Fri 29 Jun 2007
Do You Know ANYONE Who’s Gotten Rich With Mutual Funds?
Posted by RichSlick under Money Management
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I’ve had lunch with a few millionaires this week and I’m beginning to wonder if ANYONE out there is actually getting rich via the mutual fund route? It seems to be that if you want to make real money (tens of millions and up), you really need to have a great business idea. I have yet to meet anyone with significant wealth that got there by investing in mutual funds.
I’ve written about this before, the millionaires I know got there by either owning businesses, exercising stock options, or dumb luck (Vegas). I’ve yet to meet anyone who got rich with mutual funds. Yes, I know you can save $1000/year with 10% return for 40 years and get into the millions but with inflation, these millions won’t be worth what most people think they’ll be worth.
Oh well, if anyone knows of any mutual funds millionaires, please let me know. Oh, I do know a people get rich with mutual funds, the guys selling them (Vanguard, Fidelity) rake in hundreds of millions, I’m talking about individual investors.
In the meantime, you can check out http://www.etfcoveredcalls.com to see what my alternative to Mutual Funds is all about.
June 29th, 2007 at 5:51 pm
I’ve read about many people making tens of millions in the lottery. So should everyone investing in mutual funds cash them out in favor of lottery tickets?
My future son or daughter could be the first to make millions on mutual funds. I could use my ability to gift 10,000 to him a year (I think) and invest that on his/her birth. At 8% returns (on the high side, but also less than the 9% the Vanguard S&P 500 has returned AFTER inflation over the last 30 years), that first year’s gift will be worth nearly 1.5M (in future dollars) on his/her 65th birthday. The second years gift will be worth 1.3M (also in future dollars). I don’t need into too many years for the average person to consider him “rich.” Actually I think that nearly three million would be enough.
Of course it requires an almost perfect set of circumstances. Finding a good business idea and successfully implementing it is no easier though.
June 29th, 2007 at 10:34 pm
By any chance, did any of those millionaires get there with real estate?
I can’t help but ask. I have a one-track mind!
July 3rd, 2007 at 5:13 pm
Your post is confusing. Nobody “gets rich with mutual funds”. One path to getting rich is by working hard and saving. That savings is probably better off in a mutual fund than under your mattress, or invested in pork belly futures.
My wife and I work hard and save. In our early 30s we are worth about $1.5M, with investable assets of about $1M. That money is in mutual funds and is doing quite well, thank you.
The other methods you mention may be the quickest route to “super rich”, but they’re also a common route to “not at all rich”.
July 4th, 2007 at 10:54 am
So what is the answer for the average college student who doesn’t want to start a business and will have bad luck his entire life getting ‘great tips from friends’ in the stock market? ETF covered calls?
My generation doesn’t save squat regardless of what investment vehicle it is…
Did Robert K. take over as a celebrity blogger here for the day?
July 4th, 2007 at 2:11 pm
We all have different definitions of “rich” and a million dollars or 3 million dollars isn’t the kind of rich I’m looking for. You may be perfectly happy with 1 or 3 million and that’s fine. Some of us want more than that.
July 12th, 2007 at 10:59 am
If you haven’t done so already read The Millionaire Next Door. It provides very informative statistics on the true wealthy people. The average wealthy person owns their own business, spends less than they make, and invests in things they understand.