Ask HN: How to become a millionaire in 3 years?
As everyone else on the planet I'm sure, I would like to become a millionaire and within a tight time constraint: 3 short years. HN is a constant source of excellent articles, amazing intelligent advice and smart people, so how would you go about it? Saving, Stocks etc etc?
And also, please don't ask as to why I want to have a net worth of $1M and why I wouldn't just want to get 200k and live comfortably etc. I'm just interested in hearing people's thoughts about this idea :)
Thanks
146 comments
[ 3.2 ms ] story [ 169 ms ] threadBut why not 3 years?
As we all know, let's say if we are given an assignment for college to do and we are given a week to complete it, almost always, I will start the assignment about 3/4 days into the week and then as the deadline looms closer, the real work happens! So in answer to your question, if I said 10 years, I would be focused on 10 years :)
http://en.wikipedia.org/wiki/Parkinson%27s_Law
1) There's not such a huge variation in the time necessary to complete an assignment. Your professor knows that some people can finish it in a couple of days but others need a whole week. But it's much harder to estimate the time to get $1M.
2) You can finish a school assignment on your own. Assuming you have access to the necessary resources (books, net, etc) it depends only on you. You don't need any luck to finish it. But to get rich you need favorable market conditions, meeting the right investors, hiring the right people, the government not screwing you up, etc, i.e. "luck".
Regardless, one year is unrealistically too short. Twenty years is depressing. So pick something in between.
- Market opportunity- a million dollars isn't a lot in the grand scheme of things, but it certainly is a lot if the market opportunity is not large enough. Even if you put Bill Gates and Steve Jobs as founders in a new venture with a total market size of 10 million, there is no way they could become too wealthy without completely changing the business (ie- failing).
- Inequality of information- find a place where you know something that many undervalue. Having this inequality of information can give you, your first piece of leverage.
- Leverage skills you know- You can go into new fields such as say Finance, but make sure you're leveraging something you already know such as technology and/or product. Someone wanted to start a documentary with me. I said that would be fun, but it would be my first documentary regardless of what happened. There was a glass ceiling due to that. If I do something leveraging a skill I know, I'm already ahead of the game.
- Look in obscure places- We're often fascinated with the shiny things in the internet industry. Many overlook the obscure and unsexy. Don't make that mistake. If your goal has primarily monetary motivations, look at the unsexy.
- Surround yourself with smart people- smart people whom are successful usually got there by doing the same and have an innate desire to help those do the same. it's the ecosystem that's currently happening with the paypal mafia and can be traced all the way back to fairchild semiconductor.
- Charge for something- Building a consumer property dependent upon advertising has easily made many millionaires, but it isn't the surest path. It takes a lot of time and scale, which due to cashflow issues will require large outside investment probably before you are a millionaire. Build something that you can charge for.
- Your metric shouldn't be dollars- If you're going after a big enough market and charging a reasonable amount, you can hit a million dollars. Focus on growth, customer acquisition costs, lifetime value of the customer, and churn.
- Get as many distribution channels as possible- There is some weird sense that if you build something they will just come. That a few like buttons and emails to editor@techcrunch.com will make your traffic explode + grow consistently. It fucking won't. Get as many distribution channels as possible. Each one by itself may not be large, but if you have many it starts to add up. It also diversifies your risk. If you're a 100% SEO play, you're playing a dangerous dangerous game. You're fully dependent upon someone else's rules. If Google bans you, you will be done. Replace SEO with: App store, facebook, etc.
- Go with your gut and do not care about fameballing- Go with what your gut says, regardless of how it might look to the rest of the world. Too often we (I) get lost in caring about what people think. It usually leads to a wrong decision. Don't worry about becoming internet famous or appearing on teh maj0r blogz. Fame is fleeting in the traditional sense. Become famous with your customers. They're the ones that truly matter. What they think matters and they will ultimately put their money where their mouth is.
