How to turn $200 into 200 billion without lifting a finger

[TecHNooB]

I nominate this thread for self-ownage of the year! It's a worthy candidate anyhow.

Like everyone has said, it's yearly not monthly. Second, you're not guaranteed anything with a mutual fund but it is safer than investing in stocks. Third, depending on inflation, your buying power may not increase at all.

 

[DisgruntledVirus]

I remember when I did that.... back in middle school...

Then I realized how bad that math is.

Although I never said a 10% return on $200 is $240....

 

[oddyager]

Yeah go ahead with that plan. I also have a bridge to sell you.

 

[rsd]

<Homer J Simpson>Your ideas are intriguing to me and I wish to subscribe to your newsletter.</Homer J Simpson>

 

[trmiv]

Mr. eflat, what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent post were you even close to anything that could be considered a rational thought. Everyone in this thread is now dumber for having read it. I award you no points, and may God have mercy on your soul.

 

[Josh]

You suck

 

[her209]

1. Put $200 in mutual fund earning 10% monthly
2. ...
3. Profit!

 

[Special K]

marked for ownage of the year 2008 thread

 

[tfinch2]

Idiot.

 

[2Xtreme21]

Originally posted by: ELopes580
OP, I'd hate to ask how you plan on losing your virginity when you are 47.

Lots of hookers and blow with that $9 billion he's gonna have from the investments he made.

 

[TXHokie]

My buddy in Nigeria has a sweet deal for ya - please check your email.

 

[vi edit]

Don't quit your day job. Unless of course your day job is a financial advisor...in which case you should promptly take your license or degree and burn it in the nearest trash bin.

 

[nanette1985]

Another interesting point in your post is the original $200. You don't actually have that $200 - you just opted not to spend it on something. Why not start out with, say, $200,000 that you saved by not buying a Ferrari?

 

[dullard]

Everyone has pointed out the issue with the monthly vs. yearly and the 20% calculation instead of 10%. But there is one more problem.

The stock market will most likely NOT grow at 11% per year in the next few decades. Lets look at your cherry picked numbers. I say cherry picked because you used a period that:

(1) Avoided most of the great depression fall, that is you didn't start in a region from 1928-1930 when the stock market was far above the 1926 levels.
(2) Avoided the stock market crash and further pause from 2000 onwards.

Given that, I will use your dates anyways. You didn't specify which part of the years 1926 and 1999, so I'll pick the beginning of both. The Dow Jones in Jan 1926 was about 155 and in Jan 1999 was about 9400. So lets do the math. The return just on the stocks was 5.79%. Why? Because 155*1.05785^73 = 9400. But stocks pay more than just the gain in the stock market price. They also pay dividends. Dividends WERE running about 5% on average. Thus, you GOT 5.79% + 5% ~= 11%.

However, things changed in the internet stock boom era. Dividends were ended or slashed. Now, they are closer to 2%-3%. Thus, a total return of 8% is what many experts would predict in the future (going off of the past 5.79% return on the stock price). The real picture may not be as rosy though. That 5.79% number includes years when baby boomers pretty much added money non-stop and never took any out. But, starting very soon, they will mostly all retire. A massive bunch of people will suddenly switch from adding non-stop to withdrawing non-stop. You'd have to be pretty naive to think that the 5.79% number will continue. Realistically, we may be getting lower than 11% and lower than 8% return for the next few decades (until the baby boomers die and stop selling their stocks).

Your real math should be more like this: assume 7% return yearly over 40 years. Thus, the $200 becomes $200*1.07^40 = $3000. Inflation adjusted, that is just $800 worth of goods or services in today's dollars. If you are lucky and do get 11% yearly returns (and assuming there aren't bad inflation years), you'll get $3600 in inflation adjusted money in 40 years. $3600 is a lot. But it is a far cry from the $200 billion that you claimed.

 

[XxPrOdiGyxX]

seriously is this a parody thread? any kind of stupid thread i think is a parody now.

 

[CPA]

I wish schools would replace sex education with finance education. Seriously, collectively we know a whole hell of a lot about sex, but the vast majority, OP included, has no concept about finance.

 

[Ricochet]

Don't listen to these tards, OP. Put your plan in motion and then come back and laugh at us.

 

[Capt Caveman]

Wow.

