The result of december’s research is as follows:

Becoming filthy rich is nothing but luck. Pure, dumb luck. To be well-off takes lots of hard work, but aiming to become incredibly wealthy is a waste of one’s time.

Take, for example Terrance Pegula. This man started an oil exploration and consulting company in 1982 with a $5,000 loan. Throughout the 80s and 90s, business was decent and the company did as any other would with its cash flow; purchase assets and equipment. By the 2000s’, East Resources Inc was an average company, nothing to special. But then an offer came along to purchase many of acres of land from Devon Energy who for some reason saw nothing interesting with it. By selling company assets Terry was able to purchase the PA land for $21 million.

Turns out, this land was filled to the top with natural gas and East Resources was sold to Shell Energy for 4.7 billion dollars. Terry joined the ranks of the people whom got damn lucky, people such as Zuckerberg and Robert L. Johnson. For the one Facebook, there are hundreds of other failed social networks. For that Black Entertainment TV, there were many failed attempts at creating similar networks.

Fabulous wealth is nothing but dumb luck. However, it is possible to be well off with hard work. Assuming you land a well paying job, investment is certainly a smart way to go. But first, remember that starting early is key to making it worthwhile. That said we’d all be better off with 200 year lifespans. Hear this:

To give you an idea of how good the stock market is as an investment, the S&P500 has continually returned an inflation adjusted 10% since 1976. A 20 year investment account with 10% interest compounded, 10K put in a year would equate to $697,299. A 100 year account however…

$1,653,563,480

Sadly we don’t live that long. Death is a bitch huh? Nonetheless, If you do invest in the stock market and average that non-atypical 10% a year, and you start investing at age 20 by age 60 you will have a gross portfolio of $5,321,110.

That is one hell of a retirement fund!

Now death is indeed the main limit to the portfolio’s growth, but assuming that you passed the portfolio onto your child with $500k already invested, another 40 years of growth would equate to $23,913,323. I certainly envy those with inheritances waiting, however I am well aware that most of the time, such endowments are simply spent uselessly. ‘Tis a shame.