- Be an unrelenting machine- Brick walls are there to show you how bad you want something. Commit to your goals and do not waver from them a one bit regardless of what else is there. I took this approach to losing weight and fitness. I have not missed a single 5k run in over a year. It did not matter if I had not slept for two days, traveling across the country, or whatever else. If your goals is to become a millionaire, you need to be an unrelenting machine that does not let emotions make you give up / stop. You either get it done with 100% commitment or you don't. Be a machine.
- If it's a "trend", it's too late- This means the barriers to entry are usually too high at this point to have the greatest possible chance of success. Sure you c...
- Inequality of information
- Look in obscure places
- Get as many distribution channels as possible
- Be an unrelenting machine <-- Love it! So true and congrats on the weightloss. You have added so much to my motivation you don't know!
For extra effect do this in rapidly growing and/or rapidly changing markets. You may stumble upon an opportunity much larger than one likely to be left open in a mature and stable market. Doing this also give you a lot of the advantages mentioned in the post.
Drawing energy from people and specially your customers is a much underestimated ingredient for success.
After a couple of years of being a machine, you need an oil change and you need to replace the wear and tear components.
I found taking one week a day and cold-visiting our customers brings back the much needed spark that makes you feel like taking over the fucking world!
-Nash
- I actually love anything that deals with customer support. It gives me a lot of insight and makes me feel rewarded.
- Yup, I fully fully agree. Machines can break. When I talk in terms of being a machine, I talk in terms of reliability, not over-working yourself. It's good to be reliable+ consistent. Avoiding burnout is certainly key.
If it's a "trend", it's too late
I disagree. In fact, if something is a trend, it's a guarantee that a market (of some kind) exists and it can save you a lot of time and research. Most big markets have large numbers of high value competitors and they're not all pioneers. Indeed, most companies with significant turnover were not pioneers in their field - they came in with "me too" products that merely improved upon the existing popular ones before they became too entrenched.
The trick is to get in when something becomes a trend but before the masses realize it's a trend and you have hundreds of competitors making similar improvements to the core products and services as quickly as you are. As well as being my belief, it's one of the core tenets of Michael Masterson's tackily-named (but a great read nonetheless) "Ready, Fire, Aim: Zero to $100 Million in No Time Flat."
With your reference to the App Store, I suspect you might agree with this, but have a different idea of what a "trend" is. I consider the App Store and developing iPhone apps to have been a trend in late 2008, not long after the earliest developers were starting to share revenue/sales figures, but before the masses had figured out it was going to be a giant cashcow. Now developing iPhone apps is just "what you do" rather than a trend, IMHO.
The good thing is what you said: market exists. There's money there, just make sure it isn't all taken up already.
I've been trying to get far more disciplined in looking for the more practical, boring problem/solutions that follow market trends etc.
I just find it so hard to do because it doesn't excite me as much, even though I know there is so much opportunity out there.
It may seem boring at first, but let the chase of winning excite you, along with the money. Odds are you get bored because you're not interacting with customers and/or making money from it. I've fallen into this trap before. Seeing money come into your bank account or have customers contact you will get you insanely pumped. It's not about the money in a greed sense, but in the "i've done something people find valuable sense".
I'm pretty deep in the Ruby world. A trend that has emerged (and is almost becoming a cliché) over the past 18 months or so is selling Ruby related screencasts. Peepcode started selling screencasts about 3 years ago but no-one followed on in a serious fashion for quite a while (until Peepcode "proved" it could work, I say).
Now, there are at least 7 - 8 unique vendors of Ruby related screencasts I can think of. None are Peepcode scale at all, but I've seen sales figures and know that some of them, at least, have done reasonably well. Even the people behind the more humble attempts are happy, see: http://codeulate.com/2010/03/how-to-sell-a-hundred-screencas...
Now, "Ruby screencasts" is a crazily tiny niche. Not only is "programming" a tiny niche in the world of business, "Ruby programming" is a MINISCULE niche in the world of programming.. and Ruby programming screencasts is ULTRA CRAZY MOLECULAR LEVEL TINY!
If people have picked up on a trend in such a miniscule market and are making money with it, that's says, to me, that there are millions of teeny tiny niches in which you can start to perform very simple "tests" that make money and which, ultimately, could lead you to that million dollar concept or market.
