Don't be Motley Fooled

By Wayne Mulligan, on Thursday, October 2, 2014

"Warren Buffett Tells You How To Turn $40 Into $10 Million."

You may have come across that headline recently – it’s been plastered all over thousands of websites.

The advertiser?

The Motley Fool.

The Fool has a great track record. They’re one of our favorite financial publishers.

But I’m a little disappointed in this ad.

You see, the claim they’re making is nothing short of fiction — and today we’ll explain why...

And then we’ll show you how to the one way you can actually turn that fiction into reality.

Foolish Math

In order to turn $40 into $10 million, you’d need to earn 250,000 times your money.

That’s a percentage increase of 25,000,000%.

So let’s take a look at The Motley Fool’s “math” to see how they go about making such a stunning promise.

They start with a theoretical $40 investment in Coca-Cola when the company first went public in 1919.

Then they adjust for 95 years of stock splits.

And then they include 95 years of dividends.

Are you starting to see where their claim goes off the rails?

Not In This Lifetime

Coca-Cola’s rise over the last century has been nothing short of extraordinary – they’ve built one of the most valuable consumer franchises in the world.

But for an investor from 1919 to reap those mythical 25,000,000% returns, there’s one small hitch:

They’d still need to be alive today.

Even if you drank Coca-Cola’s magical elixir every single day of your life, that’d be a stretch.

But There’s One Thing We Do Agree On

And that’s their conclusion.

It reads as follows:

"Fortunes, like Buffett's, were made by early investors when internet technology changed our lives forever."

In other words, the Fool believes that the way to generate Buffett-like fortunes is by getting into technology companies early.

This is a simple concept – and based on our experience and research, it’s the only proven way to generate massive returns in a realistic time frame.

Get in Early

If you look at the most profitable investments of all time, you’ll see that none of them come close to returns of 25,000,000%.

You’ll also won't see any investments with a 95 year holding period either.

But you will see that early investors in eBay made 745 times their money in just 4 years. That’s enough to turn a $40 investment into $29,800… or a $10,000 investment into $7.45 million.

And early backers of Facebook turned every $40 they invested into $80,000 – or every $10,000 into $20 million – in only 7 years.

So here’s our take based on Fool’s foolish math:

You can try to find the next Coca-Cola and hold onto it for the next 95 years – who knows, maybe your great-great grandchildren will enjoy spending the money.

Or, you can take advantage of the JOBS Act and begin to build a portfolio of high-quality, high-potential early-stage investments and enjoy the returns yourself.

Happy Investing!

Best Regards,
Wayne Mulligan

Founder
Crowdability.com

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Tags: Early-stage Investing Warren Buffett

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