There is no single path to building wealth. You can get rich a number of different ways (Entrepreneurship, real estate ownership, buying crypto, high workplace compensation, alternative investments, etc.). While there are many different avenues to building wealth, I believe that stock investing is the easiest way to build wealth for the average person. Stock investing is not a get rich quick scheme but a long-term wealth building approach that does not require large amounts of capital or extensive financial expertise. You can become a millionaire through dollar cost averaging, systematic investing, and possessing a patient mentality.
Let’s be clear. Entrepreneurship is the greatest driver of wealth. The nine wealthiest individuals in the world have made a fortune through entrepreneurship and owning stock in their publicly traded companies. A lot of their wealth was multiplied by the appreciation of stock shares.
#1 Elon Musk $219 billion dollars – (Tesla)
#2 Jeff Bezos $171 billion dollars – (Amazon)
#3 Bernard Arnault $158 billion dollars – (Louis Vuitton Moet Hennessy)
#4 Bill Gates $129 billion dollars (Microsoft)
#5 Warren Buffett $118 billion dollars (Berkshire Hathaway)
#6 Larry Page $111 billion dollars (Google)
#7 Sergey Brin $107 billion dollars (Google)
#8 Larry Ellison $106 billion dollars (Oracle)
#9 Steve Ballmer $91.4 billion dollars (Microsoft)
While entrepreneurship is great way to get rich; it also requires lots of time, energy, and effort. Let’s be honest. Not everyone is cut out to be an entrepreneur.
Stock investing is an easier route to take than entrepreneurship. You need a small amount of capital to get started. Stock investing allows you to increase your net worth without being actively involved in the business activities that are making you money. Investing in stock for the long-term allows you to benefit from compounding through capital appreciation and generate a passive income stream.
Investing has advantages over other endeavors such as starting a business. Investing requires you to expend less time, energy, effort and less of an initial investment. The advantage of buying stock is that you can start with a small amount and continue to add to your portfolio day after day. There are also no barriers to entry when investing. The elimination of brokerage fees means there is no cost associated with investing. Real estate investing can also be a profitable endeavor but it is much more capital intensive than stock investing. You need a lot more money to become an investor in real estate. You can buy stock daily with just five or ten dollars.
Yes, you can become a millionaire from investing in stocks. What I love about stock investing is that over time it is possible for anyone with a decent income to become a millionaire. You don’t have to make six figures to become a millionaire from investing. You just need to consistently invest in good companies and allow time to let your portfolio grow to build wealth. This is known as capital appreciation. All it takes is one individual stock to skyrocket and multiply your money.
I have had companies like Google, Shopify, and Costco generate returns of 15x and 20x on my capital. I have had blue chip stocks in slow growth industries with little risk double and triple my money over a decade. Reinvested dividends have also helped to amplify my returns.
Individual stocks are riskier than mutual funds and exchange traded funds but they also offer greater potential return on investment. There are countless stories of individuals who have become millionaires by investing in stock. Becoming a millionaire after hitting the $100,000 investment level is not that difficult.
Over a million new millionaires were made in 2021 from investing in the stock and crypto markets.
The combination of work along with stock investing has proven to be the best combination for generating life changing wealth.