How to get to £1M in ten years?

Aminatidi

Bit of fun (sort of) after some playing with a compound interest calculator.

Let's say someone gave you £250K.

Let's say someone gave you £2k/month to invest for ten years.

Let's say you wanted to stop working and be comfortable in ten years time.

Let's say you know nothing about this persons appetite for risk.

What would you do?

Including telling them it's totally unachievable   

wiseonesomeofthetime

From the author of https://forums.moneysavingexpert.com/discussion/6228500/how-to-grow-230k

I like your ambition

Albermarle

Apparently it is easy .

https://forums.moneysavingexpert.com/discussion/6228534/turn-100k-into-1-million#latest

Aminatidi

wiseonesomeofthetime said:

From the author of https://forums.moneysavingexpert.com/discussion/6228500/how-to-grow-230k

I like your ambition

Hence asking with the assumption of no prior knowledge

Probably should add that the situation in the post you've linked to is real but sometimes outlining where you are and what you've done prejudices the answers you get.

Basically I'm not a fantasist unlike some of the posts on here 

Prism

That is around 10% a year. I would invest in my current Fundsmith heavy portfolio and then drop gradually to about 70% equities and 30% cash or bonds over the last 5 years.

Retireby40

Start tonight by investing in Spurs to beat Brentford in the Caraboa Cup. 250k at 2/5 returns 100k profit. So you'll have 350k sitting there in an hour and a halfs work.

Na I'm only joking. You could just throw the money in something like Vanguard s&p 500 close the account and look at it in 10 years. You might not have a million but should have a nice enough return.

DireEmblem

Global equities have returned what 8-10% on average a year, gets you close...

Problem being by the time you get to 1m(if you do), you probably haven't factored in inflation.

Audaxer

DireEmblem said:

Global equities have returned what 8-10% on average a year, gets you close...

Problem being by the time you get to 1m(if you do), you probably haven't factored in inflation.

If you were to get from £250k to £1m in 10 years, I think that would have covered inflation okay,

Alistair31

Audaxer said:

DireEmblem said:

Global equities have returned what 8-10% on average a year, gets you close...

Problem being by the time you get to 1m(if you do), you probably haven't factored in inflation.

If you were to get from £250k to £1m in 10 years, I think that would have covered inflation okay,

Haha, yes. I’m sure no sleep would be lost.

itwasntme001

Audaxer said:

DireEmblem said:

Global equities have returned what 8-10% on average a year, gets you close...

Problem being by the time you get to 1m(if you do), you probably haven't factored in inflation.

If you were to get from £250k to £1m in 10 years, I think that would have covered inflation okay,

So IF inflation ran at 2% for 10 years, as is roughly expected, your £1m would be worth £800k roughly in real terms in 10 years.  Yeh I would probably be ok with that but its still not really £1m is it?

What if inflation ran at 5% for 10 years?  The £1m would be worth less than half that in real terms in 10 years.  I am not so sure I would be happy with that...

itwasntme001

I think the difficulty with answering these sorts of questions truthfully is that we just don't know what the world will look like over the next 10 years and one of the things that is so crucial to achieving the £1m milestone is that inflation and interest rates do matter.  Because with higher inflation/interest rates, you will need to clear a higher investment return hurdle to achieve the goal in real terms.  It means that your investments which may have worked so well in the recent past, may not necessarily work so well in the next 10 years.

If you are young enough, your best risk reward investment is in yourself.  That's probably the best way to 10x your capital in 10 years.