In 2019, after 27 long years on earth (my story), I finally found something that I didn’t have to do, but want to do – value investing. I finally had a hobby.
But like any skill worth mastering, investing demands long-term learning and discipline. To stay consistent, I decided to sign up for a bold but achievable challenge in 2020:
“100x my portfolio in 33 years”
The original plan was to play this game without audience. But overtime, I realized that by making my journey public, not only will I receive some honest feedback, but the resulting social pressure will also help me stay consistent, and committed.
On that note, welcome to my first post about my mission to grow my portfolio 100 times in 33 years. Thank you for being part of my journey.
In this post, I plan to layout the WHATs, and WHYs related to this challenge. (And the next post will have the most important thing – How am I going to make 100x – read along)
WHATs
What is the challenge exactly?
The challenge is to grow my portfolio 100 times by 2052 by compounding returns from investing.
What do I need to do to the reach the finish line?
To grow the portfolio size by 100 times, I need to make 15% annualized returns for 33 years. In an ideal world, I would have to make 15% year-in year-out. But as we know, returns in the market, don’t go in a straight line. Therefore, while the returns of any given year can fluctuate, to make 100x within 33 years, my returns need to be at least 15% annualized (I won’t complain if its higher).
What are the rules of this game? Any restrictions?
– No Debt. I plan to reach 100x without any capital debt or direct leverage at the portfolio level to amplify my returns.
– No regional or sector filters. I can invest in any country, and in any sector.
– No restrictions on type of instruments. I can invest in stocks, bonds, convertible instruments, etc. Although, I like to keep it simple, and not invest in complicated instruments that I don’t understand.
– No gambling. These investments need to have intrinsic value backed by cash flow generation.
WHYs
Why 100x? Why not 20x, 93x or 10000x?
This is an important question with a bit of a silly answer. The “100x” in itself is just an arbitrary number. However the intent here is to have the goal big enough to keep me motivated, long enough to give me time to improve, and not too big like 10000x that reduces the probability of meeting the goal. So it could surely be 93x instead of 100x, but 100x sounds better, isn’t it?
Why 33 years?
I started this challenge in May 2020, at 28 years of age. 33 years would bring me to 61, last year before I retire. I thought it would be good to cross the finish line before I retire from my day job.
Why 15% annualized returns?
To make 100x in 33 years needs 6 doubles, and then some – 2x, 4x, 8x, 16x, 32x, 64x, and then 56% more.
As per the rule of 72, at 15% rate of return, portfolio doubles every 5 years. So in 33 years, and I can do 6 double, and then some – exactly what’s needed.
However, all this math works under ideal situation where I make 15% every year. In reality, few years will be lower and few years will yield higher returns, and I hope that it normalizes to at least 15% a year.
Also, by no means this 15% would be easy. It implies beating the S&P500 long term index return. Therefore quite challenging, but at the same time possible, and probable.
But there is no glory in playing an easy game for 33 years.
SOMETHING MORE IMPORTANT THAN “WHATs” AND “WHYs”
While “WHAT” defines the goal, and “WHY” gives us the reason behind it, together it just expands on the aspirations but says nothing about the steps one needs to achieve the goal. Therefore, the most important this is “HOW“. “HOW” gives us the business plan.
Therefore, I consider my next post “HOW” the holy grail of this challenge, and most important thing in the series of posts to come over the years related to my “100x challenge”.
Thank you for reading through my post. As I mentioned in the “About” section of this website, I plan to document everything along the way – learnings, mistakes, concepts, case studies, much more. I hope it adds value to your journey.
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