
Ask HN: How do I turn 100K into 1 million? - wagerlabs
It's been a blockbuster year and I'm looking forward to 100K EUR in my checking account very soon.<p>How do I turn that into 1 million?<p>I'm a self-employed contractor, have been at it for over 10 years.<p>My strong point is learning complex things from scratch, on my own and quickly. I'm an autodidact and a college dropout. Judging by the amount of money I made from programming over the years, I'd say I'm a pretty good programmer. I'm driven by a quest for knowledge and I'm a voracious reader.<p>I'm quite tenacious and often seek perfection. I once rewrote a compiler from a trading language to C# in Haskell, OCaml and Lisp.<p>My weak point is that I get bored quickly, otherwise I would have developed an app and sold it already. My other weak point is that I love to work alone and hate lots of people around. Last but not least, I take a hedonist approach to programming and only take on projects that please me. I'm fine on the Mac, for example, and wouldn't go to Windows even if it made me money.<p>Trading is fun and interests me. I would also love to learn electronics, with an eye towards low-power gadgets on sailboats. I love sailing and will take August off to sail and get a RYA coastal skipper qualification. I'm also interested in robotics and embedded bits, although that's related to electronics.<p>I live in Tenerife (Canary Islands, Spain) and would love to flip real estate but I'm afraid 100K won't carry me far. I'm married and have two daughters. I rent but paid cash for a recent BMW last year.<p>I'm thinking that trading may be my best bet. My first trade was back in 1996 when I was working at Bear Stearns and AOL announced unlimited dialup. I drew about 700 bucks from my credit card and bought two AOL calls (different months). My bet was that AOL will dominate the competition in the short term and I was up to over 2K in a month or so. Then AOL ran out of capacity and I was back to my 700 bucks after paying about 200 in commission to Bear.<p>I also bought 5K worth of APPL calls before Apple announced the iPhone. I had 12.5K less than two weeks later. Unfortunately, I rolled the profits into more calls to speculate on the following APPL earnings announcement. The iPhone bit was the big news, though, earnings did not matter and volatility dropped off. I got out with the same 5K I started with.<p>I tried small scale straddling and strangling (options) around earnings announcement but lost a bit of money. I also lost around 1.5K day-trading trading S&#38;P 500 and Russell 2000 e-mini futures.<p>I think there are plenty of opportunities for careful market speculation, particularly around events (BP oil spill?). I'm going through dozens of trading books and certainly won't repeat my amateur mistakes above.<p>I'm pretty content with what I have and use. I can't find a pressing need to develop something for myself and I can usually put up with my tools (Emacs, Erlang from the command-line).<p>I work alone at home and thus have a hard time spotting inefficient business processes. It was much better when I worked on Wall St, for example. I tried to launch a Securities Lending platform in 1997 but I guess I was way ahead of my time.<p>I also sold trading software full-time for a year, on a 30% commission. I found that existing trading software imposes the need to program on people who don't want it. Think making a non-programmer develop trading models in C#!<p>A wise friend, an experienced businessman, suggested that the only way to have a chance in hell to grow those 100k in to "bet on yourself" one way or the other.<p>Any other suggestions?<p>http://www.linkedin.com/in/joelreymont
======
pdx
Why do you want a million euro? Are you going to spend one million euro on
something?

I bet the answer is that you aren't going to spend $1M on anything. You intend
to put the $1M in some very safe investment and live off the interest,
correct?

So you don't really need $1M, what you need is $100K per year passive income.
It's the same thing.

If you look at your problem that way, things seem more doable. Instead of
spending 10 years making $1M, you can spend the same 10 years growing your
passive income from $1K to $10K to $100K.

As somebody who has made a lot of money in real estate and in stocks ... and
who has also lost much of it, I believe a business is a better investment for
you than stocks or real estate. A business is a machine that produces money.
Making your money in stocks or real estate is like hunting. Every time you go
hunting, you may be lucky, but you may be unlucky. It's not conducive to a
stress free state of mind.

Since your current business can't ever be passive, you'll need to start a new
one that can be. Your sailboat electronics passion seems like a good one.
Electronic products can be passive income and sailboat owners have money.

Good luck.

~~~
HSO
When I first read the question, I thought Oh boy, there's going to be some
asinine suggestions to this one. But this is one of the most sensible answers
I can think of. Seeking to turn 1 buck to 10 in the markets, and quick, sounds
like the beginning of a disaster. Reframing the question to one of passive
income, one can view the 100K as a sort of financial buffer that can finance
or cushion different forays into passive income generating ideas (for example,
take a month off regular work, take 5K (or whatever it costs to maintain your
family) out of the buffer, and work on some crazy idea that may or may not
work out. You could do this 20 times (although I doubt anyone could be so dumb
as to totally lose it all 20 times in a row!) and even if it's all financially
unsuccessful, you would have learned a ton! That sounds doable and realistic
and actually fun.

On a personal note: I'm in a similar position to the OP, except I inherited
the money a few weeks ago, and am still trying to figure out how to go about
this. Thanks a lot for this new perspective!!!

