Succeed in Stocks Even if you Don't Know Where to Start

How an Illiterate 18-Year-Old McDonald’s Cook Becomes a Millionaire in 50 Years
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  • Basic reading and Arithmetic.


I recently interviewed one of the three most famous value investors in the world.  The first two are Warren Buffett and Charlie Munger. 

Mohnish Pabrai draws wisdom from both.  He describes a librarian who died with an estate of $4 million.  The librarian donated it to the University of New Hampshire (UNH) in 2015 according to CNBC. 

Mohnish explains that any normal eighteen-year-old with very few skills who can only get a minimum wage job can make it.

The young McDonald’s worker earns minimum wage of $15,000 for 2,000 hours of work per year. He can save ten percent because he is living at home and contributing 90% to the household budget.

 The young man sets aside ten percent of $15,000 before taxes each year. The 18-year-old saves $1,500 each year into a Roth (after taxes) or employer sponsored IRA (before taxes).

This is a conservative example. The young man (for ease of example) does not get a boost from employer matching if he saves in an employer sponsored 401(k). This would allow him to save much more

He earns 9% on a simple investment choice.  His income rises modestly with inflation.  For instance, if inflation is 2% this year he will save $1,530 in the next

When he retires 50 years from now at the age of 68 he will have saved $75,000 over the years from his salary.

At 9%, the account doubles every 8 years as per the rule of 72.  The approximate time to double an account is the number 72 divided by the rate of return on the investment. 

How Much Does $75,000 of Drip Savings Grow at 9% in 50 Years? Answer: $1,332,662

Bankrate website has a calculator that shows that this scenario will produce a retirement account for the unskilled, minimum wage 18-year-old of $1,332,662.

Is this reasonable?

The most respected textbook on investments is “Essentials of Investments” by professors Bodie, Kane and Marcus.  The chapter on portfolio theory reports that a portfolio of small U.S. stocks returned 11.80%, large U.S. stocks returned 9.62%, and world stocks 9.21%. 

These are the geometric mean returns that investors enjoyed from 1920 to 2010 in the stock market.

A simple exchange traded fund such as the Diamond — SPDR Dow Jones Industrial Average (DIA) would have allowed this unskilled 18-year-old to capture a large stock return of 9.62% over that period. 

The financial success of this 18-year-old comes from the power of compounding over a long time.  The Pabrai fund has generated average returns of about 15%. 

This higher return would generate a $12,450,561 portfolio for the eighteen-year-old.  A difference of just over 5% produces a fortune nearly ten times greater! 

-Doc Brown 

P.S. Enroll in this essential community on stock investing now. 

Who this course is for:

  • All saving heads of households should take this course.


Major State University Finance Professor, Investments Expert
Scott Brown
  • 3.9 Instructor Rating
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Dr. Brown is a cutting edge academic researcher in stock investing, corporate bonds, and future trading as a professor of finance of the AACSB Accredited Graduate School of Business of the University of Puerto Rico. His PhD is in finance from the University of South Carolina. He also holds a masters from the Thunderbird Graduate School of Management; routinely ranked number one In U.S. News & World Reports. Pick up Dr. Brown's best-selling investment books on Amazon.  Favorites include The Worry Free Wealth Guide to Stock Market Investing, and How to Succeed at Lotto Even If You Don’t Know Where to Start!

Here is a sample of what his students say, "There is no one like you that He know of who is this transparent, that is what makes your service and education so valuable. Please keep on." -L.B. A Washington State Stock Investor

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