One Thousand Ways to Make $1000 is a 1936 non-fiction book of personal finance by Frances Minaker.[1] It gives specific examples of individuals who made enough money to start their own businesses by starting with as little as $5, and it encourages the reader to do the same.[2]
The book inspired billionaire investor Warren Buffett to start earning money at the age of seven.[3]
References[edit]
- ^Swan, Addie May (September 26, 1936). 'Book Reviews: Popular Books'. The Daily Times. Davenport, Iowa. p. 3. Retrieved July 7, 2017 – via Newspapers.com. (Registration required (help)).Cite uses deprecated parameter
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(help) - ^'Lines From The Library'. The Eugene Guard. Eugene, Oregon. August 18, 1940. p. 11. Retrieved July 7, 2017 – via Newspapers.com. (Registration required (help)).Cite uses deprecated parameter
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(help) - ^Levere, Jane (January 30, 2017). 'New HBO Documentary On Warren Buffett Uses Family Photos, Home Movies To Reveal His Life Story'. Forbes. Retrieved July 7, 2017.
A voracious reader his entire life, at age seven he read a book he borrowed from the library, One Thousand Ways to Make $1000, and, inspired by its lessons, began selling Coca-Cola, gum and newspapers.
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One Thousand Ways To Make 1000
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What better way is there to learn something than from an expert in the field? And when it comes to investing, what better investor is there to learn from than Berkshire Hathaway's (NYSE:BRK-B) Warren Buffett?
But of course, you may be wondering: How did he get so good in the first place?
Of mentors and men
Most people -- OK, most investing geeks -- know that Buffett was an ardent devotee of deep value investor Benjamin Graham, who taught him to look for dollar bills selling for $0.50. (Here are some of today's bargain stocks.) Buffett's investing later evolved through his association with Charlie Munger, and now he prefers a great company at a good price over a good company at a great price.
Most people -- OK, most investing geeks -- know that Buffett was an ardent devotee of deep value investor Benjamin Graham, who taught him to look for dollar bills selling for $0.50. (Here are some of today's bargain stocks.) Buffett's investing later evolved through his association with Charlie Munger, and now he prefers a great company at a good price over a good company at a great price.
But before all of that, when he was still quite young, he learned some fundamental lessons of his investing life through a book titled A Thousand Ways to Make $1,000.
Multiply, multiply, multiply
That book gave Buffett his legendary appreciation for compounding -- the way time and investment combine to make money multiply.
That book gave Buffett his legendary appreciation for compounding -- the way time and investment combine to make money multiply.
Check out how $1,000 will grow over long periods, at the market's historic average growth rate of 10%:
1000 Ways To Make 1000 Book
Period | Result |
---|---|
10 years | $2,600 |
20 years | $6,700 |
30 years | $17,400 |
40 years | $45,300 |
50 years | $117,400 |
60 years | $304,500 |
70 years | $789,700 |
That 10% return, over 70 years, really adds up. It's what you might average even through periods like our current recession, when there are still good moves to make in the market.
Investing matters.
1000 Ways To Make 1000 Dollars
Start yesterday
The authors of A Thousand Ways to Make $1,000 also urged readers to not put off making money -- because the annualized return is only one piece of the puzzle. How long the money has to compound is the other.
The authors of A Thousand Ways to Make $1,000 also urged readers to not put off making money -- because the annualized return is only one piece of the puzzle. How long the money has to compound is the other.
Just look at that table again. The same $1,000 compounding for 60 years will add up to less than half of that amount if it compounds for 70 years. Just 10 more years delivers nearly $500,000 more!
If you start investing early, it can be hard to not end up rich. Buffett was a preteen when he read about compounding -- too bad for us that we often grasp its power when we're in our 30s or 40s, or later.
So what?
Given that you probably are in your 30s or 40s, or later (most investors are), what good does all of this advice do?
Given that you probably are in your 30s or 40s, or later (most investors are), what good does all of this advice do?
