Making 10's Of Millions In Finance/Investments/Speculation

[DeletedUser9]

I counted the number of billionaires on the Forbes list with their source of wealth coming from "Investments"

A total number of 151 of these individuals made over $1,000,000,000 from "Investments"

What does that word really mean, I know what people like Warren Buffet, Carl Icahn & George Soros do but how did they go from so little to so much.

How does it all begin, I can't imagine any of them day trading their way to billions.

How does one really get started in the investment/finance game without a college education.

My theory is:
Get job to save money - $2,000-$20,000
Start trading with your own money until you make consistent profits - $100,000 - 1,000,000
Create hedge fund and attract richest 1% to invest in your hedge fund
Hire skilled traders and money managers to manage & grow client accounts
Watch your own bank account grow in the process

Im not just asking about hedge fund guys I'm asking how does one become a big fish within wall street.

Im sure for each of the 151 billionaires there are 100's of guys who made 20,50 or even100 million in finance/investments/speculation.

With the amount of leverage available today its easier than ever to make/lose money.

If any one is an expert in this field please reply or PM me.

 

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[pro]

They didn't do this: "Start trading with your own money until you make consistent profits" Most didn't make their first million "trading"

They found ways to add/create/extract value.

 

[DeletedUser9]

Taken from George Soros' Bio:

"Soros began to apply his ideas on reflexivity to investing, using it to predict, among other things, the emergence of financial bubbles. In 1967, he helped establish an offshore investment fund. In 1973, he set up a private investment firm that eventually evolved into the Quantum Fund, one of the first hedge funds."

 

[pro]

"Soros' experience from 1963 to 1973 as a vice-president at Arnhold and S. Bleichroeder resulted in little enthusiasm for the job and a desire to assert himself as an investor to make reflexivity profitable. In 1967, First Eagle Funds created an opportunity for Soros to run an offshore investment fund as well as the Double Eagle hedge fund in 1969...

In 1973, due to regulatory restrictions limiting his ability to run the funds, Soros resigned from his First Eagle funds. He then established the Quantum Fund in partnership with Jim Rogers, hoping to earn $500,000 after five years..."

As stated: "Most didn't make their starting capital trading"

 

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[DeletedUser9]

Jesse Livermore is an exception he turned a couple hundred into over 100 million and then lost it all due to a fragile mental state.

Im looking for answers to the original questions not whether my theory that I made up in 5 minutes is right/wrong

 

[Arandhawa23]

Carl Icahn - Corporate Raider, Strategy: Obtain 10% of company and then force new management in order to do a firesale
Warren Buffet- Invests in companies and creates value with them. He doesn't speculate but invests.
George Soros- Speculates with larger sums so has ability to move markets

You have a good strategy. If you have attractive returns a year, it won't be hard for you to get seed capital.

 

[DeletedUser9]

Carl Icahn - Corporate Raider, Strategy: Obtain 10% of company and then force new management in order to do a firesale
Warren Buffet- Invests in companies and creates value with them. He doesn't speculate but invests.
George Soros- Speculates with larger sums so has ability to move markets

You have a good strategy. If you have attractive returns a year, it won't be hard for you to get seed capital.

So if you had a personal account and turned a couple of thousand into hundreds of thousands over a specific time and presented returns and trade strategies could you get people to invest in the fund or will you have to operate it a few years with your own money and prove returns then.

 

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[MJ DeMarco]

I counted the number of billionaires on the Forbes list with their source of wealth coming from "Investments"

(4) Items...

ONE: If you want to get on the cover of Forbes, don't listen to Forbes.
https://www.thefastlaneforum.com/co...of-forbes-dont-take-advice-from-forbes.51094/

TWO: These guys serve the financial industry versus investing in it. They become apart of the institutions as opposed to investing in it. IOW, they create hedge funds. If you have $1 billion under management and charge a mere 1% management fee, there's your $10M a year.

