into low PE ratio stock, but also with high growth, low gearing and high dividend yieldiv) not much confidence to invest more because results were not so good
The "Turning Point" was at a dinner in Shangri La hotel. Four of them. A remisier/ dealer, a banker, an investor, and himself. At that time, he dare not enter the market because prices have already gone up. He has also missed out on many stocks because the stocks didn't reach his buying price target. The banker shared with him about Dollar Cost Averaging. He took the advice/ challenge.
Since then, he started using Dollar Cost Averaging and started to see some good result. As he was thinking how to have better stock selection, he realized his stock selection was not good enough, because he concentrated too much on PE ratio. Then he started to change his strategy:
i)Continue with Dollar Cost Averaging
iii)Refuse to sell the stock even the price has gone up if the stock still offer good value
iv)Will buy the stock even if the price has gone up, as long as the value is still good.
Profit has improved although at that time many people complained that the market sentiment was not good. However, his family wanted to buy a property and he has to sell all his shares. But he was able to keep investing, by using the retirement money that his company has allocated to him, although not much due to some policies/ restrictions.iv)Will buy the stock even if the price has gone up, as long as the value is still good.
As he could see the positive result, his confidence has grown and he has been investing consistently. He didn't take very high risk, but invested gradually into diversified stocks with his retirement money. He was able to achieve average of more than 20% return per year for the past few years, outperformed the local stock exchange index yearly. Based on his rough estimation, his has made $96,000 from Sep 2009 to May 2013 (3 years and 8 months). Plus the $4,000 that he has made, total is $100,000.
If he didn't change his strategy, he has estimated that the most he could had made is about $20,000 or the most $25,000.
If he didn't change to a better strategy, things will not happen. He was glad that he has made the right decision to change the strategy.
Anyway, now he can't use his profit yet because the money is in the retirement fund provided by the company.
My comment is, for some people $100,000 is not a lot of money. But is a lot for others. He doesn't have much money to invest because he has bought a property and is not having a very high salary. Congratulation to him.Besides congratulate him, I would also want to follow the way how he invest. If I have less money than him, I will make less than him. If I have more money than him, will make more than him. But all of us will be having a good % return. Be realistic, more important is the % that we make every year, how much we make is how much money we have.
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