~~~
wagerlabs
We should get in touch!

~~~
HSO
Thought the same! Will send mail this week.

------
rjett
Invest in adderall and see where that takes you. Joking.

In all seriousness, drop the desire to turn 100k into 1 mil in x amount of
time. That will lead you into wreckless, speculative behavior. Trading is
tempting for you because it offers instant feedback. With one or two
successful trades, people tend to extrapolate their returns into future
returns, believing that it's possible to repeat these trades over and over
again. Odds are stacked against them. Don't fall victim to this thought
pattern.

Smart investors invest where their odds are highest of winning. From what
you've written, it sounds like that investment would be in yourself. What led
you to this "blockbuster" year? Can you grow and expand upon the factors that
led to such a successful year? I'm sure there's some opportunity. Do it.

~~~
wagerlabs
What led to my blockbuster year? Luck and my desire to work more. I used to
work 1-2 weeks out of 4, that was enough for everything since my burn rate is
low (3-3.5K EUR/mo). I sailed for about 8 weeks in the first half of 2008, for
example. The relaxed work style didn't let me save much, though, not enough to
get a shot at independence.

~~~
rjett
I guess "independence" is in the eye of the beholder. Working 1-2 weeks out of
4 and sailing around sounds like a pretty nice level of independence for
someone like me. If your idea of independence is to never have to work a day
of your life ever again if you choose not to, it sounds like the solution
would be to "work more" in the near term. It sounds like you're a pretty
bright fellow and when you do work, your services are highly valued. The more
you work, the higher your odds of "getting lucky" are.

~~~
wagerlabs
Aye!

------
brosephius
>I'm thinking that trading may be my best bet

if you had asked "how do I turn 1 million into 100K?" I think I'd agree with
that statement.

~~~
lanstein
How do you make a small fortune in the x business? ...

------
vessenes
Timescales: How long do you have to turn your 100k into 1mm?

(I'm assuming here we're not considering inflation. )

If you need it in 10 years, you're going to need an annualized 25% or so rate
of return. That's unlikely.

If you need it in 25 years, you can get by with 10%. That's definitely
possible, if you follow good principles.

On the other hand, if you can put in an extra 50k a year, You should have
close to $1mm in 10 years. (550-600k in investment, 400k in growth).

Given that you hate people and are super smart, and have a self described
penchant for gambling, I would suggest you not try to grow your business, and
also that you stay away from the stock market as long as you think timing it
is a great plan.

All that adds up to (in my mind) buying some real estate. You live in a
beautiful vacation spot, and could find property managers so that you don't
have to deal with tenants.

Your 100k could easily buy a 300k small property, with some left over for
unforeseen problems. Try it! It won't fluctuate in value like your previous
stock market purchases, that's for sure.

~~~
wagerlabs
Thanks! I don't hate people, I just get tired of lots of people around me and
need the solitude of my office.

My timeline is 10 years or less and I could, likely, add 50K a year.

I don't have a penchant for gambling, I traded twice in ... ugh... 15 years or
so. I stopped because I figured I didn't know enough and wasn't capitalized
well.

Real estate is great long-term. There are some awesome deals to be had in
Tenerife as a lot of people are giving up their speculatively bought houses.
You can buy a 1-bedroom apartment in a well-travelled tourist area near the
beach. This will cost less than 100K in foreclosure.

Buying one apartment a year and renting it out to tourists is a great option,
so long as the market has hit bottom, more or less. I don't think the Spanish
real estate market has hit bottom, though.

~~~
tansey
> My timeline is 10 years or less and I could, likely, add 50K a year.

Just a quick note here:

With 100k in year 1, plus 50k per year after, for a total of 10 years, you
need to get about 11.5% annualized return after taxes and fees.

Good luck. :)

~~~
vessenes
$50k plus an additional 50k per year at 10% = $1,006,245.8 (compounded
annually). What fees are you referring to? Different investments carry
different loads, including nearly no load (or one included in calculations),
for say real estate or direct stock purchases.

~~~
tansey
Ah, yeah I was assuming he meant this year (0% interest) plus 9 additional
years of x% interest. I see now that I should have given him another year.

Okay, so he only has to return 10% annually. Still extremely difficult. :)

~~~
vessenes
Many, many value investors have easily beat 10% p.a. over extremely long
investment periods.

Very very few people who market themselves as investment advisors successfully
deliver these returns to their clients, net of fees and taxes.

~~~
tansey
Maybe from 1950-1999. I do not know of many value investors who returned 10%
annual over the last 10 years.

------
aaronblohowiak
Ahoy! Sailing is great, I've got a personal goal to do the SHTP in 2014.

You have a terrible investment track record and a good programming track
record. Go with your strength. Since you have a short attention span, you
should focus on short projects that you can ship quickly.

Bring maritime weather / charts to the iphone, I'd buy that :-)

~~~
wagerlabs
Some of that already exists, check out the App Store. I'm thinking an iPad
would make a decent chart plotter, though :-). Now, if I could only find a
weather-proof enclosure!

~~~
aaronblohowiak
I have TideApp, but I haven't seen anything like weatherfax on the iphone :-)

You're right that chart plotter on the ipad would be pretty tops. As
waterproofing.. you'd have to use a material that lets the capacitance of your
finger through.