THREE: A lot of these guys are "investors" in their own companies. Gates, Ballmer, Ellison -- all INSIDE investors in their own company where the initial transaction is a SELL, not a BUY. For average joe, the initial transaction is a BUY.

FOUR: They're all activist investors. Anytime I hear some moron claim "Warren Buffet!" as an example of stock market wealth I laugh. These guys buy so many shares they influence company policy and try to get board seats. Translation: They seek control of the company to influence decision making.

When you or I login to eTrade a buy shares, we don't get any power of control. No influence. No say. (Unless you think your shareholder vote really counts for something.)

http://www.investopedia.com/terms/a/activist-investor.asp

 

[DeletedUser9]

They become apart of the institutions as opposed to investing in it. IOW, they create hedge funds.

Aside from the huge start up costs:

Would hiring the best traders in different fields (currency, indices, shares, commodities) get them to trade a lump sum of 100,000 - 1,000,000

Generating decent returns yearly 15-30%

Get investors to fork over $5-25M

Continue to grow funds and add investors

Charge performance and management fee

 

[Arandhawa23]

Aside from the huge start up costs:

Would hiring the best traders in different fields (currency, indices, shares, commodities) get them to trade a lump sum of 100,000 - 1,000,000

Generating decent returns yearly 15-30%

Get investors to fork over $5-25M

Continue to grow funds and add investors

Charge performance and management fee

With the amount of Hedge Funds, a trader really doesn't need you if he is generating 15-30%. The money will flow to him naturally. It sounds easy to make a lot of money in the Markets, turning a couple thousand to millions, but that isn't reality. Read what MJ wrote about how the Rich use Compound Interest. If you have $10M and generate 20% for the year after Tax and Inflation, you just made $2M.

 

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[DeletedUser9]

With the amount of Hedge Funds, a trader really doesn't need you if he is generating 15-30%.

Ya but they might not have access to the capital to make worthwhile gains so they work for investment banks/hedgefunds and work on a salary and bonus basis.

If you mean traders won't need to invest in a hedge fund, you are right.

But people who invest in hedge funds are not traders they are wealthy individuals with a lot of cash laying around that they would like to grow passively.

 

[Arandhawa23]

Ya but they might not have access to the capital to make worthwhile gains so they work for investment banks/hedgefunds and work on a salary and bonus basis.

If you mean traders won't need to invest in a hedge fund, you are right.

But people who invest in hedge funds are not traders they are wealthy individuals with a lot of cash laying around that they would like to grow passively.

I think you missed my point. If a Trader is generating 20% yields, people will find him and give him their money. Good traders are magnets to capital.

 

[DeletedUser9]

I think you missed my point. If a Trader is generating 20% yields, people will find him and give him their money. Good traders are magnets to capital.

Oh ok, ya i mentioned in the original post that I should start trading with my own money and be the cash magnet and get investors.

Get job to save money - $2,000-$20,000
Start trading with your own money until you make consistent profits - $100,000 - 1,000,000
Create hedge fund and attract richest 1% to invest in your hedge fund
Hire skilled traders and money managers to manage & grow client accounts
Watch your own bank account grow in the process

 

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[ArthurDayne]

So if you had a personal account and turned a couple of thousand into hundreds of thousands over a specific time and presented returns and trade strategies could you get people to invest in the fund or will you have to operate it a few years with your own money and prove returns then.

No, no, no. You would need to do this with a decent pile of others' people money so that it's in the public sphere. This idea you have of turning a thousand dollars into hundreds of thousands via stock trading is ridiculous, and it's not what 99% of these people did. What they did was build credibility in the finance industry, build relationships, and then start investing LARGE sums of other peoples' money while having a large claim on the profits.

And the credibility is the key. Let's say you make some ballsy trades and it all turns out peachy. You're going to show some rich people your account balance and rates of return over a year, with no education or background or work history in the industry, and expect them to give you money? They would have to be out of their minds to think your rates of return were repeatable or sustainable, which is what they care about.

