Sunday, 22 February 2015

How to make 1 million dollars a year

A million dollars is a lot of money but it isn't as much as it used to be.  Adjusted for inflation, 1 million dollars in 1985 is about 2.2 million today. Nevertheless, making 1 million dollars a year would be fantastic.

How do you do it? Most people would try and find a way to make it organically such as getting a good job and saving or trying to start a business. These are both great ways to make 1 million dollars. These will give you the capital to start your road. What most average people do is different from what most rich people do. Rich people invest their money and really rich people use calculated risk.

In order to make 1 million dollars a year you have to be lucky. This can be a business idea or just good luck on investments. Rich people manage their risk. You can make 1 million dollars a year by investing it and using compound interest to your advantage.

All you have to do is get 11% a month on your investments and compound it each month. You need about 300k to make this work. That is the minimum you need to make a million dollars a year. Let's take a look at a boring chart.

MonthMonth InterestTotal InterestTotal Value
1$33,000.00$33,000.00$333,000.00
2$36,630.00$69,630.00$369,630.00
3$40,659.30$110,289.30$410,289.30
4$45,131.82$155,421.12$455,421.12
5$50,096.32$205,517.45$505,517.45
6$55,606.92$261,124.37$561,124.37
7$61,723.68$322,848.05$622,848.05
8$68,513.29$391,361.33$691,361.33
9$76,049.75$467,411.08$767,411.08
10$84,415.22$551,826.30$851,826.30
11$93,700.89$645,527.19$945,527.19
12$104,007.99$749,535.18$1,049,535.18

Here you can see the month and the interest accordingly. How do you get these kind of returns? Well, stocks can easily swing this amount within a month. Commodities can as well. You can invest in double leveraged ETFs. This way the commodity in question can sing 5-6% in either direction and you can make your money. Most commodities have a bear and a bull so you can make money either way. 

Once you make the million dollars you have to pay taxes on it. This differs from country to country but let's say you have to pay an average of about 20%. 

That means you have 800k left. The following year you can take another 300k and do it over again. Rinse and repeat. Out of all of the ways to make money, this is by far the easiest. You can be anywhere in the world and become a millionaire. 

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