~~~
wagerlabs
Do you know of any material that lets capacitance through?

The other issue is connecting a GPS to the iPad if the internal GPS is not
good enough. I don't know if it is yet, will take my iPad sailing this August.

Apple requires you to build external accessories specifically to work with iOS
devices. I think that even requires a special chip. An external Bluetooth GPS
would likely be power-hungry.

I think <http://www.tacktick.com/> are an awesome example of low-power marine
electronics. They designed and built their own low-power wireless network to
connect their instruments and powered them with solar energy whenever
possible.

~~~
pietrofmaggi
"Do you know of any material that lets capacitance through?" Just avoid
insulators!

Regarding the connection of a GPS to the iPad, I don't have on hands the
technical details of the iPad (or iPhone) GPS, but on open water, it will
surely be better that in an urban canyon. It can see a lot of sky --> a lot of
satellite. So, the internal GPS may be not so bad in your scenario.

But an external GPS with an active antenna will always be better (better GPS
chip, better antenna and fewer electronics noise being far from the iPad
radios). You can find kits build by Microchip and Cypress for the connection
of external devices to the iPod/iPhone, but you first, must enroll in Apple’s
Made for iPod licensing program, by completing the online application at
<http://developer.apple.com/programs/ipod/>.

Here is the microchip kit:
[http://www.microchip.com/stellent/idcplg?IdcService=SS_GET_P...](http://www.microchip.com/stellent/idcplg?IdcService=SS_GET_PAGE&nodeId=2872&param=en546067)

And here's the Cypress one: <http://www.cypress.com/?rID=41030>

Let me know if you need some advice on the GPS stuffs.

~~~
pietrofmaggi
iPad 3G and iPhone 4 use the Broadcom BCM4750 receiver:
[http://www.broadcom.com/products/GPS/GPS-Silicon-
Solutions/B...](http://www.broadcom.com/products/GPS/GPS-Silicon-
Solutions/BCM4750)

"High-sensitivity, -157dBm assisted acquisition sensitivity (with coarse time
assistance) and -162dBm tracking sensitivity, enabling indoor and deep urban
operation"

You can compare this with an usual SIRF Star III based GPS receiver (Leadtek
9101x), which is not assisted:
[http://www.leadtek.com/eng/gps/overview.asp?lineid=8&pro...](http://www.leadtek.com/eng/gps/overview.asp?lineid=8&pronameid=310&check=f)

With a sensitivity of -159dB and a cold start time of 35s (worst case
scenario).

I think that, on open water, with a good sky visibility, the GPS included in
the iPad 3G and the iPhone 4 should be more than adequate for this kind of
usage.

------
yoseph
"Trading" is not the answer. "Investing" is.

Read The Intelligent Investor and Security Analysis, both by Benjamin Graham;
and F Wall Street by Joe Ponzio (His website fwallstreet.com also has a number
of gems. Particularly, his post about how to value a business
[http://www.fwallstreet.com/article/25-calculating-the-
value-...](http://www.fwallstreet.com/article/25-calculating-the-value-of-a-
business-part-i) )

If you read those materials, you will learn how to invest and using the
approaches set out in those books, I believe you can turn $100k to $1m.

~~~
arthurdent
I'm going to invite a flurry of disagreement here, but I'm just going to say
it. Investing is not the answer, trading is.

II and SA are phenomenal books, but they are also more relevant to a different
time in market history. The basic tenets certainly hold true. (Ben Graham
famously loved buying companies under book value. Thats still a winning bet
and will continue to be.)

Its important to realize the macro picture here as well though. The last 70
years have produced tons of literature saying that long term growth is the way
to do it and that int he last 70 years long term investments have
outperformed. This period of "proven returns" coincides with the US rising to
the world superpower, becoming the richest nation on earth, and spending
beyond our means.

I have a massive faith in America, but its irresponsible to not consider that
times have changed. The next 70 years could be like the last 70, but we stand
at a social/economic/global power precipice which could imply a dramatically
different America in 10 years. If the American economy sucks hard for the enxt
10 years, returns are just going to suck. Long buy and hold portfolios have
won in large part also because the American economy has expanded for the last
70 years.

The other huge difference is that HN is comprised primarily of extremely
computer savvy people. The tools wielded by the readers here are uniquely
suited to tackle financial problems that can produce excess returns that far
exceed

The risks aren't significantly higher, yet the upside is disproportionately
greater when utilizing the techniques (computing) and infrastructure
(electronic markets and cheap execution) that have become available in the
last 10 years that did not exist in almost the entire duration of the period
that produced all of the "buy and hold is the only way to go" literature.

HN people are smart. REAL smart. That's why a lot of people have read
mountains of literature to educate themselves. Unfortunately, the success of
buy and hold strategies in the last X years produced a bias towards that sort
of literature and everyone's drank the kool-aid.

The last 5 years, and even more the last 2 years have democratized the
quantitative trading process, exposed the tools to those not in the industry,
and changed the face of finance.

There's still a place for the Intelligent Investor. But if you're the average
HN reader, Ben Graham style investing isn't your best shot in finance.
Quantitative trading is. Both will take a lot of work. It won't be easy. But
if you're going to invest serious time, think about how much the tools and the
game have changed in the last 2 years and ask yourself if you really think
that all the literature that predates this change is indicative of the new
world.

I too believe you can turn 100k to $1mm. and I think you can do it a lot
faster.