It's obvious this thread is a way for you to get the go-ahead to "yup go on start trading like a cowboy"... if you want to do it, go ahead. But what you're talking about is speculation, and it ends in tears. Might as well follow this to its logical conclusion and head on over to the bitcoin thread.

 

[Burned The Boats]

Hearing the title of thread, I instantly thought of Gordon Gecko. He did stock and real estate speculation. He said one of the first deals he made was real estate, he bought a building and then sold it shortly after for a 800k profit. I'm assuming he made a lot of money doing something different before that.

 

[ArthurDayne]

Hearing the title of thread, I instantly thought of Gordon Gecko. He did stock and real estate speculation. He said one of the first deals he made was real estate, he bought a building and then sold it shortly after for a 800k profit. I'm assuming he made a lot of money doing something different before that.

Maybe there's a huge gap in my knowledge here but I think you're talking about a fictional character and thus a fictional financial transaction and a fictional $800k profit.

 

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[Burned The Boats]

Maybe there's a huge gap in my knowledge here but I think you're talking about a fictional character and thus a fictional financial transaction and a fictional $800k profit.

Obviously fictional character, fictional profession? Absolutely not. Which was my point. I don't know any multi millionaires who do that, if I did, I would describe them as someone I know.

 

[DeletedUser9]

You would need to do this with a decent pile of others' people money so that it's in the public sphere.

How do you get this initial sum of money ?

This idea you have of turning a thousand dollars into hundreds of thousands via stock trading is ridiculous

With the 20:1 - 500:1 Leverage that I have access to, it may be possible.

 

[ArthurDayne]

How do you get this initial sum of money ?

With the 20:1 - 500:1 Leverage that I have access to, it may be possible.

Leverage only magnifies outcomes, both good and bad. So you're going to magnify your lack of experience? How do you think these things normally turn out?

You get that sum of money by working the finance industry for 5+ years, at a place with a good reputation. During that time you build a track record for yourself and you meet potential clients through the business. So essentially your job puts you in charge of other peoples' money first, then if you want to take it fastlane you start your own hedge fund and are off to the races. You can't just take your personal investing account around and think it will do anything for you. This is a world in which you need to be vetted.

 

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[DeletedUser9]

You get that sum of money by working the finance industry for 5+ years, at a place with a good reputation. During that time you build a track record for yourself and you meet potential clients through the business. So essentially your job puts you in charge of other peoples' money first, then if you want to take it fastlane you start your own hedge fund and are off to the races. You can't just take your personal investing account around and think it will do anything for you. This is a world in which you need to be vetted.

Is there any way to break into that industry without formal education ? If you proved yourself as a trader and maybe did an online course in professional trading could you apply at a hedge fund or investment bank.

If I owned a hedge fund I would rather hire someone who traded successfully for 2-5 years vs someone who just did a finance degree.

 

[buwatcha]

You need to come to terms with the FACT that for the retail investor the odds are stacked against you -big time.

You're basically trading against teams that are better funded by a multiple of 1000x, have more complete information than you and have faster trade execution - so much so they can arbitrage your trades.

It's fine for long term investing but if you are trying to get rich starting from a small bank roll as a retail investor the only way it will happen through the markets is pure luck.

Start a business instead. Then put your profits into a safe long term investment.

 

[Atown512]

THREE: A lot of these guys are "investors" in their own companies. Gates, Ballmer, Ellison -- all INSIDE investors in their own company where the initial transaction is a SELL, not a BUY. For average joe, the initial transaction is a BUY.

^^^this 100%

Most of the posts after MJ's seem to miss the fundamental point that he makes. Reread the sentence about the initial transaction being a SELL, not a BUY. MJ makes a very powerful point there.

Also reread the 2nd point he makes about serving the industry. It is very unlikely that you will make significant money starting out as the buyer...unless you have a lot of capital to start with. I am investing my hard work into a business that I have OWNERSHIP of and therefor, CONTROL.

