In early 2019 I am setting myself the goal of generating $5 Million Dollars of capital within 5 years.
The aim is to grow an initial starting investment of $5,000 into $5 Million by 2024.
Impossible, you might say. And I might have thought the same.
But I’m going to explain why it’s not impossible.
And why I say that I am going to achieve it.
How To Make $5 Million Dollars In 5 Years
First of all, I’ve already achieved far more spectacular rates of investment return than that in the past. And I’ve done it least twice.
The first time was back in 2013. That was when I started trading Bitcoin for the first time. The BTC price went up from around $40 to a peak of over $200. For a short period it even reached $260. I was trading only for a short time – about three months or so during which that growth occurred.
That’s a price increase of 400% in 3 months. Effective annual rate would be 1600% if that were continued over a whole 12 month period.
At that time I was not trading in altcoins, apart from Litecoin. I did not invest in other coins using Bitcoin. I was just trading USD/BTC pairs.
In the event, the 1600% growth wasn’t realized. What happened was that the Bitcoin price then collapsed from the peak. I got out just in time with only small losses. I was not trading with a large principal, so my losses were minor. But 400% growth in just three months is not bad. Extremely good in fact.
It was an interesting and exciting rollercoaster experience in parabolic asset appreciation – and subsequent crash.
I then forgot about Bitcoin. I got on with my main business – IT and e-commerce, and more or less ignored the cryptocurrency sector.
Second Time Around – The Big Crypto Boom
After a break of 3 years, in 2016 I got involved in crypto again. This time on a more serious and dedicated basis.
I opened accounts with several cryptocurrency exchanges. I researched cryptocurrencies in depth. I studied practical trading techniques, in particular the excellent Babypips.com course. I learned and practised margin trading and also shorting for the first time.
And this time round I traded not only in Bitcoin but in altcoins as well.
This second period coincided with the sudden enormous take off of interest in Bitcoin and the cryptocurrency and blockchain sector in general and prices were on the up right across the board with enormous optimism and price growth being registered. It was crypto-fever time.
And I was in at the ground floor – or just above it, and values were soaring. I remember increasing my capital fund by over 250% in just one month alone. Another month it increased by around 350%.
I haven’t calculated the figures exactly for this article, but the growth in my capital fund was enormous over the period of 2016 to early 2018. The Bitcoin price grew from around $700 to in excess of $20,000 during that time.
That’s a price appreciation of around 3000% or x30 in less than two years. And I was this time also heavily invested in altcoins, mostly purchased as BTC/altcoin pairs. So my Bitcoin and with that USD portfolio value was enjoying a ratchet gearing effect, which I estimate might have been as much as x40 or 4000% USD growth over that time period.
It was an incredible experience.
Then Came The 2018 Bitcoin Crash
And then crypto crashed. As of early 2019, Bitcoin is languishing at around $3500.
I made a number of mistakes. I’ll talk about them in detail in another post. For now I’ll just say that the two biggest mistakes I made were firstly, not to get out at the peak. Or to at least to reduce my exposure in crypto by for example around 70-80% or so.
As a result, a lot of my capital growth then slowly evaporated over the coming months in 2018 as the inevitable fallback and then the bear market in crypto took hold.
Since I was invested in both BTC and altcoins, the fallback brought with it a negative ratchet reverse-gearing effect which amplifies the losses. Not pleasant. In such a market reversal you need to quickly cut your BTC/altcoin exposure. I made some adjustments, but not enough. Another error I made.
Of course, I was not the only one to make these mistakes. Plenty of others made the same errors of judgement. But it was a mistake that I made. And it cost me.
The second mistake I made was to draw an income from this amazing capital growth. As a result, I did not get the full benefits of the strong capital value appreciation.
As a result I did not do nearly as well as I could have done.
At least I was able to margin short. This time round I had no fear of shorting on margin. Which helped a little.
Past Performance Proves It Can Be Done
But the point is, this market trading experience proves that capital value appreciation around the range of 300% per annum is perfectly achievable in the cryptocurrency sector through smart trading.
The cryptocurrency industry is a new and growing sector with enormous growth potential. We’ve already seen a first initial phase of spectacular growth. 2018 has seen a pause and a fallback. The next period of rapid growth is about to begin.
It may not be growth of 3000% or 4000% over a few years. But I am happy with a fraction of that. Say one tenth. And I am going to be riding with it.
So this is what I am going to do once again. But this time aiming to avoid the mistakes that I made with my investment trading in the past.
How I Am Going To Do It
I’m starting with an initial very modest investment sum of $5000.
Here’s how my starting capital is going to grow over the coming 5 years:
Projected $5000 Capital Fund Growth at 300% Per Annum Average
year capital balance interest end balance
2019 $5,000 $5,000 $15,000 $20,000
2020 $5,000 $20,000 $60,000 $80,000
2021 $5,000 $80,000 $240,000 $320,000
2022 $5,000 $320,000 $960,000 $1,280,000
2023 $5,000 $1,280,000 $3,840,000 $5,120,000
In practice these figures may not turn out exactly as in the schedule. The end sum here is actually $5.12 Million. It could be more, it could be less. A lot can happen in 5 years – both good and bad. So it’s more than likely we will end the five year period either over or under this sum.
It depends in part what happens to the cryptocurrency markets, and what I achieve with my trading performance.
But at 300% average capital appreciation per annum compounded consistently over that 5-year time period, we will be able to turn $5000 into $5 Million by the start of 2024. 5 years from now.
Bear in mind I am not saying or implying that the price of Bitcoin has to increase by 300% every year in order to reach this target. That is not the case.
The BTC price can increase by less than that and I can still reach 300% or more on my fund value appreciation. I invest in other cryptocurrencies as well as Bitcoin. I also invest in altcoins using Bitcoin as a trading pair. So I get the benefit of gearing on my Bitcoin and USD capital value.
And the 3000% rise may have been a one-off. It was certainly a product of the crypto-fever and startup mania. But I am not talking about another 3000%, just a tenth of that.
So that is how I am going to make $5 Million Dollars in five years. Simples.
Of course, even I know that in practice it is not as “simples” as all that. For one thing, events can intervene. There’s a lot more that can be said about this projection and I will discuss some of these aspects in another post.
But past performance and my own trading experience shows that it is at least doable.
And we shall do it.
ps. What are you going to do with your $5 Million Dollars?Disclosures: The above article may include affiliate links for products and services for which this site may receive remuneration. The author or authors may hold investments in the assets mentioned in this article.
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