Picking up on these teeny, tiny "trends" can be tricky, but is a lot easier in fields you're already absorbed in. If I had to pick out some trends just from reading Hacker News recently, these seem like a few areas someone could make some bucks in now/soonish: node.js consultancy/screencasts/books, Posterous theming, Flash-to-HTML5 tools/consultancy/screencasts/books, non-college oriented compsci education.
I first got my starts by trying to blog about video games. Then I started a wiki which I bootstrapped off my own saving. Now it produce maybe 20-30 bucks each year. Not a whole lot, but I bootstrap my way with that money in addition to programming work that I started working.
I am hoping to go back in automating the maintenance of my wiki and create new sites in that niche to generate a bigger income, which then will be used to bootstrap other sites.
The way I figure it is that for each domain, I only need to make about 15 bucks to be profitable. Basically, they serve as buffer money used to fund new mini-ventures.
The market very often has been there quite a while with major players in it that are concentrating on monetizing their current offerings while being completely blind to the fact that new possibilities are now available. This tends to happen to startups that have "matured", generally replaced all their leadership and now have very little internal vision.
If you can spot one of these opportunities it can be a true goldmine.
They take over oil fields after the big oil giants want to abandon the well and usually manage to squeeze more out of the well in a more efficient and environmentally-friendly manner. Their profits are generated primarily in Africa, and they also work better with local officials than the big players do.
http://www.businessweek.com/magazine/content/05_13/b3926075_...
Maybe BP should contact them and hand over the Gulf mess to them :)
Kayak Reddit Huffington Post Bit.ly Hulu Vimeo Google (!) Facebook (!!)
Choosing the right macro is easier then spending 3 years on the wrong macro, especially building up an organization depending on the next round of VC, which I did, realized and tried changing industry (from it-startups to commodity trading, yes I'm in China and happened to meet alot of powerful people while fund-raising asking me for iron ore, crude, just because I look like a foreigner, etc.). It got me off my field for a year, very educational though, did not need to raise more VC for my company and sitting on these buyer requests gave me reasons to climb higher in my social network and I ended up in Libya with the sons of the leader doing one deal, made about that amount.
However now I'm back working on what I'm good at, what I can control, tech-startups, I've had the time and money possibility to take as much time off and do what I want, I decided to study and become very good at php/mysql. Commodity trading depends too much on other people (closing is like winning the lottery).
So I guess, you also have to be lucky!
If you think you can focus or be actively conscious of all these things at once, you 1)have a weird definition of focus, 2)are probably fvcked.
Can I ask, which points are borne out of personal experience, and which points are advice from others? i would love to read some of your sources of information. Even if I have read them already, it would be good to re-read em :)
2) Do something ridiculous that will get you in the news. Leave your dignity at the door.
3) Get a publicist and milk your infamy for a couple of months.
Estimated time to completion: 4 months.
1. Learn to come up with your own ideas.
2. ...
3. Profit!
http://blog.stackoverflow.com/wp-content/uploads/then-a-mira...
I'm not positive on this, but I think my comment's parent was actually referencing it.
http://en.wikipedia.org/wiki/Gnomes_(South_Park)
(Of course, you already ruined my entrance:
"How do you make a small fortune in the stock market?"
"Start with a large one." )
If you want to be a millionaire, here's the procedure:
1. Pick an activity that you think will make you a millionaire within a reasonable time frame.
2. Engage in that activity for that time frame.
3. Are you a millionaire? If so, you're done. If not, figure out what you did wrong in step 1 based on the information you acquired while engaged in that activity. (Often this turns out to be some kind of mistaken assumption about market dynamics, sometimes about your abilities.)
4. Iterate.
This procedure is not guaranteed to terminate. But it does tend to converge.
I disagree with the following though: "Imposing a deadline on a result that is largely beyond your control will serve no constructive purpose".
True - that the goal is way beyond my control, but I think it forces me to take action and make it happen.
