Welcome to 200 Trades!
What this board is about
This is about the power of compound interest. In my endeavor to become a millionaire, I have mulled over quite a few ideas. However, the most intriguing to me is the idea of turning a small sum of money into $1,000,000.
Here’s how it works
I saved up a few bucks to start with that was rotting away in a savings account yielding not even enough to hedge inflation. This amount was approximately $8,000. Accepting the short term capital gains tax of roughly 30%, and roughly $25 per buy/sell of a stock, I will invest 100% of my available capital in a single security on each trade, buying as many shares as possible. Upon that security gaining at least a gross 3.1%, I will sell the security, and reinvest 100% my gains plus 100% of initial capital investment in the same or different security at a later date. If I repeat this cycle 200 times successfully, I will be a millionaire!!! I know I know, it sounds stupid, and hey, it probably is! After all, one of the first rules of investing is to diversify.
I believe it will take me 4 years to complete this endeavor, so I am counting on having to pay capital gains tax 4 times, once per tax season, or an average of 50 trades per year, if I am lucky and do my due diligence. Here’s the math:
Initial Investment $8,129
Final Balance $1,000,000
Cumulative Gain/ Capital Trading
Trade Balance Gain Gain Loss Gains Fees
1 $8,355 $226 $226 3.1% 0% $25
2 $8,588 $233 $459 3.1% 0% $25
3 $8,829 $240 $700 3.1% 0% $25
4 $9,077 $248 $948 3.1% 0% $25
5 $9,332 $256 $1,203 3.1% 0% $25
6 $9,596 $264 $1,467 3.1% 0% $25
7 $9,867 $272 $1,739 3.1% 0% $25
8 $10,148 $280 $2,019 3.1% 0% $25
9 $10,436 $289 $2,308 3.1% 0% $25
10 $10,734 $298 $2,605 3.1% 0% $25
11 $11,041 $307 $2,912 3.1% 0% $25
12 $11,358 $316 $3,229 3.1% 0% $25
13 $11,684 $326 $3,555 3.1% 0% $25
14 $12,020 $336 $3,892 3.1% 0% $25
15 $12,367 $347 $4,238 3.1% 0% $25
16 $12,725 $358 $4,596 3.1% 0% $25
17 $13,094 $369 $4,965 3.1% 0% $25
18 $13,474 $380 $5,345 3.1% 0% $25
19 $13,866 $392 $5,737 3.1% 0% $25
20 $14,270 $404 $6,141 3.1% 0% $25
21 $14,686 $417 $6,557 3.1% 0% $25
22 $15,116 $429 $6,987 3.1% 0% $25
23 $15,558 $443 $7,430 3.1% 0% $25
24 $16,015 $457 $7,886 3.1% 0% $25
25 $16,486 $471 $8,357 3.1% 0% $25
26 $16,971 $485 $8,842 3.1% 0% $25
27 $17,471 $500 $9,343 3.1% 0% $25
28 $17,987 $516 $9,858 3.1% 0% $25
29 $18,519 $532 $10,390 3.1% 0% $25
30 $19,067 $548 $10,938 3.1% 0% $25
31 $19,633 $565 $11,504 3.1% 0% $25
32 $20,215 $583 $12,087 3.1% 0% $25
33 $20,816 $601 $12,688 3.1% 0% $25
34 $21,436 $620 $13,307 3.1% 0% $25
35 $22,075 $639 $13,946 3.1% 0% $25
36 $22,733 $659 $14,604 3.1% 0% $25
37 $23,412 $679 $15,283 3.1% 0% $25
38 $24,112 $700 $15,983 3.1% 0% $25
39 $24,834 $722 $16,705 3.1% 0% $25
40 $25,578 $744 $17,449 3.1% 0% $25
41 $26,345 $767 $18,216 3.1% 0% $25
42 $27,136 $791 $19,007 3.1% 0% $25
43 $27,951 $815 $19,823 3.1% 0% $25
44 $28,792 $841 $20,663 3.1% 0% $25
45 $29,659 $867 $21,530 3.1% 0% $25
46 $30,553 $894 $22,424 3.1% 0% $25
47 $31,474 $921 $23,345 3.1% 0% $25
48 $32,424 $950 $24,295 3.1% 0% $25
