It's also survivor bias— having a million bucks gives you the cushion to take those riskier bets, and the people for whom that works out are the ones we read about. There are certainly others who gambled away mom and dad's money into nothing.
One cannot transform 1 million into 100 millions without having 1 million in the first case (unless some debt leverage is used, but that is besides the point here). Right.
However, I fail to see how that removes any value (or makes the task look easy) regarding Mc Donald's perspective. For that one guy who transformed 1 million into 100 millions, how many actually lost most of their initial million (in stock trading)? I am like most of us here: I imagine that if I had a million somehow, then I could easily become a billionaire thanks to my wonderful intelligence and wits, because I am better than every other millionaire out there, right? That is all wishful thinking though, and I dread confronting reality to my ego.
In reality, if I had a million, I guess I would invest it into the most risk-free assets rather than bet it all in stock trading.
If you had a million you could also get a loan with interest less than "risk free" assets. E.g. The stock market makes 7-10% but you can get a loan for 1-3%. So 1.5x your returns then become 12-16%.
Perhaps you can invest in lower risk dividend stocks which will pay out your interest + a little and 3x. If we assume those stocks only make 4% but also pay out 3% then you are looking at 16% returns. Moreover when those dividends get raised you are doing even better.
The article points out 2,000x returns where possible if he started at 18 using the equivalent of index fund investing. So, he could have underperformed the market and turned 1 million into 2 billion let alone 100m. The critical issue was not spending his inheritance rather than needing to have amazing returns over that timeframe.
> It's a lot easier to get a hundred million dollars when you start out with 1 million to put in the stock market.
This statement could only ever be uttered by someone that has not tried to do this.
100x increase in any endeavor is extremely exceptional. It's as hard to do as turning $10,000 into $1,000,000.
The only thing having a larger starting amount helps with is that it opens up types of opportunities you did not have before that require greater starting capital and are outside the stock market. Those additional opportunities are as hard to capitalize on as the smaller opportunities that only require $10,000, especially since you need not only money but a lot of people with expertise that you can trust.
But within the stock market, a 100x return is something very few people in the market ever achieve.
The only place where having money clears some significant initial hurdles is probably getting to the first $10,000, maybe the first $100,000. This is a hurdle many have cleared in their lifetime and they still haven't succeeded in turning it into $1 million to $10 million, respectively.
You said it was provably not as hard and didn't try to prove the point you're making. I agree you can take more risk, but there's no guarantee that you're taking better risk and nothing about what you claimed proves that.
It's almost certainly more challenging to take better risks as the investment requires gets larger. All sorts of new challenges crop up that didn't exist with smaller investments. It's the reason why companies have a harder and harder time sustaining the same growth rate as they get larger.
Within the stock market alone, you get access to the same exact risks as the people with the $10k YOLO accounts. If you look at WSB, you'll see a lot more posts about people posting losses on their YOLO accounts than posting massive wins. There are a lot of sharks swimming in the capital markets with deep expertise.
> if I have a bunch of money, I can pay for expertise/management that is going to net me a higher return
Not starting with $1 million. At $10 million you have to be the shark. You need to be closer to $100 million to be able to afford the sharks the don't have their own principal to work with. Even then, you still need to know how to hire the sharks.
