When I was 23 I got lucky, very lucky. I went fortune hunting and ended up making a lot of money. A $3,000 investment turned into $155,000 in two months.
The stock was VCSY, a Chinese internet company with a homepage consisting of a simple dial pad.
I had no idea what the company did except for the fact that Internet + China in December 1999 sounded like a fantastic idea during one of the greatest bubbles of our times.
VCSY went from around $3 to $6, did an inexplicable 20-for-1 stock split and then went up to around $9. In other words, it went from $3 to $180 pre-split and I had 1,000 shares.
The stock’s move was one of the most ridiculous things I’ve ever seen as everybody I knew on the Street started piling into the name. I eventually got out of the stock at around $155 a share, netting a cool $155,000.
Blowing The Fortune On Stuff
I proceeded to do what every foolish 23-year-old would do and blow it on things! I bought a 600cc racing bike along with a second hand Volvo 850 GLT. At least I didn’t go out and buy a pound of cocaine.
The safety of the Volvo was a way to balance out the risk of death during wheely popping attempts on FDR drive at 100mph. With both vehicles came insurance payments and a $300 a month parking bill. Yes, even back in 2000 parking was that expensive in lower Manhattan.
Come to think of it, my biggest regret wasn’t actually spending $25,000 on goodies after the financial windfall. My biggest regret was not investing MORE into VCSY! I could have put in up to $20,000 worth in the name because I just received my first stub bonus after starting work in the summer of 1999.
Meanwhile, the ritual of saving more of my after-tax paycheck had begun. Getting into work before 5:30am and regularly leaving after 7:30pm didn’t seem sustainable long term.
Unfortunately, I was too chicken shit to dump everything into VCSY. If I did, the $20,000 could have turned into a cool million! Sob. So close, yet so far from being able to make it rain.
Ever since the spring of 2000, I’ve regretted not taking more risk. I swore to swing for the fences more often with the new found capital. Instead of fulfilling my oath, I decided to cower in the corner like a scared child in the night because the internet bubble began to burst in March 2000.
After a couple $10,000+ down days thanks to reinvestments in B2B stocks like Ariba Technologies I bid the stock market casino sayonara! The one year of confusing brains with a bull market was over.
Goodbye Speculative Stocks, Hello Career
Instead of spending all my time researching the next VCSY, I decided to spend the majority of waking hours on work.
Truth be told, a large part of the reason why I stayed until 7:30pm was for the free dinner buffets! No wonder I gained the freshman 15 all over again.
With friends getting fired left and right between 2001-2003, the best way to cope with a downturn was to keep my head down and be the best employee possible. Even after the markets started recovering, I still largely ignored investing in the markets.
Instead, I maxed out my 401(k) and began the allocation process of investing 35 cents of every post tax dollar into various funds in my after tax brokerage account while praying there would be no more collapse.
The other 30 cents was invested in CDs to ensure capital preservation while the remaining 35 cents just sat in a money market account waiting to be deployed into real estate, my favorite asset class.
It is funny looking back as a 44-year-old in 2021. But I knew that the VCSY money was funny money.
I had gotten lucky and there was this very strong desire to try and convert some of that luck into something lasting. As a result, I proceeded to invest the majority of my income into San Francisco real estate from 2003 onward.
So Many Missed Fortune Hunting Opportunities
Although investing in San Francisco real estate worked out well, I missed out on so many greater stock opportunities. I stopped fortune hunting because my education and career got in the way.
Since 2001 a lot of money making opportunities presented themselves in the markets.
Google went public and became a 10 bagger. Amazon and Priceline came back from the dead to be gorillas in their space. Netflix became one of the best growth stories. Heck, Reed Hastings, the founder and current CEO spoke at my Berkeley MBA commencement ceremony in 2006 when the stock was under $15/share!
Meanwhile, the homebuilders and financials got crushed while gold roared higher. I basically missed out on making outsized gains in everything because I was so concentrated on my career.
