About the economy

How to accumulate a million.

How to accumulate a million.

Today I will tell you about a book that I read recently. "A million for my daughter" by Vladimir Savenok.

Vladimir Savenok, first Russian financial consultant, personal Finance expert, investor and founder consulting group "Personal Capital".

In the book, he described his experiment to accumulate 1 million rubles for his daughter. He started saving in 2005. Then his daughter was 3 years old.

For 15 years, he saved .2 thousand (0 per month) every year and invested it in financial instruments.

In 2018, his daughter turned 18 years old, and Vladimir's account has accumulated .5 thousand. Of these, only ,000 of their own funds were invested.

Vladimir invested all his money in a Fund that invests in the s&P500 index of the American market. This index includes shares of the 500 largest companies in the United States, including Procter&Gamble, Coca-Cola, Wallmart, Google, Amazon and others.

This is the same etf that I wrote about earlier. He would have had to spend a lot more money if he had collected each share individually. And thanks to the S&P500 Fund, he got them all at once.

This is both diversification and compound interest. It is difficult to imagine that all 500 companies will go bankrupt at once.

Fund invests in all companies included in the index, observing the specified proportion. It follows the market movement as closely as possible.

Stocks are a risky asset. They can both rise in price and fall. During the time of investing, the American market experienced the crisis of 2008. And then Vladimir had less money in his account than he did I initially made it. But he kept going toward his goal.

There was also a long period of stock growth. And the average return on this investment was 10.15% per annum in foreign currency.

Despite all the UPS and downs on average, the American market shows a return of 10% on long investment terms for many years ten years.

I hope that you are as inspired by this story as I am. The road will be mastered by the walking one!