49 $33,403 $979 $25,274 3.1% 0% $25
50 $34,413 $1,010 $26,284 3.1% 28% $25
51 $27,866 $813 $813 3.1% 0% $25
52 $28,704 $838 $1,651 3.1% 0% $25
53 $29,568 $864 $2,515 3.1% 0% $25
54 $30,459 $891 $3,406 3.1% 0% $25
55 $31,378 $918 $4,324 3.1% 0% $25
56 $32,325 $947 $5,271 3.1% 0% $25
57 $33,301 $976 $6,248 3.1% 0% $25
58 $34,307 $1,007 $7,254 3.1% 0% $25
59 $35,345 $1,038 $8,292 3.1% 0% $25
60 $36,415 $1,070 $9,362 3.1% 0% $25
61 $37,518 $1,103 $10,465 3.1% 0% $25
62 $38,656 $1,137 $11,602 3.1% 0% $25
63 $39,828 $1,173 $12,775 3.1% 0% $25
64 $41,037 $1,209 $13,984 3.1% 0% $25
65 $42,283 $1,246 $15,230 3.1% 0% $25
66 $43,568 $1,285 $16,515 3.1% 0% $25
67 $44,893 $1,325 $17,840 3.1% 0% $25
68 $46,259 $1,366 $19,206 3.1% 0% $25
69 $47,667 $1,408 $20,614 3.1% 0% $25
70 $49,119 $1,452 $22,066 3.1% 0% $25
71 $50,616 $1,497 $23,563 3.1% 0% $25
72 $52,160 $1,543 $25,106 3.1% 0% $25
73 $53,751 $1,591 $26,697 3.1% 0% $25
74 $55,391 $1,640 $28,338 3.1% 0% $25
75 $57,083 $1,691 $30,029 3.1% 0% $25
76 $58,826 $1,744 $31,773 3.1% 0% $25
77 $60,624 $1,798 $33,571 3.1% 0% $25
78 $62,478 $1,854 $35,424 3.1% 0% $25
79 $64,389 $1,911 $37,335 3.1% 0% $25
80 $66,359 $1,970 $39,306 3.1% 0% $25
81 $68,390 $2,031 $41,337 3.1% 0% $25
82 $70,485 $2,094 $43,431 3.1% 0% $25
83 $72,644 $2,159 $45,591 3.1% 0% $25
84 $74,870 $2,226 $47,817 3.1% 0% $25
85 $77,165 $2,295 $50,112 3.1% 0% $25
86 $79,532 $2,366 $52,478 3.1% 0% $25
87 $81,971 $2,440 $54,918 3.1% 0% $25
88 $84,487 $2,515 $57,433 3.1% 0% $25
89 $87,080 $2,593 $60,027 3.1% 0% $25
90 $89,754 $2,674 $62,700 3.1% 0% $25
91 $92,510 $2,757 $65,457 3.1% 0% $25
92 $95,352 $2,842 $68,299 3.1% 0% $25
93 $98,283 $2,930 $71,229 3.1% 0% $25
94 $101,304 $3,021 $74,250 3.1% 0% $25
95 $104,418 $3,115 $77,365 3.1% 0% $25
96 $107,629 $3,211 $80,576 3.1% 0% $25
97 $110,940 $3,311 $83,887 3.1% 0% $25
98 $114,353 $3,413 $87,300 3.1% 0% $25
99 $117,873 $3,519 $90,819 3.1% 0% $25
100 $121,501 $3,628 $94,448 3.1% 33% $25
101 $93,108 $2,775 $2,775 3.1% 0% $25
102 $95,968 $2,861 $5,635 3.1% 0% $25
103 $98,918 $2,949 $8,584 3.1% 0% $25
104 $101,958 $3,041 $11,625 3.1% 0% $25
105 $105,093 $3,135 $14,760 3.1% 0% $25
106 $108,325 $3,232 $17,992 3.1% 0% $25
107 $111,658 $3,332 $21,324 3.1% 0% $25
108 $115,093 $3,436 $24,760 3.1% 0% $25
109 $118,635 $3,542 $28,302 3.1% 0% $25
110 $122,287 $3,652 $31,954 3.1% 0% $25
111 $126,052 $3,765 $35,719 3.1% 0% $25
112 $129,934 $3,882 $39,601 3.1% 0% $25
113 $133,936 $4,002 $43,603 3.1% 0% $25
114 $138,063 $4,126 $47,729 3.1% 0% $25
115 $142,317 $4,254 $51,984 3.1% 0% $25
116 $146,703 $4,386 $56,370 3.1% 0% $25
117 $151,225 $4,522 $60,892 3.1% 0% $25
118 $155,887 $4,662 $65,554 3.1% 0% $25
119 $160,694 $4,807 $70,361 3.1% 0% $25
120 $165,650 $4,956 $75,316 3.1% 0% $25
121 $170,759 $5,109 $80,426 3.1% 0% $25
122 $176,027 $5,268 $85,693 3.1% 0% $25
123 $181,458 $5,431 $91,125 3.1% 0% $25
124 $187,057 $5,599 $96,724 3.1% 0% $25
125 $192,830 $5,773 $102,497 3.1% 0% $25
126 $198,782 $5,952 $108,449 3.1% 0% $25
127 $204,919 $6,136 $114,585 3.1% 0% $25
128 $211,245 $6,327 $120,912 3.1% 0% $25