Although I received promotions and raises as anybody who works for 11 consecutive years at one firm would, I’m not sure whether I maximized my wealth creation.
I was too scared to take any more concentrated positions because of all the financial casualties that began piling up. Several colleagues admitted to having their entire net worths invested during the 2000-2003 downturn. It was deja vu all over again in 2008-2009.
The last thing I wanted was to get no bonus, get fired, have my deferred stock lose value, and invest more money into a never ending market correction.
Lesson: Don’t just focus on making active income through your career. Set aside some time every week to think about investment opportunities. These investment opportunities could help accelerate your wealth creation potential. Fortune hunting requires focus.
There’s Always A Bull Market Somewhere
I know a lot of you think I’m crazy for whipping around my rollover IRA as if it were play money. But I’ve got to tell you that I frequently remember back to the years 1999-2000 where I didn’t have the courage to go all-in.
Taking on risk gets even harder the older you get. Your 20s and 30s are a time to take aggressive, calculated bets.You’ve got a lifetime to make up for your mistakes. Who knows? You just might hit it big as well.
In July 2021, my rollover IRA finally hit the $1 million mark thanks to individual bets in names like Apple, Amazon, and Netflix. If I didn’t fortune hunt, there’s no way my rollover IRA would have gotten tot his level.
And just to note, the Fixed Income percentage below is misleading. Almost the entire $420,359 position is in equity structured notes that is classified as Fixed Income.
Given I no longer have a day job, I’ve got more hours a day to search for unicorns.
The rollover IRA is the perfect vehicle to trade because it’s sheltered from the IRS until withdrawals are made. I don’t have to reconcile my trades every year during tax time any more and no longer does an employer see every ticket.
The chances are slim I will ever find another 50 bagger in public equity. However, that doesn’t mean I’ll stop searching. What I do know is that if I do not put any effort, I will never make anything beyond the average index performance.
A great investor is always trying to connect the dots. There are opportunities to make money every day in the stock market, real estate market, and any market, frankly. As a result, I’m also investing in private funds managed by experienced investors who fortune hunt for me. I’m happy to pay a fee for these guys to be stewards of my capital.
Never Stop Fortune Hunting
From now on I plan to re-dedicate my fortune hunting efforts. I’ve invested $810,000 in real estate crowdfunding since 2016 to take advantage of lower valuations and higher net rental yields in the heartland of America.
I believe there will be a multi-decade shift away from expensive coastal city real estate due to technology and remote work. Check out Fundrise, the #1 real estate crowdfunding platform today. It’s free to sign up and explore.
I’m bullish on the housing market for the next several years. Interest rates will likely stay low and the government will likely stay accommodative. With corporate earnings rebounding, real estate is going to be one of the main beneficiaries.
Also check out CrowdStreet, a fantastic real estate investing platform that focuses on opportunities in 18-hour cities. 18-hour cities are growing faster due to positive demographic shifts. Further, valuations are lower and cap rates are higher.
Starting in 2016, I’ve personally invested $810,000 in 18 different real estate crowdfunding projects across the country. It’s my way of fortune hunting with a good amount of capital. Now, every year, I’m earning roughly $80,000 a year passively from my real estate crowdfunded investments.
I suggest setting aside between 10% – 20% of your investable assets to fortune hunt as well. Start small and slowly work your way up. You will definitely lose or underperform on some of your investments. But you might also hit it very big as well.
If you keep on fortune hunting, you may eventually find your unicorn. Just make sure to only invest what you can afford to lose.
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About The Author
Sam began investing his own money ever since he opened a Charles Schwab brokerage account online in 1995. Sam loved investing so much that he decided to make a career out of investing by spending the next 13 years after college working at Goldman Sachs and Credit Suisse Group. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate.
In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $300,000 a year in passive income. He spends time playing tennis, hanging out with family, fortune hunting, and writing online to help others achieve financial freedom. For more nuanced content, join 50,000+ others and sign up for his free newsletter. Don’t Stop Fortune Hunting is a FS original post.