Is it possible to become a millionaire (or near to) through investments?

jimjames

Glen_Clark wrote: »

The really spectacular returns are invariably made by those who have invested in their own business, not someone else's. Like Bernard Matthews who famously turned £2.50 (which he used to buy a few turkeys) into a company worth about £800 million.

Unlike Donald Trump who apparently would have been worth $8 billion if he'd invested his money in S&P500 rather than the $2bn from running his own business.

BananaRepublic

EdGasket wrote: »

The FTSE had a very good bull run from 1980 - 2000 (apart from the 1987 blip) since then it hasn't risen at all and has been hard work to make any money in. Same goes for interest rates which were as high as 15% on some Building Society accounts but are now next to nothing. Very difficult to make 1 million from just normal savings at the moment or with average 'luck' on shares as there is not much gain to compound.

I've made a nice wodge from the FTSE since the year 2000. You forget that a large part of the returns for investors come in the form of dividends.

JohnRo

I just plugged the index data into google sheets and had a go at modelling total returns since the 2000 peak.

Comparing an annual 3% and 4% dividend yield, divided by 52 then paid out and reinvested weekly, it's very crude but gives a broad sense of the power of dividend reinvestment.

coastline

Using MSCI World and FTSE 100 index I've got both returning at least 50% or more from Jan 2000.
Management charges will have to be deducted I'm thinking..?

http://www.trustnet.com/Tools/Charting.aspx?typeCode=NM990100,NUKX

EdGasket

coastline wrote: »

Using MSCI World and FTSE 100 index I've got both returning at least 50% or more from Jan 2000.
Management charges will have to be deducted I'm thinking..?

http://www.trustnet.com/Tools/Charting.aspx?typeCode=NM990100,NUKX

Well it peaked at 6,800 in year 2000 and is now around 6,200 which to me says it hasn't risen so it ain't going to make you a millionaire.

jimjames

EdGasket wrote: »

Well it peaked at 6,800 in year 2000 and is now around 6,200 which to me says it hasn't risen so it ain't going to make you a millionaire.

Again you're completely missing out the power of dividends. Each dividend reinvested in years such as 2002/3, 2008/9 would have bought units at half the current level. Overall I think the total is about 70% up over that time. So if that's a bad run what would a good one be?

Glen_Clark

Malthusian wrote: »

I'm fairly sure some of that £800m will have come from external investment rather than solely reinvesting the profits from the first few turkeys. But the point stands.

I heard Bernard Matthews say on TV about a year before he died that his original investment of 50 shillings (£2.50) was the entire capital of all his companies - nothing else had been added. Of course I cannot confirm it, but he should know, and I have no reason to disbelieve him.

BananaRepublic

Glen_Clark wrote: »

BananaRepublic wrote:

it's okay to dump on Tories, they're nasty, but Labours are lovely and cuddly.

Where have I ever suggested that?

In your forum posts over the past weeks/months/years.

coastline

EdGasket wrote: »

Well it peaked at 6,800 in year 2000 and is now around 6,200 which to me says it hasn't risen so it ain't going to make you a millionaire.

Average punter won't be a millionaire I agree but with added dividends your savings pot looks a lot better in the long term.
Hope the link works as Jan 2000 has some volatile closing prices...

https://uk.finance.yahoo.com/q/hp?s=%5EFTSE&a=00&b=1&c=2000&d=02&e=9&f=2016&g=d&z=66&y=4158

BananaRepublic

EdGasket wrote: »

Well it peaked at 6,800 in year 2000 and is now around 6,200 which to me says it hasn't risen so it ain't going to make you a millionaire.

Why not take a look here:

https://www.youinvest.co.uk/research-tools/quickrank/fund

Select UK Mid Cap Equity, and Acc distributions. Then look at the Performance. Especially over 10 years. Doesn't look too shabby does it?