Luke Downey
By Luke DowneyJuly 8, 2021

How to turn $10,000 into $1,000,000

When I was 16, I got my first job as a sandwich maker. 

I was bringing in $5.15 an hour, but since I was in high school… living at home… and didn’t have a girl to impress yet, I didn’t have much to spend money on.

My goal: to save $10,000 by the time I was 18. 

This $10,000 milestone represented the foundation I felt I needed to kickstart my future.

If you’re just starting your career or your investing journey, this letter is for you…  

I’ll explain why saving up $10,000—before I ever opened a brokerage account—was critical to my long-term success.

In high school, while my classmates were buying video games and CDs, I was socking away cash little by little… 

I went on to a local college (Louisiana State University) so I could continue to live at home. And in addition to my classes, I took on a full-time bookkeeping job… which meant I started earning a lot more income.

There were plenty of times I opted to buy Natty Light beer and sift through discount clothing racks to cut back on my spending, but I was determined to walk away with a degree and a nest egg. 

By the time I was 19, I’d managed to save up that $10,000.

And it gave me the confidence to take my first financial risk: opening a brokerage account.

I opened the phonebook and called Edward Jones. At my age, the rep and I decided it made sense to open a Roth IRA (which lets you defer paying taxes on your earnings until retirement).

To get my feet wet, I plopped $2,000 into the account. Then, as I got paid, I added a few hundred more every month. I wanted the money to grow… but I shifted it slowly, to make sure I maintained a safety net. 

My first investments were in broad market mutual funds. This was in the early 2000s… and I caught a strong bull market. 

When the account grew by 40% in a little over a year, it blew my mind. It was my first taste of asset growth… and I knew I wanted a career in the stock market. 

With savings set aside, it allowed me to invest more aggressively as time went on. If I fell on tough times financially, I had enough to keep me afloat until I found another source of income.

Don’t get me wrong—I had my share of failures. Like many new investors, I dabbled and lost money on overhyped penny stocks that promised to make me rich. But I never bet too much on these risky plays. And I learned that building real wealth took two things: time and consistency.

By the age of 31, I’d made my first $1 million. 

Of course, working on Wall Street certainly helped me hit this goal… and I realize that isn’t an option for everyone.

But once you set aside your own nest egg, you can grow it into $1 million easily. All you need is time and consistency…

You see, even if I never went to work on Wall Street, my initial $2,000 could easily have made me a millionaire by the age of 49. Remember, I started with $2,000 and kept contributing $500 a month. If you assume an annual return of 10%, the account would hit $1 million before I turn 50. And even if I only contributed $200 a month, I’d hit $1 million by age 59. (See my video on retiring rich… and why time is the most valuable asset.)

They say time in the market is worth more than timing the market. In other words, it’s possible to make big gains by jumping in and out of stocks, but this “market timing” strategy is risky… Most investors will generate bigger gains by staying invested in the market and letting time do the work.

I was lucky enough to figure this out early. Watching my account grow gave me a feeling of accomplishment. And those small victories became addicting…  

All investors have to start somewhere. My goal was $10,000, and yeah—getting there took a lot of sacrifice. Your financial milestone may be different, but I promise if you stay consistent… and invest wisely… your nest egg will snowball into more than you ever imagined. 

You can hear more about my $10K journey in this short video.

Not everyone has the opportunity to save $10,000 at an early age… but I hope you’ll send this to someone who does. 

And remember, it’s never too late to start… 

Luke Downey
Luke Downey is editor of Curzio's The Big Money Report, which recommends the best long-term growth stocks. Luke honed his strategy over many years at Wall Street institutional derivatives desks, and as co-founder of investment research firm Mapsignals. Luke is also an options instructor with Investopedia Academy.

P.S. Tell us your story! Did you have a clear goal before you began investing? How did you achieve it? What did you invest in, and what was the outcome? 

Let us know here, and I’ll share your stories in an upcoming letter. Be sure to use “Nest Egg” as the subject line. 

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