~~~
jimbokun
"I have a massive faith in America, but its irresponsible to not consider that
times have changed."

So diversify with foreign assets.

~~~
arthurdent
great idea. that's exactly what you should do if you're insisting on an
intelligent investor style value portfolio, and thats what Buffet does.

But the real point is that trading isn't a chump game and the entire notion of
"long term holding is the best strategy" is premised on a lot of old notions
that predate the current market environment.

------
dean
"I rent but paid cash for a recent BMW last year" One tip I can offer is not
to do things like that. A house or condo is generally an investment that
increases in value, so you should buy that for yourself instead of buying it
for your landlord. And paying a lot for a car that will be virtually worthless
in 10 years won't help you achieve your goal.

~~~
mikebo
Buying isn't always a better idea than renting. The OP lives in Spain, but the
nytimes has a US based rent/buy calculator that is very good:

[http://www.nytimes.com/interactive/business/buy-rent-
calcula...](http://www.nytimes.com/interactive/business/buy-rent-
calculator.html)

It basically comes down to how long you'll be in the house, and how much you
think it will appreciate over that time. There are plenty of scenarios where
renting comes out ahead.

------
pietrofmaggi
"How do I turn that into 1 million?"

Iterate this last year ten times. ^_^

On a more serious suggestion, try to stick to something a bit longer, make a
product, iterate it some times and finally take profit from it. BTW, What
happened to your poker server?

~~~
wagerlabs
I don't play poker and I'm not interested in learning. I inherited the
software at <http://sourceforge.net/projects/openpoker/> and tried to fix it.
I then thought I'd write a much better server quickly.

I ended up writing a server that's scalable and robust but incompatible with
the original Delphi client. Part of it is that the contract programmers
blackmailed me into Delphi (C++ will cost you more!) and I was greedy. The
other part is that they are serializing Delphi objects and shipping them down
the wire. Supporting that would be a nightmare.

It's hard to sell a server without a client and my server is pretty bare bones
too. There's only Texas Hold'em, no tournaments. There's no accounting,
payment processing, affiliate tracking, etc. I tried to sell it as a base
people could build around but not very successfully. I broke even on
development but that's it.

Ultimately, poker people are fine with running a 200K solution on scores of
servers that handle just thousands of clients. There's not much interest in
squeezing that into a handful of servers since marketing expenses of a new
poker room dwarf those of hardware and software.

------
michael_dorfman
I'd agree with your friend.

You obviously have some skills, or you wouldn't have been able to earn the
100K. So, given the recent windfall, there ought to be a way to use the 100K
to magnify your income.

What's the bottleneck in your regular business? What is it that is keeping you
from having a blockbuster year each year? Or, even better, having a double-
the-blockbuster year?

Once you've identified the constraint, try to figure out how to use some (or
all) of the 100K to lift it.

Then: rinse, lather, repeat.

~~~
wagerlabs
The bottleneck is that I sell a service and I can only offer so much of it.
Also, my base rate is 100 EUR/hr, about $125, although I always quote a fixed
price.

I found a niche in writing Mac device drivers for a big company this year. I
had to buy a hardware USB analyzer and IDA Pro to reverse-engineer a good
chunk of LabVIEW so I was able to charge a good price for that project.

I could raise my base rate and charge more for projects (fixed price) but that
doesn't scale and there are only 24 hours in a day.

~~~
petervandijck
There's a trick a lot of contractors/consultants use if they work in the same
industry for a while. They create a "platform" (which honestly is just a few
libraries of code), and then charge clients more to use their "platform"
(which comes with nice-looking sales materials). You still do the same amount
of programming, and charge the same for that, but charge extra for use of the
"platform".

You sell the client on the fact that they'll save heaps of money using your
platform because a lot of code is already written. This isn't actually true,
code re-use doesn't save that much money, but it sounds good and they tend to
buy it. I've seen it happen over the years again and again and again.

It's a bit tricky but loads of people do it. It used to be cms platforms, now
it's social networking platforms or mobile app platforms. Same trick.

It's a little dirty though but one of the only ways to actually "scale"
consulting. The other way is to have high-powered sales people, and hire
superjunior beginner who do all the work. I think that's even dirtier.

~~~
wagerlabs
I don't think it needs to be dirty. I think a "platform" is a good idea.

------
illumin8
My advice to you is to have a long timeline. If you try to turn it into a
million in 1 year you're going to take too many risks and fail.

