Ryan Daniel Moran shows how $1,000 a month invested at 21% annual returns compounds to $1.18 billion over 50 years. He walks through the math on dividend reinvestment and value investing strategies, citing Warren Buffett's approach, and mentions tax minimization and real estate as ways to accelerate the growth.
Questions this video answers
Approximately $1.18 billion.
Almost $5 billion.
21% annual return.
He states Warren Buffett averages 26%.
Chapters
Hey, come. Come check this out. Okay. Come around. Yeah, check this out. I've been running some numbers.
I've been running. I've been running some numbers on this. I. I just. Hey, Melinda, I just calculated how we can make you a billionaire.
Oh, okay.
Do you want to be a billionaire? Can you actually see my screen on here right now? So we didn't even call this video how to be a Billionaire. Isn't that the hypiest ever? So I'm reading a book right now on compound investing and value investing, and so I just wanted to play with the numbers just to fact check some things. So check this out, Melinda.
If you invested.
Okay, let me see this. If you had 50 years.
Yes.
Which, by the way, it's 2018. And lifespans are probably gonna be like average lifespan, 90 to 100. If you live. I think it's if you live to be. It doesn't matter. We're all gonna live another 50 years. Yeah. Right. So if you have 50 years and all you did was model did the exact same investments that Warren Buffett did for the next 50 years.
How much do you think it would take every year for you to put into investments in order to be a billionaire?
So the billionaire at the end of 50 years, I'd be a billionaire.
Right.
Well, my first thought is a lot.
Yeah. How much you think?
Per year?
Yeah. Or per year. Actually, let's do per month.
Okay.
What would you have to put in every month in order to be a billionaire? If all you did was copy Warren Buffett for 50 years? Of course, Warren, if Warren Buffett's living another 50 years, we're all living another 50 years. I know. This is just. This is just for fun.
Well, I mean, my uneducated guess would be thousands of dollars per month.
Okay, take a guess.
Let's say 5,000.
So you think $5,000 a month. If you put in $5,000 a month for 50 years.
I calculated a 21% interest rate, which we could talk about. How to have a 21% interest rate. It's really high, but we can talk about how to do it in a second. So you're saying at 21% interest, at $5,000 a month over 50 years, do you think you'd be a billionaire?
I would. Yes. I would probably be more than a billionaire.
I don't know. Tyler, how much do you think you need to put in every month?
I'd say like 800 to a thousand. You're gonna make my video look bad. And that's what you. What do you think money a month for 50 years. For 50 years. If you put it in the stock market, you got a 21% return a year. How much would you have to put in every month to be a billionaire at the end of 50 years?
I say 3,000. It's a thousand dollars a month. A thousand dollars a month. If you socked away $1,000 a month, 21% interest for 50 years, you'd be worth $1.18 billion and change. Isn't that nuts?
What's nuts is I don't need to be a billionaire.
Well, of course.
Of course. So now hold on. So let's play with the numbers. Let's play with the numbers a little bit. Let's say you had an extra side business. So you had an extra side business, and the side business earned.
$50,000 a year.
And all you did was invest that. What do we preach all the time? Build a business and invest the profits. So if you had a side hustle and you put $50,000 a year away over 50 years, you'd be worth almost $5 billion. Just so you know, that's 10 Cleveland Indians teams. We could start our own MLB. We could. Yeah.
So here's the thing. So question comes up of like, how do you do 21%?
Those are absurd numbers. Like average over the last 50 years is like 6 to 8. So a couple things. One, the market in the last three to five years has averaged 21%. It has averaged 21% over the last three to five years. But like historically, over 50 years, you're gonna have to beat the market every year. So there's two ways. Actually, there's three things. Number one, you have to save as much of it as possible, meaning you have to keep as much of it out of the hands of greedy politicians as possible so that you have more to invest. Because.
Let'S say you were a real estate investor that eliminated all of your taxes. Like the guy who's president right now. That's why he doesn't realize tax returns, by the way. Cause he hasn't paid tax. And forever because of real estate, he'd be an idiot if he paid any tax.
Doubles your income right there. And then number two, if you do well done value investing, meaning just investing like Warren Buffett, he averages 26%. I calculated at 21.
So all you did was paper trade what Warren Buffett did. I know I'm making up handy scenarios, but that's another actually bumps it a bit. And then number three, the best you guys, we're Calculating compound interest, right? Well, there's a form of double compounding. Have you ever heard, have you ever talked about this? So dividend paying stock is a form of double compounding. So if you've got, if you have dividend paying stock, then the dividend pays you like obviously a dividend every year. And let's just say it's 6%, they're paying you 6% dividend. But if you're reinvesting the dividend to buy more shares, then you're having a compound interest in the actual amount of the dividend. And there's this classification of dividends called dividend aristocrats, where dividend aristocrats are stocks that have increased the amount of their dividend every year for at least 20 years. So if you get the increased dividend and it's going up every year and you're buying more stock every year and you're got a side business that you're putting that money into. You have this engine that is compounding over a long period of time and that's not factoring in if the stock value is going up. So if the stock value is also going up now you have like, you have all this compound interest that is calculating over time, which is one of the ways that you might not get 21% year, 1, 2, 3 or even 4, but over a few years you're getting that, like that doubling compounding interest. And so that's like some of the ways that you can do that. We're also not factoring in if you're not investing in the stock market, if you're investing in real estate instead or if you're buying other businesses or if you're buying cash flowing websites or all of the other things that like that you could put your money in theoretically to kind of accelerate that compounding. So we're all going to live another 50 years. And.
That'S how you become a billionaire without starting a tech, without starting the next Uber. Isn't this exciting? Everyday people can be millionaires. And as you want to be a billionaire, I do not. Sure I'll be around for the 50 years.
Lifespans are gonna be way longer. Like we're all gonna, we're probably all gonna live to be 100. And you could, you could leave a billion dollars. That's crazy. Even if you don't start a business, even if you don't start a business and you just socked away a thousand dollars a month or had a side thing or some like, that's absolutely crazy. I geek out on this stuff. Do you geek out on this stuff? If so, let me know in the comments because I think it would be fun if we had, like a group that got together and shared investment note, like, notes on what investments they were following and like alternative investments and bring in some people who are experts in taxes so we all pay fewer taxes. And I think it would be. I just don't think there's a spot in the world where people are talking about this and, like sharing notes on this. And so I'm thinking about putting it together for capitalism dot com. So if you like this conversation, let me know in the comments. And we can all be billionaires. I'm pretty sure that's. You can't say that in a video. We're all gonna be billionaires. I'm joking. I don't know anything. Don't listen to a thing I say. Disclaimer. I'm not a registered investment advisor. I just ran some numbers on moneychimp.com none of this. None of this is real. Math doesn't work. He's actually just a piece of cardboard.