129 $217,768 $6,523 $127,435 3.1% 0% $25
130 $224,493 $6,725 $134,160 3.1% 0% $25
131 $231,427 $6,934 $141,093 3.1% 0% $25
132 $238,575 $7,148 $148,242 3.1% 0% $25
133 $245,945 $7,370 $155,612 3.1% 0% $25
134 $253,544 $7,599 $163,210 3.1% 0% $25
135 $261,378 $7,834 $171,045 3.1% 0% $25
136 $269,455 $8,077 $179,122 3.1% 0% $25
137 $277,782 $8,327 $187,449 3.1% 0% $25
138 $286,368 $8,585 $196,034 3.1% 0% $25
139 $295,219 $8,852 $204,886 3.1% 0% $25
140 $304,345 $9,126 $214,012 3.1% 0% $25
141 $313,754 $9,409 $223,421 3.1% 0% $25
142 $323,455 $9,701 $233,121 3.1% 0% $25
143 $333,456 $10,001 $243,123 3.1% 0% $25
144 $343,767 $10,311 $253,434 3.1% 0% $25
145 $354,398 $10,631 $264,065 3.1% 0% $25
146 $365,359 $10,961 $275,026 3.1% 0% $25
147 $376,659 $11,300 $286,326 3.1% 0% $25
148 $388,310 $11,651 $297,977 3.1% 0% $25
149 $400,322 $12,012 $309,989 3.1% 0% $25
150 $412,706 $12,384 $322,373 3.1% 35% $25
151 $309,146 $9,270 $9,270 3.1% 0% $25
152 $318,704 $9,558 $18,828 3.1% 0% $25
153 $328,558 $9,854 $28,682 3.1% 0% $25
154 $338,717 $10,160 $38,842 3.1% 0% $25
155 $349,192 $10,474 $49,316 3.1% 0% $25
156 $359,991 $10,799 $60,115 3.1% 0% $25
157 $371,125 $11,134 $71,249 3.1% 0% $25
158 $382,604 $11,479 $82,728 3.1% 0% $25
159 $394,439 $11,835 $94,563 3.1% 0% $25
160 $406,641 $12,202 $106,765 3.1% 0% $25
161 $419,221 $12,580 $119,345 3.1% 0% $25
162 $432,191 $12,970 $132,315 3.1% 0% $25
163 $445,563 $13,372 $145,687 3.1% 0% $25
164 $459,350 $13,787 $159,474 3.1% 0% $25
165 $473,564 $14,214 $173,688 3.1% 0% $25
166 $488,218 $14,655 $188,343 3.1% 0% $25
167 $503,327 $15,109 $203,452 3.1% 0% $25
168 $518,905 $15,577 $219,029 3.1% 0% $25
169 $534,965 $16,060 $235,089 3.1% 0% $25
170 $551,523 $16,558 $251,648 3.1% 0% $25
171 $568,595 $17,071 $268,719 3.1% 0% $25
172 $586,195 $17,601 $286,320 3.1% 0% $25
173 $604,342 $18,146 $304,466 3.1% 0% $25
174 $623,050 $18,709 $323,175 3.1% 0% $25
175 $642,339 $19,289 $342,464 3.1% 0% $25
176 $662,226 $19,887 $362,350 3.1% 0% $25
177 $682,729 $20,503 $382,854 3.1% 0% $25
178 $703,868 $21,139 $403,992 3.1% 0% $25
179 $725,662 $21,794 $425,787 3.1% 0% $25
180 $748,132 $22,470 $448,256 3.1% 0% $25
181 $771,298 $23,166 $471,423 3.1% 0% $25
182 $795,183 $23,884 $495,307 3.1% 0% $25
183 $819,807 $24,625 $519,932 3.1% 0% $25
184 $845,196 $25,388 $545,320 3.1% 0% $25
185 $871,371 $26,175 $571,495 3.1% 0% $25
186 $898,358 $26,987 $598,482 3.1% 0% $25
187 $926,181 $27,823 $626,306 3.1% 0% $25
188 $954,867 $28,686 $654,991 3.1% 0% $25
189 $984,442 $29,575 $684,566 3.1% 0% $25
190 $1,014,934 $30,492 $715,058 3.1% 0% $25
191 $1,046,371 $31,437 $746,496 3.1% 0% $25
192 $1,078,783 $32,412 $778,907 3.1% 0% $25
193 $1,112,199 $33,416 $812,324 3.1% 0% $25
194 $1,146,652 $34,452 $846,776 3.1% 0% $25
195 $1,182,172 $35,520 $882,297 3.1% 0% $25
196 $1,218,794 $36,622 $918,918 3.1% 0% $25
197 $1,256,551 $37,757 $956,675 3.1% 0% $25
198 $1,295,478 $38,927 $995,602 3.1% 0% $25
199 $1,335,612 $40,134 $1,035,736 3.1% 0% $25
200 $1,376,990 $41,378 $1,077,115 3.1% 35% $25
200 $1,000,000 $0 $0 0.0% 0% $0
