£1,000,000 in 1 year and 10 months - sounds like fun!!

Thats right al-motor, the title of the thread isnt meant to be taken literally, I just found it very interesting to highlight the power of compounding.

The reality is that 1% gains every day is highy ambitious and rare. And even so - you could not pump every gain back into your investment capital.

But compounding, integrate it into your future investing plans.

One point about compounding shows that if your even a tiny bit consistently profitable over a shortish time frame , ( any intraday trader who is genuinly profitable) needs very little capitol to start .Take the compounding further and trade hourly and make just .25% underlying return per hour ( currently the spread with cmc and ig index( aprox most of time (.2%+mkt), *8 hrs *20 ( current stock margin on cmc ), will double your money in under 2 days with compounding .

I've tried that. Set it up on a table with Excel, compounding all the way to hundreds of thousands. Have you ever wondered why you do that when the garden has been rosy for a while? As soon as I set myself that target, things started to get difficult and, gradually, go wrong.

I take it as it comes, these days. Another item to ease stress. We do bring stress on ourselves by setting these targets, don't we?

I think you are missing something nobody has mentioned inflation, if you factor inflation of 2.5% over the next 25 years, his £100,000 will not be worth £100,000 in today's money, it be worth around £37,000.

So 25 years have past you made £100,000 remember its only worth £37,000 in today money though, because one must factor in inflation of 2.5% it could be less if inflation goes higher over the next 25 years?...

OK, based on the above in 25 years time you money be worth £37,000. in today money...Lets say the bank will pay 5%, in the future..this leaves you with £1,850 a year for you retirement, or 35 quid a week, don't look so good now does it.

Very interesting thread.

'Compounding' is one of key to savings/wealth.

But consistency in stock market is very rare! even the big players struggle for form.

Yep - compounding works the opposite way too. if you start with 1000 and lose 50% then that's £500 - not much to cry about. However lose 50% of your 100,000 and that is something to worry about - therefore the compounding argument doesn't work - because the more capital you trade with - the more likely you are to trade it conservatively - and therefore the smaller your returns will be in later years - assuming your equity curve grows.

Let me chuck in my one cents worth...
Compounding is key but the difficulty with reaching £1m, £10m even £100m are as follows
1. If you are used to earning 50kpa how will you feel once you reach £100k - see hoggums post below. Losing £50,000 of £100,000 is the same 50% drawdown as you had at £1,000 but inside you are now dying because ......you are no longer trading with risk capital but core capital (it's now yours not "theirs"!).
2. If you trade with core capital you don't let profits run and you may even let losses get out of control (emotional trading)
3. If you manage to cope with all that lets move on to "fills". If you are trying to buy 50,000 shares or 100 futures contracts the stock/future has to be massively liquid otherwise your strategy could be ruined by slippage as you become a whale! So now your universe is much much smaller - I am not saying it's impossible but you need to think about it.

Despite all that I so look forward to the day when I can report "Yes I have done it"!!!!

This is an interesting thread.

If anyone care to download, I made up this 4% daily profit spreadsheet. If I haven't made mistakes, according to this, you'll be a millionaire by week 48 with mere seed capital of £100. So has anyone achieved this?

If it's not achievable, where do you start to go wrong?

In any case, it's nice to have it printed so I can dream on.