Diversify your investments. Putting $100K in 1 stock is how you lose money.
Try picking 10-15 companies in different industries: technology, healthcare,
finance, commodities, etc. Do your research and pick companies that have a lot
of upside potential.

For example, if you wanted to make a bet that the mobile space is going to be
the future of computing, which seems pretty likely, start buying up suppliers
of tablet computers. ARM holdings, Qlogic, etc, find all of the chip makers
that make chips in an iPad and research each one of them.

Finally, I would recommend you protect your earnings. My portfolio is up 35%
in the past year, and I keep trailing stop limit sell orders on all of my
securities to protect my winnings. The global economy is uncertain enough
right now, and who knows if we're going to see a repeat of fall 2008 again (my
bet is we are). I want to lock in my earnings. Consider pair trading, or
hedging yourself in other ways.

Definitely think long-term, protect your earnings with stop limit orders or
hedging and pair trading. This is the only way to come out ahead of the
market.

~~~
wagerlabs
I think there's money to be made in trading Apple against Nokia, RIMM, etc.
This just needs a LOT of research. I agree with the rest.

I'm not planning to use more than 25-30K if I trade and 0.5-1% of that on
every trade. Proper money management and risk controls are key.

~~~
_delirium
It's not impossible, but pairs trading is something a lot of full-time
analysts research, and hedge funds put a lot of money into it, so you're going
to have to have either luck or some kind of unique insight to find pairs
trades where there are significant unexploited arbitrage opportunities left.

------
0nly1ife
It sounds like you made 100k from contracting in six months. If that is the
case, the fastest way to a million is to continue contracting.

------
rajatmehta1
From what you have written, it seems like you are a hard core programmer.If
you like programming then shifting to some other profession to earn more money
, might not help much as you will always have the craving to sit on your
computer and create code. Trading is good but risky, i would suggest not to
risk all your hard earned money there though you might allocate a smaller
portion for this. Since you mentioned you take only those projects that you
are interested in that means you do get more offers, start a consulting
business and give the other projects that you are not interested in to other
folks that you hire and earn from their hourly rate.

~~~
wagerlabs
I don't have a craving to sit in front of my computer and create code. I have
a craving to learn things, get to the bottom of things, solve tough
challenges.

I also like selling. I spent a year as a commission-only sales person, selling
trading software over the internet. I think I did reasonably well and I
enjoyed it tremendously.

I did notice that I missed the technical challenge, though.

------
andymoe
Looks like your trading experiments have not worked out so well. Probably
because you seem to be a fan of market timing... good luck with that. I think
you need to take a longer term view with your investments. I also think your
friend is right - you should bet on yourself. I worked in the financial
services industry and I know first hand how horrible 90pct of the software is
in that space. It's a market full of poor quality or outdated software with
roots in the 80s and I think it's ripe for a shakeup if you can figure out how
to break in and sell.

~~~
wagerlabs
I left Wall St with the semi-official title of "Director of Prime Brokerage
Technology". I did work on the technology budget and spoke to vendors. I
simply don't have the organization required to service Wall St.

------
marze
Continue contracting. Sell the BMW and buy a 2000 Camry.

Take 60% of the 100k and invest in Apple, the rest in a selection of index
funds. Reevaluate Apple in four years. Invest 15% of your ongoing contracting
gross income the same way.

Pick some 'just for fun' iOS apps and write them in your spare time.
Brainstorm for app ideas weekly, and other low-capital ideas. If one shows
promise, partner with some other developers and put more time into it. Only
invest cash you can afford as long as it doesn't get in the way of continuing
the 15% long term investing.

~~~
lionhearted
> Take 60% of the 100k and invest in Apple

Quite possibly at the top of the market right now. Or maybe not. But if you're
good enough to run the analysis on the market for smartphones and high end
consumer electronics to be reasonably sure Apple is a good buy right now, then
you're good enough to find better buys. Maybe some of Apple's suppliers or
manufacturers, for instance - I don't know personally, I don't have the skills
to evaluate on those things. But I do know buying a stock just because it's
cool, fashionable, and has gone up a lot recently is a pretty good way to lose
your shirt.

~~~
marze
Time will tell.

------
kadavy
Blog about your quest to turn 100k into 1 million. Lots of people will read
it, the advertising potential would be strong, and - if you're successful -
you could write a book about it.

~~~
wagerlabs
Thanks! I think it stands to have more success than the Erlang book I never
finished :D.

------
mkramlich
Trading sounds like a very risky way to try to grow the $100k you worked so
hard for, esp considering you have a wife and kids. My best non-expert advice
would be to try starting a profitable small business that leverages all your
strongest skills and passions, and that can evolve into a passive income
stream. That stream plus possibly more contract/wage work over the next 5-10
years could take you to $1 million. Take this with grain of salt.

------
grandalf
1) take $50K to a casino 2) buy a color on the roulette wheel 3) set up a bet
that has some fun characteristics ... maybe a 10% chance of paying 1m and a
30% chance of losing entirely (with some variety in the middle).

Let the wheel spin and enjoy the adrenaline. Worst case you go back to your
lucrative consulting gig. Consider that you already paid the amount you lost
in taxes and you don't even miss it.