I control who is part of MY team
I control what role they play in MY business
I control what products we sell, what price we sell them, and who we sell them to.
I control the overall strategy of MY business
...because of this, I will get most of the profits.

My business may not get me into the 100s of millions like Jim Koch did with the Boston Beer Company, but I will still own an asset worth millions in the next few years. In the meantime while I am building my business, I am minimizing my expenses so that I can eventually become the BUYER and accelerate my wealth through investment of idle cash.

 

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[MJ DeMarco]

Most of the posts after MJ's seem to miss the fundamental point that he makes.

Probably because isn't something they want to hear. They'd rather hear that Carl Icahn day-traded his way to $1B in net worth, starting with a $1,000 account on eTrade.

 

[GuestUser113]

How long will it take you to save 2k - 20k?

 

[ArthurDayne]

Is there any way to break into that industry without formal education ? If you proved yourself as a trader and maybe did an online course in professional trading could you apply at a hedge fund or investment bank.

If I owned a hedge fund I would rather hire someone who traded successfully for 2-5 years vs someone who just did a finance degree.

It's rare to break in without formal education - it's possible but all the harder.

You're not understanding that the premise of your entire argument is ridiculous. Thinking you can multiply your money 50x in a year from day trading is just not going to happen.

And if you knew how to multiply money 50x in a year, why the hell would you need to start a hedge fund? Do it with the million dollars already in your pocket.

 

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[Mike Kavanagh]

They'd rather hear that Carl Icahn day-traded his way to $1B in net worth, starting with a $1,000 account on eTrade.

But I once read a book that said some millionaire made his first million on e-trade using some system. I read it on some forum so it has to be true!

control

For anyone who missed Mj's point. (At least one of the many points that I've picked up on in that post. I think it is the main point to be made...)

 

[vinylawesome]

"The next greatest danger to a young business man in this community I believe to be that of speculation. When I was a telegraph operator here we had no Exchanges in the City, but the men or firms who speculated upon the Eastern Exchanges were necessarily known to the operators. They could be counted on the fingers of one hand. These men were not our citizens of first repute: they were regarded with suspicion.

I have lived to see all of these speculators irreparably ruined men, bankrupt in money and bankrupt in character. There is scarcely an instance of a man who has made a fortune by speculation and kept it. Gamesters die poor, and there is certainly not an instance of a speculator who has lived a life creditable to himself, or advantageous to the community.
The man who grasps the morning paper to see first how his speculative ventures upon the Exchanges are likely to result, unfits himself for the calm consideration and proper solution of business problems, with which he has to deal later in the day, and saps the sources of that persistent and concentrated energy upon which depend the permanent success, and often the very safety, of his main business.

The speculator and the business man tread diverging lines. The former depends upon the sudden turn of fortune's wheel; he is a millionaire to-day, a bankrupt to-morrow. But the man of business knows that only by years of patient, unremitting attention to affairs can he earn his reward, which is the result, not of chance, but of well-devised means for the attainment of ends. During all these years his is the cheering thought that, by no possibility can he benefit himself without carrying prosperity to others. The speculator on the other hand had better never have lived so far as the good of others or the good of the community is concerned."

-Andrew Carnegie

 

[SuiFeng]

One thing: other people's money.

Besides, for every person who succeeds, a thousand other (skilled ones) fail.
Why would you be successful? What is your edge?

 

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[MorgothBauglir]

One thing: other people's money.

Besides, for every person who succeeds, a thousand other (skilled ones) fail.
Why would you be successful? What is your edge?

And everyone who succeeds was once a failure. Often a catastrophic one.

The person who succeeds has two advantages
- they didn't die
- they didn't quit

 

[SuiFeng]

Ofcourse they were, nobody is born an expert.
But OP clearly underestimates the knowledge it takes to start a hedge fund. No trader is gonna make millions magically and consistently for you.
You gotta have a vision, a great strategy, a formidable team and meticulous execution. (And a big network to start with.)

How do you think you're gonna beat the benchmark, by just hiring some traders?