If you're 10 or 20 or 30 years from retirement and just now starting to invest, you might not end up with millions. But that doesn't mean you shouldn't start now. Even if you just invest in a broad-market index fund and earn the historical average of 10% per year, that rate of return will turn a nest egg of $100,000 into more than $670,000 in 20 years. If you add money every year, the figure will become much, much greater.
1000 Ways To Make 1000 Minaker Pdf Online
And sure, that 10% figure might seem, um, generous given our current economy, but remember that it's an average over many, many years, including those of the Great Depression. When it comes to investing -- and compounding -- you want to think in terms of decades, not years.
Great companies
But how do you get those 10% returns? You can invest in a broad-market index fund, of course. For a chance at market-beating returns, however, you'll need to add some individual companies to your mix.
But how do you get those 10% returns? You can invest in a broad-market index fund, of course. For a chance at market-beating returns, however, you'll need to add some individual companies to your mix.
Buffett looks for companies generating growing streams of money. You can screen for that to get a list of companies worthy of further research.
Here are some large-cap possibilities I got when I screened for companies with returns on equity (ROE) of 15% or more, a price-to-earnings (P/E) ratio of 20 or less, and four- or five-star ratings in our CAPS community -- all indications that a company is worth a second glance.
Company | CAPS Stars | Return on Equity | P/E ratio |
---|---|---|---|
UnitedHealth | **** | 16% | 10 |
ExxonMobil | **** | 29% | 11 |
Philip Morris International | ***** | 100% | 14 |
Johnson & Johnson | ***** | 28% | 13 |
Halliburton | **** | 16% | 19 |
Rio Tinto | **** | 18% | 11 |
Arcelor Mittal | ***** | 17% | 8 |
PepsiCo | ***** | 36% | 17 |
Data: CAPS, Fool.com.
Good prices
You really don't need 1,000 ways to make $1,000. Time and compounding working together are plenty, and are the foundations of Buffett's investing prowess.
You really don't need 1,000 ways to make $1,000. Time and compounding working together are plenty, and are the foundations of Buffett's investing prowess.
Still, remember that it's also important to buy great companies at good prices. That's what we look for at Motley Fool Inside Value. Like Buffett, we're on the hunt for dollar bills selling for $0.50 -- and our current depressed market is offering a lot of bargains these days. You can even take a free, 30-day guest pass and see all of our current and former recommendations. Click here to get started -- there's no obligation to subscribe.
Already subscribe to Inside Value? Log in at the top of this page.
This article was originally published April 17, 2009. It has been updated.
Longtime Fool contributor Selena Maranjian owns shares ofJohnson & Johnson, Berkshire Hathaway, and PepsiCo.UnitedHealth Group and Berkshire Hathaway are Motley Fool Stock Advisor andInside Value picks. Johnson & Johnson and PepsiCo are Income Investor picks. Philip Morris International is a Global Gains selection. The Fool owns shares of UnitedHealth Group and Berkshire Hathaway. The Motley Fool isFools writing for Fools.
Overview
First published in 1936, One Thousand Ways to Make $1000 is the long out-of-print book that Warren Buffett's biographers credit with shaping the legendary investor's business acumen and giving him his trademark appreciation of compound interest. After pulling a copy of One Thousand Ways off a library shelf at age eleven and devouring F.C. Minaker's plucky and practical business advice, Buffett declared that he would be a millionaire by the time he was 35. Written in the immediate, conversational style of Dale Carnegie's How to Win Friends and Influence People, this book is full of inventive ideas on how to make money through excellent salesmanship, hard work, and resourcefulness. While some of the ideas may seem quaint today-goat dairying, manufacturing motor-driven chairs, and renting out billiard tables to local establishments are among the money-making ideas presented- the underlying fundamentals of business explained in these pages remain as solid as they were over seventy years ago. Covering a wide spectrum of topics including investing, marketing, merchandising, sales, customer relations, and raising money for charity, One Thousand Ways to Make $1000 is both a durable, classic business book and a fascinating portrait of determined entrepreneurship in Depression-era America. Every effort has been made to reproduce the content exactly as it was originally presented.