~~~
wagerlabs
I don't pay taxes. Mine is an offshore company and I'm not yet a resident of
Spain. I hope to start paying about 20% in taxes by the end of this year, I'm
sick and tired of being an illegal alien.

------
pier0
Considering that you already built a poker product and some trading programs
and that betting on fantasy sports will be the next major thing and there is
no industry leader yet, I would probably look into creating a fantasy sport
product with a trading component in it.

Something that you can sell to media operators or gambling sites either as a
standalone product or white label.

Coding and selling.

------
ahk
Given the probability that you will not actually make a million, I think that
this is a false goal that will only lead to frustration. My plan is to utilize
my savings, after having got out of the 10 year rat race, to do something I
enjoy (that also has a fair chance of being big). If it turns out that I make
a million, well and good, if not then atleast I've been enjoying the money
instead of leaving that to after retirement. The rat race is always there if I
feel the need to go back.

Addendum: I also believe pretty much anything you do for the next ten years
has a fair chance of being big. The only problem I see is that you're
constrained by having a family and so might not have 10 years to fritter away
like that.

~~~
wagerlabs
I have a very understanding family and my wife works lightly while she
babysits the younger daughter. I think I can still manage to accomplish
something.

------
kunthar
Create generic game server product for turn based games. Start to sell it with
insane price :D

~~~
wagerlabs
Kunthar, did I give you a quote? ;-)

------
lhorie
You could move to Argentina. EUR $100k = ARS $480k

[http://www.google.ca/search?hl=en&q=eur+ars++exchange+ra...](http://www.google.ca/search?hl=en&q=eur+ars++exchange+rate&aq=f&aqi=g1&aql=&oq=&gs_rfai=)

------
HeyLaughingBoy
If you were in the US, I'd suggest real estate. At this point in the real
estate cycle, you could probably buy two single homes, or a duplex/triplex and
rent it out and have positive cashflow immediately. I used to be a landlord,
but sold the house and I sometimes regret that decision since it was bringing
in about $400/month with no work on my part. Rental property isn't a bad
investment if you're willing to do the work and it's easy to sell if the
property is making money.

I don't know what Spain's real estate market is like, but in a touristy
location there are probably opportunities to get creative.

~~~
nearestneighbor
> At this point in the real estate cycle, you could probably buy two single
> homes,

For $100k? Where in the US would that be?

~~~
HeyLaughingBoy
Not for cash: well, you probably could buy two condos for cash, but that's not
what I meant.

I meant in terms of down payment. Even here, (rural Minnesota outside the Twin
Cities), people want to rent. A house around here with 20 acres of land can be
had for less than $300k. Houses in town on 1/2 acre can be found for under
$200k, and this is in a pleasant small town. There are many people who for one
reason or another can't afford their own home, and make great tenants. My
favorite was the guy who paid cash, _months in advance_ because he traveled a
lot and "didn't want to be late."

------
jayruy
Doing event-driven trading isolated in the Cayman Islands without any sort of
insider connections is a recipe for failure.

There are lots of high-frequency trading shops that could put your engineering
chops to work, most of the shops are small enough that I'm sure they'd be
happy to offer you some form of partnership with your spare cash. HFT
strategies have very definite limits on lifespan and investment cap, but tend
to produce out sized returns (yes, 10x).

Most of the big shops are in Chicago. Start with Jane St:
<http://www.janestcapital.com/>

------
captaincrunch
Before you can turn 100k into a million... First attempt to turn 100 into
$1000

------
mynameishere
_Then AOL ran out of capacity and I was back to my 700 bucks after paying
about 200 in commission to Bear._

How did you pay 200 dollars in commissions on a 700 dollar trade? How did you
find work at an investment bank without being sufficiently savvy to realize
that buying options on a credit card and then paying a gigantic commission is
an absolute, guaranteed way to lose money over time? I'm genuinely confused
here.

At any rate, the only people profiting on derivatives are the market makers.
And even they blow up eventually. (Example: Bear Stearns).

~~~
arthurdent
_How did you find work at an investment bank without being sufficiently savvy
to realize?_

Is this deliberately intended to be disparaging? 1. There are plenty of people
at investment banks whose principal function isn't to understand options. 2.
What makes it so clear that buying options is a "guaranteed way to lose money
over time".

 _At any rate, the only people profiting on derivatives are the market makers.
And even they blow up eventually._

This is empirically false. There are a lot of people who make money in
derivatives. Vol stat arb funds have performed very well over the last 5
years, dispersion has long been a popular trade.

Bear stearns did not blow out in its marketmaking capacity.

Typically the options traders that are said to "blow up eventually" are
premium sellers, not buyers, which is in direct contradiction to your previous
comment about option buyers being guaranteed to lose money over time.

This is unnecessary and not really in the spirit of providing help to someone
asking for advice.

You either think he's full of BS and are trying to call him out or are just
being rude. I think he sounds sufficiently accomplished and is trying to
understand a new field. Don't discourage that.

edit: had to look up how to properly italicize

~~~
mynameishere
_What makes it so clear that buying options is a "guaranteed way to lose money
over time"._

Derivatives are mathematically zero sum minus costs. That's why. For traders
in aggregate, they are a certain loss. Tack on leverage via credit cards,
well...

