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How You Could Make Your Million Owning Mutual Funds 395

First five years: $10,000 might become $20,000
Next five years: $20,000 might become $40,000
Next five years: $40,000 might become $80,000
Next five years: $80,000 might become $160,000
Next five years: $160,000 might become $320,000
Next five years: $320,000 might become $640,000
Next five years: $640,000 might become $1.28 million!

Suppose you also added $2,000 each year and let it compound as well.
Your total could possibly then come to more than $3 million!

Now, how much more do you think you’d have if you also bought a little
extra during every bear market of 6 to 12 months while the fund was tem-
porarily down 30% or more from its peak?
Nothing’s ever guaranteed in this world, and, yes, there are always taxes.
However, this example is representative of how the better growth funds
have performed over the last 50 years, and what could happen to you if you
plan and invest in mutual funds correctly. Over any 20- to 25-year period,
your growth fund should average two to three times what a savings account
would return. It’s definitely possible.

When Is the Best Time to Buy a Fund?

Anytime is the best time. You’ll never know what the perfect time is, and
waiting will usually result in your paying a higher price. You should focus on
getting started and becoming regular and relentless about building capital
that can compound over the years.

How Many Funds Should You Own?
As time passes, you may discover you’d like to develop an additional long-
term program. If so, do it. In 15 years, you might have hefty amounts in two
or even three funds. However, don’t overdo it. There’s no reason to diversify
broadly in mutual funds. Individuals with multimillion-dollar portfolios
could spread out somewhat further, allowing them to place sums into a
more diverse group of funds. To do this correctly, you need to make some
attempt to own funds with different management styles. For example, you
could divvy up your money among a value-type growth fund, an aggressive
growth fund, a mid- to large-cap growth fund, a small-cap fund, and so on.
Many fund organizations, including Fidelity, Franklin Templeton, American