Thursday, August 13, 2009

A Millionaire at Age 26

I heard a story from a friend who told me that one of his friends is already a millionaire at the young age of 26. How did he do it?

Basically, I was told that he invested close to $200,000 into a single Hong Kong penny stock and that stock rose by more than 10 times. That was it, just pure guts....and now he is a millionaire!

According to my friend, he is still working his full time job and is basically enjoying life right now as he does not need to worry about money for retirement and stuff already.

So I guess you can say that this guy has already found his financial freedom.

8 comments:

  1. u know this type of thing is like my friend's friend did this and that.
    easy come easy go...most pro he will die penniless

    ReplyDelete
  2. Hi FF,

    I would caution against believing such tales too easily, unless the information can be empirically and objectively verified, otherwise it might be another urban legend !

    If you ask me, investing SGD 200,000 (or about HK$1 million!) into one penny stock is one very good way of committing financial suicide, unless you have some insider information or specialized knowledge that no one else seems to have. In this case, I don't think it's pure guts, I think it's pure foolishness.

    One can always take such risks and end up very rich......or destitute. Of course, people will only remember the case that got very rich (akin to gambling at casino, where 1 strikes the jackpot while 100 others go home broke), but what of the others who plonked in their life savings or borrowed only to go bankrupt?

    Just some words of warning....it's better for us to invest prudently and to build wealth consistently over time than to make highly risky bets like what you described in your post.

    Cheers,
    Musicwhiz

    ReplyDelete
  3. Ha..yep..thanks for the comments =)

    All the comments that you all have given are exactly what I replied to my friend.

    For every 1 success case that we hear about, there are probably another 999 others who became totally bankrupt and poor. The probability of success is very low in this kind of scenario. One is better off sticking to diversification, dollar cost averaging and stuff where the prob of success is perhaps higher though the timeframe we are looking at might be much longer.


    The thing is that this guy did it and we must applaud his guts/foolishness because at the end of the day, he is afterall a millionaire. Of course, it will be difficult to emulate what he has done.

    But I can assure you that this is not just another urban legend or tall tale. It really is true. The guy however is "smart" in the sense that he has not started splurging his money and he is still going to work, treating his work now as a passive income source (sad to say).

    ReplyDelete
  4. There that Music Wizzard go again.. rumbling on about his copycat buffett speak.

    The reason why the guy got rich is because he acted on his instincts and probably the penny stock you mentioned might be a stock he had studied and understand intensely.

    I thought mr wizzard would agree diversification is for the ignorant and mr wizzard have a lot of penny stocks too. So you mean Mr Wizzard is smart , so he can pick penny stocks. But Your friend is a dumbo and the penny stock he picked must be speculative?.

    ReplyDelete
  5. Hi FF,

    Interesting, thanks for clarifying. I personally think it's hard to emulate what he did, as he may have had some knowledge that others do not, and that is within his circle of competence. Whatever the case, it is good that he got away with a million$ but I would caution that such cases are typically one in a million, as I know of friends (many) who are still slogging at their jobs and trying their "luck" in the stock market.

    And he is probably getting a job out of sheer boredom of having nothing to do at home, and that is applicable too for older people nearing retirement age (they go to work to fill up their time, not their pockets!).

    Cheers,
    Musicwhiz

    ReplyDelete
  6. Well, he must control his expenses, if not even a zillionaire is poor.

    Visit my blog too. http://www.beginningwithf.blogspot.com
    it's a blog on personal finance.
    Care to exchange links?

    ReplyDelete
  7. Yep.. He is controlling his expenditure from the latest update. He did not quit his job and "retire".

    I have done the link exchange with you already btw =)

    ReplyDelete
  8. Most of us are cowards at making risks,so for the love of god or whatever,don't keep saying 999 or 99.9% of the people will fail. Its a lot closer to 80% or 90% at most than 99.9%. I assure you 90% of the people are not risk takers or even remotely follow there own road.Even if by chance they do, most of them actually quit halfway or at the first sign of tribulation beyond there CURRENT ability for good or ill reason. So very few people would even DARE to make such a gamble,remember this is not a throwing money to luck (easy work and lots of benefit). Stop underestimating your fellow humans with these so called high numbers on overestimating people desire to be reckless. I assure you most people who're like what you say will never reach the point of gambling that much money,unless its pittance for them.

    ReplyDelete

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