 _Is this deliberately intended to be disparaging_

Sort of. The guy needs to realize that he's capable of really stupid mistakes
before he opens that fresh new brokerage account. 700 dollars is obviously
nothing, but should be a valuable lesson, and not an optimistic one.

~~~
wagerlabs
1995 was 15 years ago. I advanced a bit since then.

~~~
mynameishere
_I'm thinking that trading may be my best bet._

 _I traded twice in ... ugh... 15 years or so._

 _I advanced a bit since then._

Yeah right. You might want to put your money in this:

<https://online.citibank.com/US/JRS/pands/detail.do?ID=SvgCDs>

------
bl4k
Learn to play poker and enter the world series, which is getting under way in
a week. Analytical minds do well in poker, especially since most poker players
are degenerate gamblers.

~~~
datapimp
This is a true statement, but don't enter the world series unless you are
already a top notch player. Just play in the 150$ nightly tournaments on
pokerstars and you could expect a 120-150% ROI as a solid player.

~~~
aquateen
Most solid players have an ROI between 0-5%. WSOP is a luckfest even for a
good player.

------
GFischer
If you'd like to flip real estate, you might want to look into investing in
Uruguay (South America), or another reasonably lawful third world country
(Costa Rica?) where 100K Euros might get you somewhat far (taxes are the
killer here, though).

However, building over here is better investment than flipping. You'd need a
reliable partner or heavy hands-on overseeing, and I'm not him :P

I also agree with other posters that you stick to your strengths, and research
VERY carefully. Edit: sailing over here is quite nice :)

------
StrawberryFrog
Certain, Quick, Legal. Pick any two.

------
sr3d
Hi wagerlab,

If your burn rate is 3.5K/month, with $100K, you can survive for at least 28
months comfortably, give or take. That's 2.5 years of not working for money.
If you're already an amazing programmer, go build a product and sell it at
$100/license. You only need 10,000 copies to make $1,000,000, and burn through
just a fraction of your money. You can probably build something in less than 6
months and start building a real business around it. With proper SEO,
marketing, perseverance, and some luck, the chance of you reaching the sales
number isn't all that bad, providing that your product is compelling enough
for users to fork out $100. As you say, your weakness is you can get bored
easily, then find a way to keep yourself interested: find a partner, outsource
boring stuff elsewhere, and plainly just make it a goal to build a meaningful
business for yourself and for your family.

Nothing is more profitable than investing in yourself. You can double up your
money is no time at all. Instead of solving really hard technical problems
just for the fun of it, try solving people's problems and make a tidy profit
along the way. There are tons of ideas and problems worth solving. You will be
much more wealthier in a short time, and you can have your ego petted as well.

Personally I quit my job last year to work on my own startup. I was making
$90,000/year and was billing $85/hr, but I was getting burned out working on
other people's stuff. So I quit. $85/hr is quite a bit of cash, the money was
addicting. I was 24, single, living cheaply in Chicago. My expense was
$1,500/month, and with some light traveling, that was about $2,000 -
$2,500/month. I was able to save quite a bit in just a few months. After saved
up to $20,000, I quit. I'm not wasting my life working for money. Not when I
have other choices to build up a much better future.

Now I'm actually invest 100% of my time into my startup and I'm building it up
alone by myself. My life is my start up until I get it launch in September,
then I keep on pushing till I make it. Everyday I push out something new,
write some thing amazingly awesome, or just get really productive -- all for
myself.

I'm very easy to get distracted with new ideas and bored with existing ones.
However, I told myself specifically to not think of new ideas, and not to get
bored with my startup. It's been 2 months working non-stop on it, and I feel
more energized than ever. From HTML slicing to server setup, compiling stuff,
to writing the next best UI to solve a problem for user, I'm doing it all. If
my startup doesn't generate money right away, I'll keep pushing it. I don't
know what next year will be like, but I know it will be a lot better. What's
funny is that I don't consider myself a very good programmer. I can get by
with some stuff (like JavaScript). I can barely programming Ruby on Rails the
right way, none of that C++ hardcore programming. I secretly envy those C++/C
guys that can hammer out code that looks really hard, but I don't care. I'm
building my own product and I feel good about it. My life has a meaning,
instead of just working for money.

The best thing is, if nothing happens (very unlikely), I can still get back to
consulting, making a nice 6-figure salary, and execute my plan B of become a
millionaire: investing in real estate.

