How I Will Become a Millionaire From $0 and How You Can Too

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Photo by Karolina Grabowska — Pexels.com

I am aware that the title sounds like clickbait and I am not surprised if my article gets dismissed for that reason, but in reality, it’s just math. When I crunched these numbers, I couldn’t believe how much money I could realistically make from $0.00.

This article is about my story that involves my experience with an accessible side hustle and compound interest. This story lives at the intersection of the reselling and long-term investing worlds. This article is written for people who are curious to know what process I am using to become a millionaire from $0.00.

This story began when I started my 0–1k challenge, which I wrote about in my other Medium article (Click here for Friend Link). If you are not interested in the reselling world or long-term investing, you may only find ways to critique the process I am using. For that reason, I think there may be better ways of spending your time than reading this article. I do hope, however, that whoever reads or skims this article, despite their views on reselling and long-term investing, will be inspired and challenged to grow $0.00 into an equally large, or larger number using this process or your own.

The Process

My process consists of two elements. The first element is reselling/flipping, which I named 0–1k challenge, and the second element is long-term investing my net profit in the US stock market.

When I first started the 0–1k challenge, my aim was to earn $1,000 in net profit from a starting point of $0.00. The process was simple, though not necessarily flashy. I sold an item that cost me $0.00 and used my net profit to source for more items that I could flip (sell for a profit). My goal was to earn $1,000 in profit, but I ended up with $1,050 after 51 days, 44 flips, and 30–40 hours of invested time.

Investing approach one

Originally, my plan was to invest all $1,050 USD of my net profit into my investment account. This approach would have potentially yielded over $80,000 in 40 years. This figure assumed a few things. It assumed that I put nothing more into it my account than the initial $1,050. It assumed that I let that money grow at the S&P 500 annualized return rate (with dividends reinvested) based on the past 40 years (1980–2020), which is 11.5% (source https://dqydj.com/sp-500-return-calculator/). The aforementioned growth rate figure is problematic for some people, so I will also include the annualized figure without dividends re-invested, which is 8.7%, below. Take a look at the possibilities if I were to invest my $1,050 net profit.

$1,050 in 40 years @ 11.5%

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Dividends reinvested

$1,050 in 40 years @ 8.7%

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Dividens reinvested

Whatever way you slice it, a future gift of either of these amounts is fantastic and an awesome experience with growing $0.00 overtime. You can also play around with numbers using this calculator.

Investing approach two

I then wondered how much money I could realistically make from $0.00. I wondered what that math would be if I only invested $1,000 of my 0–1k challenge net profit, kept the $50 to continue sourcing and flipping. I thought that I could profit $300 monthly from that $50 and invest my $300 net profit consistently for 40 years. The math was astonishing! In fact, I couldn’t take it off my mind for a few days.

In this investing approach, I will include figures with and without dividend re-invested based on the annualized rate for the S&P 500 from the past 40 years again.

**See the “Stock Market Performance Estimation Basics” section below for more insight into these projections.**

$1,000 with $300 additional monthly invested @ 11.5%

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With dividens re-invested

$1,000 with $300 additional monthly invested @ 8.7%

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Without dividends re-invested

Did you see that? Over a million dollars in both cases!

Why $300 a month? It’s a conservative number and it’s something that I can realistically do with my schedule. Broken down, that is 20 items that I can profit $15 off of. 20 items in a month translates to 5 items a week, and if I sell at the rate I did during my 0–1k challenge (70% inventory sold), that means I will have to source 29 items in order to sell 20 of them each month. If I source 7–8 items a week, I should be on track.

I am calling this phase 2 of my 0–1k challenge, and this phase will last some time, but who is in a rush? I am not. This is money that I don’t need and is largely an experiment to see how much money I can make from $0.00.

I am not planning on retiring from this money — I invest my earned income for early retirement, and this is completely separate and fun. I will let you know what I do with my money in 40 years ❤

Also, I am aware that these numbers don’t account for inflation. $1,000,000 will not be worth what it is today. $1,000,000 today will be worth about $370,000 in today’s money in 2060.

Investing approach number three

If this is something you want to try but want to be more conservative with your assumed growth, try this approach. This approach assumes a 7% growth rate, starts with $1,000, and involves a $420 monthly contribution.

This approach means you need to sell 28 items a month and profit $15 on each item. Assuming you sell 70% of your inventory, that would mean that you need to source 40 items a month (10 a week).

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Stock Market Performance Estimation Basics

This goes without saying to an expert or someone who understands the nature of the stock market, but it’s worth mentioning to beginners.

When someone mentions projected earnings for investments in the stock market, it is an estimate, not a guarantee. These predictions/estimates are made using an assumed growth rate which is derived from historical stock market performance data. In actuality, nobody knows what will happen in the future; nobody knows what will happen in 10, 20, 30, or 40 years from now, for example. Using historical data is a way of taking an educated guess on what will happen to the value of the stock market in the future.

In my example above, I used a 40 year period. In 40 years from today, the stock market can perform better or worse than it did in the past 40 years(which is the data I used). So when you see my projected future earnings and anyone’s projections on the internet, know that it is an estimate based on an educated guess. The only question worth asking is what subset of data their assumed growth rate comes from.

In my example, I gave the performance for the S&P 500. You can also see this yourself here. Kimberly Amadeo from The Balance describes the S&P 500 as follows, “The S&P 500 is a stock market index that tracks the stocks of 500 large-cap U.S. companies.” To read her entire article on the subject, click here.

Elements That Make My Process Unique

  1. Everything that was sourced cost me $0.00 of my earned income.
  • This makes this side hustle accessible to most people because you can literally take an item from the curb with a “free” sign on it to start.
  • I did not include things that were laying around that I bought myself and at one point in time cost me some of my earned income (though that is also a great way to recover some money spent).

2. You don’t need an advanced skillset

  • This fact makes it very doable for most people to be successful. It might not be enjoyable for everyone, though, but for the right person, it’s a fun way to start/continue to invest.

3. Everything was bought and sold at a bargain

  • Sourcing for low-cost items allowed me to sell at a competitive rate.
  • People that I sold to were happy to buy my items because they got it at a bargain even amongst used items.
  • It didn’t hurt me to let go of the items because I didn’t pay retail for them.
  • Low cost to me and buyers allowed me to source many items and flip quickly.

4. I am at an advantage by investing for the long-term

  • Because the goal is to let the money grow long term, I am taking advantage of compound interest.

Follow my journey to wealth and stay updated on this phase of my 0–1K journey on my Instagram account @the.retired.millennial.

How much could you make from $0.00 and what is your process? Let me know in the comments, or DM me on IG!

Written by

A millennial en route to financial independence and early retirement.

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