Every 51st trade I assessed a short term capital gains tax on the cumulative gains from the year before. A schedule Y-1 was used to determine the effective tax rate…
http://www.irs.gov/formspubs/article/0,,id=150856,00.html
Rules
Since I am obviously not a professional, I have no obligation to adhere to many trading laws that aren’t already imposed on me by my online broker. So, I will apply some self-imposed rules…
1) Most importantly, as soon as the single security exceeds a gross 3.1% gain, I must sell it. If I fail to notice the gain due to the inconvenience I call my “full time job,” I must give reason why the stock was not sold.
a. A gross 3.1% gain consists of the bid price being 3.1% higher than my average owned share price.
b. The average owned share price excludes trading fees and commissions and all taxes.
c. I will sell a stock at anytime I feel uncomfortable with the investment. In other words, there will be no universal pre-set stop limits.
2) I will announce the day of my purchase of a stock, why I chose that particular stock, how many shares I own, and at what average owned share price.
3) When I sell a stock, I must announce when I sold it, my percent gain (or loss), the price I sold the stock, and must update the trade count along with the overall balance of the cash account. I will make a side-by-side comparison of my trading history so as to track my progress.
a. The only exception to this rule will be when I must pay capital gains taxes. In this scenario, I would own a stock and must sell as many shares as is equal to match what I owe in capital gains taxes from the gains achieved in the previous year. This can be done at any point between knowing the capital gains taxes owed and April 1st of each year.
4) I must invest as close to 100% of my current account balance minus the trading cost each time a buy into a security.
5) I must relinquish 100% of my holdings in each security I sell.
6) I cannot give out my personal information.
7) I can trade stocks of all shapes, sizes, colors, and market caps...
a. I can trade stocks on any exchange allowed by my broker.
b. I can buy or sell for whatever reason I feel, whether it is the result of an educated guess, a hunch, an asinine reason, chart motivated trade, fundamentals, etc. etc.
8) I must reinvest any dividend gains directly into the stock I currently hold or into the trading account if I do not currently own a stock.
9) In case there are any doubters, I will occasionally scan redacted copies of my account documents to prove I am actually endeavoring to do this.
Disclaimer
All statements posted by me on this board and iBox are solely those of me, me, and me. If my statements happen to represent the opinions of other investors, it is purely a coincidence. PLEASE DO NOT BUY, SELL, OR HOLD SHARES BASED ON MY COMMENTS, OPINIONS, STATEMENTS, AND ASSESSMENTS!!!
Don’t do what I do. I am not responsible or liable for others’ trading decisions. Trading decisions should be the result of your own due diligence and research.
I’m no lawyer, but I think that will do.
