Millionaire to Billionaire?

Many people are under the mistaken notion that those who have created great wealth investing are rich in the first place. Nothing can be far from truth.

My Master, Warren Buffett literally started from scratch and has risen to what he is today through a long journey of prudent investment.

Anyone, literally anyone - from a pizza delivery boy to gas station attendant - with humble means can become rich and build lasting wealth, if they can start young - say at 18 or 20 years.

Really, there are only two essential ingredients to wealth creation - discipline and very long time - 20 to 50 years.

First lets understand what discipline means - It means financial discipline comprising two elements:

Don't blow your hard earned salary on luxuries - branded clothes, expensive eating out, bars, gifts and girlfriends! Keep your needs simple.
The moment you receive your pay check, invest first and spend what is left. You invest first and learn to live within the balance and not the other way round - spend first, and save what remains.

Next, and the hardest part, is simply let the investment be. You have to give your investment a chance to multiply. We have to let the miracle of compounding to work. Why I say this is the hardest part is our nature. Having evolved from the proverbial monkeys, human mind can not be quiet even for a moment. If the market falls we get nervous and think of selling the investment. If the market rises, again we think of booking the profit. Who knows, if I don't sell now, I may miss the bus for ever. Thus human mind does not let the investment to grow, resulting in premature harvesting of the crop.

I present here what any humble wage earner can create a significant wealth by starting at the age of 20, over fifty years, with a humble monthly investment of Rs.1000 (US$ 15). I have assumed longterm stock market returns at 15% per annum (based on Indian market performance) and annual inflation at 10% per annum.