Goals!

The first thing we have to determine is our goals. My personal goal is financial freedom. What financial freedom means is rather open to discussion but for me it means this: "Do not relly on a daily job or anyone else to sustain a good standard of living". This does not mean having the car you dreamed about or having the exotic house at Greek islands you saw in an advertisment. It means to remove the daily anxiety of surviving... to have enough money to sustain a level of life-quality that a daily job could provide but without the job.

From that point on, many possibilites are open to make even more - a lot more to be precise. I imagine that most people never utilize their potential just because their every day survival burden does not allow then to get one step further. It is important to relieve this basic burden first and then concentrate on more ambitious goals.

To make things interesting, I will "device" an ambitious goal - I will try to duplicate the following years an initial sum of spare money strictly by online investing. I will keep you informed about where I invest and how my investments are doing. While investing, keep in mind that there are no certain path one can follow or certain (if at all) returns to expect. The nature of internet make it much more difficult to trust anyone and ofcourse, it gives spare room for villains to target your money. However, as long as one diversify and play smart, there is much room to grow money faster than traditional real-world investments.

For the sake of stimulating this discussion, imagine the scenario of investing $10000 at either:
a) an account at your local bank (they offer around 2-3% annual return)
b) certificate of deposit (CDs) at bank as well (they offer around 3-4% annual return)
c) mutual funds (depending on the type of mutual fund you can expect 8-10% annually)
d) stocks (since 1920's stocks return an average 13% annualy. Ofcourse there are much better and much worse years)
e) online schemes that offer between 80-100% ROI (ROI=Return of Investment)

Ofcourse the bigger the return the more the risk, but just for a moment, lets exclude the risk factor from our calculation. What would be the total nested-egg we would have aggregate after just 7 years of reinvesting the accumulated money with any of the above forms of investments? Here is the maths:

a) Bank account(3%) = $12300
b) CDs(4%) = $13159
c) Mutual Fund(%10) = $17138
d) Stocks(13%) = $24562
e) Online Schemes(80%) = $612220

Well, the figures talk by themselves. Many will tell you that the online scheme is not possible, or that the involved risk is too great. I will tell you that if you have some spare money that you afford to loose, then the goal deserves the risk. If you like to be in the safe side thats fine. Otherwise, get prepared for the journey ...