OP, how old are you and your brother?

 

[XxPrOdiGyxX]

Originally posted by: ricochet
Don't listen to these tards, OP. Put your plan in motion and then come back and laugh at us.

Let us know in a year. I was disappointed by Ropeadope's results...maybe you will give me some hope. I will check back on this thread in a year's time.

 

[mundane]

I had two great money making ideas when I was a wee lad, too:
1) Hidden treasure. Went around and pushed on *every* brick in all of my friends' basements, just in case they were the trigger. Well, that was the plan, but I got bored after more than ten minutes at each location. But imagine the treasure!
2) If I were to ever stumble upon a wish giving device, I'd ask for *unlimited* wishes! Boy, was I crushed when I saw that same request turn up on some cartoon (Duck Tales?), and wondered who had sold me out.

 

[Sureshot324]

10% a year is still very optimistic for a mutual fund.

 

[PlatinumGold]

ya, regardless of the math, how do you even buys mutual funds without lifting a finger?

 

[Special K]

Originally posted by: dullard
Everyone has pointed out the issue with the monthly vs. yearly and the 20% calculation instead of 10%. But there is one more problem.

The stock market will most likely NOT grow at 11% per year in the next few decades. Lets look at your cherry picked numbers. I say cherry picked because you used a period that:

(1) Avoided most of the great depression fall, that is you didn't start in a region from 1928-1930 when the stock market was far above the 1926 levels.
(2) Avoided the stock market crash and further pause from 2000 onwards.

Given that, I will use your dates anyways. You didn't specify which part of the years 1926 and 1999, so I'll pick the beginning of both. The Dow Jones in Jan 1926 was about 155 and in Jan 1999 was about 9400. So lets do the math. The return just on the stocks was 5.79%. Why? Because 155*1.05785^73 = 9400. But stocks pay more than just the gain in the stock market price. They also pay dividends. Dividends WERE running about 5% on average. Thus, you GOT 5.79% + 5% ~= 11%.

However, things changed in the internet stock boom era. Dividends were ended or slashed. Now, they are closer to 2%-3%. Thus, a total return of 8% is what many experts would predict in the future (going off of the past 5.79% return on the stock price). The real picture may not be as rosy though. That 5.79% number includes years when baby boomers pretty much added money non-stop and never took any out. But, starting very soon, they will mostly all retire. A massive bunch of people will suddenly switch from adding non-stop to withdrawing non-stop. You'd have to be pretty naive to think that the 5.79% number will continue. Realistically, we may be getting lower than 11% and lower than 8% return for the next few decades (until the baby boomers die and stop selling their stocks).

Your real math should be more like this: assume 7% return yearly over 40 years. Thus, the $200 becomes $200*1.07^40 = $3000. Inflation adjusted, that is just $800 worth of goods or services in today's dollars. If you are lucky and do get 11% yearly returns (and assuming there aren't bad inflation years), you'll get $3600 in inflation adjusted money in 40 years. $3600 is a lot. But it is a far cry from the $200 billion that you claimed.

When will the baby boomers actually start retiring? It seems like I've been hearing doom and gloom predictions about the baby boomers for the past 10 years, but nothing has really happened yet.

 

[alkemyst]

this a parody? It has to be.

 

[thomsbrain]

Not only was the OP totally off base on his investment scheme, but he's totally off-base on his cell-phone advice, too.

T-Mobile's Hotspot only works on phones that are Wi-Fi-enabled, and the free Wi-Fi phone doesn't do email. The plan does NOT include free text messaging, even though the messages use your own internet connection. And any Wi-Fi enabled phone will do unlimited data over Wi-Fi for free, regardless of whether or not you have a data plan or the HotSpot plan or just a regular calling plan. Although with the free phone, you better check on that, too, because those old cheapo phones do their "instant messaging" as text messages, not regular internet data like a Blackberry does.

The ONLY thing you get with the HotSpot plan is that Wi-Fi voice calls no longer deduct from your minutes. That's it. And unless you talk for hours and hours every day to a million different people, it will never pay for itself. You already have unlimited myFaves, unlimited nights, and unlimited weekends. You'll never burn through your minutes as it is. And you can still enjoy the quality of WiFi calls even without the plan.

Do your bro a favor and don't give him any more advice.