I found it's much better to establish firm hypotheses when I begin a project, and then as I plan out the project, make sure that the hypotheses will either be validated or falsified along the way. If the premises under which I began the project have been proven false, then it's time to quit and do something else. But if all the premises hold yet it just takes twice as long to do everything as expected (which is fairly typical), it's worth sticking with it until the end.
The deadline should give you a change to step back and properly evaluate your situation at a specified time, hopefully with some external help.
Becoming millionaire must be a way to find a secret force that only you can use. Don't be rational.
* make a $1 priced thing that 1 million people want
-or-
* make a $1 million priced thing that 1 person wants
make a $1 million of profit selling a thing that 1 person wants
1) develop a skill, ie code a lot
2) try out a bunch of ideas quickly and find one that can make you rich. ideally, you want to find out if an idea will or will not work asap, ie 1 to 4 weeks. expect this to take many trials, like 10+. it doesn't matter when one don't work, you'd gained experience. the key is to find out quickly and not waste your whole 3 years on it.
3) when you find that one that works, juice it like no other.
4) get rich or [keep] trying
I've always been wildly successful at my goal - which was to be happy.
Happy is good. Wealth + happy is even better. :)
http://www.ted.com/talks/dan_gilbert_asks_why_are_we_happy.h...
I am not a millionaire yet. I would like my annual income to exceed $1M. I don't care much about net worth.
Once you determine how much income you want to make, you can then decide how you are going to do it. Best way is a startup in a sizable market. Just my thoughts.
http://www.marshallbrain.com/million.htm
I'm pretty sure this is also a reference to Ender's Game.
This:
1) Will take longer than 3 years to make 1 million.
2) Is probably not this man's expertise
Build a solid product using .NET or Java. Charge massive consulting fees and hire some slick salesmen.
I know several people who got rich doing this, but they were straight up businessmen, and thrived on solving boring, yet lucrative problems.
Then go to Vegas and put everything on red twice. (Metaphorically speaking -- I don't know if they'd allow a $500k bet in Vegas. But in the wonderful world of contemporary financial markets, there are instruments to make any kind of bet one might desire, and probably the house's cut will be even lower than in roulette.)
The obvious downside of this strategy is that it only works with the probability slightly less than 25%, otherwise you end up broke. But quite frankly, I doubt other ideas presented in this thread (make something people want, get on a TV show etc.) have better success rates. If there was a sure-fire way of getting from $0 to $1M in three years everyone would be doing it.
If you're OK not only with ending up broke in case of a failure, but even being in debt, then you can increase you odds of success even further by using leverage.
Not only does it make sense, but it allows you to see exactly what your odds of success are. Everyone acknowledges that both the "get famous" and the "do a startup" method have an element of luck, but this method allows you to quantify it.
Also, if you did it there a non-zero chance that you could get famous and become rich though your fame (even if the Vegas bets failed).
To defend myself (feebly) I can say that you can max out the after-tax 401(k) to the $49k a year limit, then fund a traditional IRA with $5k per year, then roll it over to Roth IRA after quitting your job (or even right away, if your employer's 401(k) plan supports it). That way $162k out of $250k will be tax-sheltered. (Of course, you can't take the money in Roth IRA to Vegas, but as I said with carefully tuned investments you can have the same risk-reward line-up). So you will only own taxes on $264k so the taxes will be in the neighborhood of $100k. So I guess you have to save a bit more than $250k or accept a bit worse odds.
One problem with money in Roth IRA, of course, is that you cannot take the earnings out without paying the tax and penalty, until you're 65. But if you plan to use your $1M to live modestly off of it (as opposed to buying a tropical island), then you can get around this by starting a SEPP program.
I've seen many people write that, but I doubt it.
There's a sure-fire way to be healthier, look better, likely live longer, and have more energy overall. And yet the amount of people who don't exercise is huge. I doubt it's because they don't believe in the benefits or don't want the benefits of exercise, it's just that exercising is hard.
The same with making a million dollars.
* To calculate this, chance of success after 4 tries = (1 - chance of failing 4 times in a row) = 1 - 0.75^4 = .68