My plan B is simple. I plan to purchase 1 rental apartment every year. Where I
lived in Chicago, you can get an apartment for $60K - $80K (foreclosures), and
rent them out at $900/month, positive cashflow on day one. I can purchase one
a year if I save 50% of my income (not a hard thing), and repeat this a few
years. If I leverage the home equity of the rental properties, I can reduce
the time to about 6 to 7 years before hitting the $1,000,000 net-worth. And
these properties can only appreciate in values, since they are already really
low in price. I WILL be a millionaire before 40 and I don't even have to
think. However, I chose to be a millionaire by 30, so I quit my job because
obviously my job won't get me to where I want to be when I'm 30. I don't think
I can get a salary of $333,333/year for the next 3 years to make $1M. And if I
really have that salary, I'd just quit to do my own thing. If I'm that good,
then why I'm not investing in myself rather than working a 9-5 (or in this
case, a 6am-12am job since you'd better be worth every penny at
$333,333/year)?

So there you go, it's my plan of turning an amount much less than $100K into
$1,000.000. Precisely, I have $2,500 (I traveled quite a bit and invested some
money in Vietnam with my family between the time I quit and when I started
fulltiming on my Startup) in my bank account and I hope that will last till
September, which shouldn't be a problem since my burn rate right now is about
a whopping $400/month, if not less. I'm single still, and will be suspending
my iPhone very soon to switch to Skype. When I run out of money, I'm sure I'll
figure something out.

So I hope you'll have an updated post in a year telling us here about your
journey to make $1,000,000. Good luck following your heart and passion.

Alex

~~~
wagerlabs
Thank you Alex, that was inspirational!

------
samt
Go to law/medical/dental school and in about 10 years open your own practice.
Anything else is a lottery and you should be playing for the fun of it, not to
make money.

~~~
eli
And school isn't a lotto? You know many happily employed recent law school
grads these days? Or many young doctors who are confident they'll retire rich?

~~~
WestCoastJustin
School can be a lotto if you get a degree in aboriginal affairs or something
similarly obscure.

Becoming a md/lawyer/dentist is a pretty sure thing. At least where I live
(Canada) these professions are in demand. You can always move to smaller
communities if needed.

I think the parent comment was pretty good advice.

~~~
eli
Maybe things are different in Canada, but it sounds like pretty terrible
advice to me. Starting out your career with six figures of debt in a bad
economy?

I really feel very strongly that you should ONLY be a doctor, lawyer, or
dentist if you genuinely like doctoring, lawyering, or dentistry. It ain't a
get rich quick scheme.

------
known
You may invest in
[http://www.google.com/finance?client=ob&q=MUTF:FNMIX](http://www.google.com/finance?client=ob&q=MUTF:FNMIX)

------
known
You may develop a HFT platform and sell it off to HNIs.

------
gte910h
I suggest you stay with what you know, (software) and do not try more
investing in stocks and equities

------
grandalf
Here's an idea. There is an instrument called a "straddle option" that is
essentially a bet on volatility. I think it'd be interesting to try to
formulate a strategy that made aggressive purchases of these around various
product announcements.

edit: Perhaps this wasn't the wisest comment ever, but not sure why it was
modded down.

~~~
wagerlabs
I tried buying strangles and stradles a few times, up to a few small bets
($40-50) at a time. There's a substantial difference on whether the earnings
announcements are after hours in the evening or in the morning, for example.

I think I would have made money with a trailing stop but Thinkorswim did not
have trailing stops at the time. The problem, of course, is the volatility
drop-off right after earnings announcements. You also need to evaluate what
the company is doing and see if there's a good chance the stock will move.

I found <http://www.theflyonthewall.com> to be excellent for research.

The volatility drop-offs doesn't happen right away after the earnings
announcements, at least that's what I noticed. There's still a bit of time
(minutes?) where traders are slugging it out.

It's virtually impossible to monitor several positions for volatility drop-
offs on Thinkorswim, though. ZenFire is available on the Mac but ZenFire
equities and options are only available through a couple of brokerages where a
large account is required. Contrast with futures (and options on futures) that
I can get over ZenFire through my Mirus/Dorman account for a $500 deposit.

------
ivankirigin
Buy stock in SecondMarket for companies that are likely to IPO: LinkedIn,
Zynga, etc

------
Mark_B
Add another zero to the end?

~~~
rbanffy
Funny how people downvoted you for coming up with the obvious answer...

------
switch
your wise friend is right.

bet on yourself. expand your work team into a multi-person team.

------
mkramlich
multiply it by 10

~~~
arthurdent
this sounds like the most surefire way to achieve your goals.

seconded.

------
ahoyhere
Build products that are low-maintenance, but provide lots of value to a market
that has pain/understands the concept of paying for value.

We didn't start out with 100K euros, more like 30K USD, but my SaaS, developed
part time, grew 5x in revenue year over year and that was not with a lot of
effort - if we do that again, it'll be earning nearly $600K/yr by June 2011.

So far "we" is me and my husband, part time, plus a summer intern and the
occasional freelancer. So it's a pretty good place to be, cost-wise.

------
shareme
Let me ask you a question, given your experience which is easier to bet on
..yourself or someone else?

~~~
wagerlabs
I used to run an offshore development company out of the US and even went
through a round of VC at ~1.25mm post-money. The round did not go past a
bridge loan since the internet bubble was bursting at about this time.

I can judge technical skills but I don't think I'm a good judge of character.
I'd rather bet on myself.

