Eight doubles starting with $5,000 and you are above One Million Dollars.
That does not consider taxes, so a tax sheltered account is best.
Personally, in a state of desperation in 1990 – the Gulf War was about to begin. I was making my living on commission income. Everyone in the country was frozen emotionally and financially, waiting for the war to start. There were no commissions. With a wife and three children to support, this plan of Double – Double to create One Million$ came to my mind. Since working this plan in the 1990’s, I have heard Patrick Ben-David discuss using the same method.
I have also heard Gold and Silver speculators; Rick Rule & Eric Sprott also use the methodology in some way, in their activity. The motivational book – Think and Grow Rich, by Napolean Hill was very helpful in understanding the human process. Stan Weinstein’s book, Secrets for Profiting in Bull and Bear Markets, simplified the process.
The Goal: $10,000 to One Million$
The Plan: Compounding Doubles, 7 doubles on $10,000
The Timeline: One double a year – Seven Doubles over seven years.
Execute the Plan!
The numbers above are the road map to understand the beginning and where we want to be.
In practice, It is most efficient to sell half the position on the first double and let the remaining shares run as high as you can. Use a stop loss tactic. Different versions of harvesting profits also works. The idea is to create a mechanical process rather than a working with a would’a, should’a or could’a process. Knowing when to buy and when to sell for a new position is key. The more non-thinking, mechanical you can make the system the easier you will sleep.
What is easy in this Plan?
- We can all conceptualize doubling our money seven or eight times. It is within our mental grasp to understand, so it is a believable goal. Write down the numbers in the doubling process to see what a penny doubled each day for thirty days amounts to. This helps make it real and possible.
- We can all find or look and see a $5.00 stock that goes to $10.00 each year – there are many. In fact, most stock’s annual trading range is greater than 100%. Therefore, it is very believable that a stock can go up 100% in a year. Do the research to prove to yourself – it is part of the believing that it can be done.
What is hard about this Plan?
- You need a system and the discipline and focus to follow through on the plan. Ideally a profiling system the gives you a probability edge. Identifying the profile of a stock that can double in twelve-months to eighteen month period with a catalyst that makes it happen. This is easier to do in smaller companies because there are not as many analysts looking over the company. It gives you an “edge” if you know what you are looking for. The danger in doing this with small companies, is that it might work – you might have done everything correct, but no one cares. The price does not attract buyers. Therefore, we include large cap companies in a transition period and who return to being accumulated by institutions.
EXAMPLE: Advance Micro Device (AMD), was less than $2.00 a share in September of 2016. A company in transition, on October 3, 2020, AMD was $81.80 per share, a 40-fold increase.
$5,000 invested into 2500 shares in 2017 is worth $400,000 today. We still have three years left on our eight-year plan (one double a year – eight doubles) to one million$ for the getting a little more than one more last double. This last double does not need to be in AMD. In fact, I would look for a less elevated company for greater value, less risk, and lower volatility. This example is shared with you so you can, “believe” that taking $5,000 to a large number is possible. The challenge is not, “can it be done”? This challenge is identifying the profile that produces that upside potential and having the focus, desire, belief and determination to succeed. Knowing when to buy and when to sell for a new position is key.
- Overcome the natural “fear” of buying, when the stock is out of favor, and everyone is saying how bad this company is or how bad the industry is as an investment is, at this time of action. Have confidence in what you are doing.
Of course, – do the research to understand why and when this will change is critical – that’s Knowledge. In time, you will gain experience and with knowledge and experience you gain wisdom. - The other mental “fear” is in putting all the money into one or two stocks for that last double. For me, the trick for success is always thinking that I am working with the original investment.
- Numbers: What is easy is the simplicity of small numbers at the beginning. Seven doubles is easy to believe. $5.00 to $10.00, a double is easy to believe. We can all count to seven or eight. Buying a five-dollar stock – easy to do and believe. You can see charts where stocks do it all time. Again, all small numbers. Success will change this. In the first half, you work on mastering the game of doubling. In the second half of this game – the last four doubles, you master the personal growth challenge. This second half is now about your fear of loss, anxiety and in your willingness to receive. Not doubting the process “just because” the numbers get large and the fear of losing what you have, is great. “Fear of Big Numbers”, will enter in the second half of our challenge of making a million$. How would $500,000 in cash today change your life? Do you want to risk what you have made to get to one million$? What is easy in the first double or two, will become much more challenging – mentally – when we are “risking” $650,000 – 130,000 shares in a $5.00 stock for that last double.
- Tactical process evolves with change. Buying and selling 130,000 shares in a five-dollar stock might require a different “tactic” than buying 1,000 shares of a $5.00 stock. Different factors enter into the game… It is easier if you think of this as a game – the money is not real. The only thing real is the amount you started with, be it $1,000 (ten doubles) – $5,000 (eight doubles) or $10,000, (seven doubles).
This is the Greatest Personal Growth Game you can accept. Why? Because you have to grow, learn about yourself and change with the process of succeeding. It is grounded in reality but requires you to know and understand yourself completely. It can change your life mentally and financially.
Coaching & Training is available – but not investment advice. We are not registered investment advisors. We are Journalists, Educators, Coaches and Cheerleaders for you! Email if we can be of assistance! It really helps to have a Sounding Board or Coach in the process.
