The first is the hardest

They say that the first million is the hardest to achieve. But once you’ve reached that milestone, the next million becomes so much easier. And the succeeding ones progressively so.

I’ve read this comment before, though I can’t recall exactly from where. I also heard the same idea mouthed by a successful local businessman. This truism, at least I hope it is, is quite reassuring. If one examines the mathematics though, this idea is assuredly valid.

At the rate I am going now (currently, my 5-month moving average portfolio growth is at 5.91%), I should be able to reach my first million by March of 2012. If I count from the month I opened my Citiseconline.com trading account which is when I started keeping meticulous records of my progress, that would be 35 months since I started. Or practically 3 years.

If I count from the day I truly started trading (using a traditional broker), the actual length would be at least 4 years. Let me stress that: roughly 4 years to get to my first million. Along the way, I suffered huge losses – tuition fee for the school of hard knocks – before I finally got my act together with a successful trading system. Raising one million is truly hard.

But here’s where things get sweet. Looking at my master plan, what I’ve come to call my monster of a spreadsheet, I am comforted by the future prospects because the succeeding million won’t take another 4 years. The next million will come in only 11 months. And the next after that in 6, then the next in 5 – it gets easier!

Ok, I may sound too optimistic and I may not be able to maintain my monthly growth rates. But then again, who can say for sure that I won’t? Who’s to say that this year, we might see the start of a strong bull run for Philippine equities, which is very plausible by the way considering global capital is currently migrating to the more robust Asian markets. And even if my performance won’t be as rosy as 6%/mo, the picture will still be similar, with each succeeding million coming in faster than the previous.

The point I wish to make is that the first million will be difficult, that is a given. But mathematics assures us that the next ones will be progressively easier. This of course assumes a consistent performance. All this then makes a stronger case for proper money management to protect your growth.

Given if you follow a strict trading system then, project your earnings far into the future and be assured that at some point, one should be earning a million every month at least!