How to Get Rich in 2020 [3 Jackpot Investments]

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Three lottery ticket investments that could make you rich within a year

I love investing in stocks but the fact is, they won't make you rich. Sure you might be able to grow your investment portfolio to a few hundred grand or even a million over 30 years, but they won't make you rich in the sense most of us think about.

I've got three investment ideas that will do just that. Three high-return investments that can make you rich within a year or less. In fact, I made a 4,000% return on one just two years ago and use the other two regularly to double my money.

By the end of the video, you'll know exactly how to get started in these three investments and how much you can make.

We’re building a massive community on the Let’s Talk Money channel on YouTube. From beating debt to making more money and making your money work for you, we’re creating the financial future you deserve! Join the Let’s Talk Money community and don’t miss a video.

Why Invest in Lottery Ticket Investments?

This is going to be a fun video. We talk a lot about investing and building wealth here on the blog but it’s all that slow-and-steady approach. Even the ‘How to Become a Millionaire’ video last week was about building a business over time and the habits you need to develop to be successful.

This week is going to be different. In this video, I’m going to reveal three investments you can make that could potentially make you rich in 2020. Jackpot investments that, if they pay off, will make you rich in less than a year.

What we aren’t going to talk about are traditional investments like stocks. Like I said, those will make you wealthy but it’s not going to happen overnight. At even a solid 10% annual return on $500 a month invested, it will take 31 years to reach one million dollars.

I’m going to take what I learned working for venture capital firms and as a private wealth manager to show you the ways to get rich fast. Then I’ll reveal three secrets that will help you get there no matter which strategy you choose.

How to Use Futures Investing to Get Rich

Our first few ways to get rich are going to be in leveraged investments. This means investing in something that takes your money farther than just what you put in. Some of these investments will pay 50-to-one on your money and pay off within a month or two.

That means you can potentially start investing with $1,000 dollars, roll it over a few times and be easily into six figures by the end of the year.

The first one here probably has the most potential and that’s trading futures contracts. Futures are financial contracts to buy or sell something at a set date and price, usually in the next month or few months.

Most futures contracts are bought or sold as a way to reduce risk. For example, a farmer might sell October contracts for wheat. The contract sets a price they’ll get months in advance so they don’t have to worry about prices in the meantime. On the other side of that, a food processor like General Mills might buy those contracts so it locks in its price for that corn it needs to make your breakfast of champions.

Futures can also be used for investment. You can buy those contracts for wheat if you expect the price to go up then sell them before the delivery date. But here’s the beauty of futures contracts, you can buy contracts worth hundreds of thousands of dollars for just a few grand.

For example, each single contract for West Texas Intermediate or U.S. crude oil, is for one thousand barrels. Now at the current price around $70 a barrel, that would mean seventy grand per contract to buy or sell depending on what the futures price was.

But you’re only required to deposit about $3,500 for each contract. So you can bet on the price of 3,000 barrels of oil for about ten thousand dollars. That’s about 20-to-1 times your money.

how to get rich with futures investing
How to Get Rich Futures Trading

So let’s do the math here and this is an actual trade I made in 2016 after the price of crude had bottomed in February at around $26 a barrel. By March it was clear that prices had gone too far and were on the rebound so I bought two contracts for $38 a barrel for May delivery. The current or spot price at this point was just under $36 so the market was expecting price to go a little higher but not much.

I put down $7,000 for the three contracts worth $114,000 but this was actually more than I needed to deposit. I could have put down as little as $5,700 for the investment.

Crude prices kept climbing and by May had reached $45 a barrel when I sold my contracts. Remember that each contract is worth 1,000 barrels so the three contracts were now worth $135,000 or a gain of $21,000 from the original price and I had made three-times my investment in two months.

That’s potentially a 4,000% annualized return or 40-times your money but like all the jackpot investments we’ll talk about there’s a huge risk here. If the price had gone the other way, I could have lost my entire investment in a heartbeat.

In fact, I remember one trade in 2012. I was trading gasoline futures and there was an explosion at a Canadian refinery overnight. The price of gasoline spiked like four percent overnight. Since I had shorted the contract, betting the price would go down, then I lost over ten grand on the investment.

There are five types of assets that trade with futures contracts. You can buy or sell energies like oil, gasoline, heating oil, natural gas and ethanol. There are contracts for currencies with the dollar, euro, British pound, Yen and Mexican peso all heavily traded. You can buy or sell contracts on the direction of the stock market. There are contracts on the metals including gold, silver, aluminum and copper. And finally almost any agriculture commodity will have a contract so corn, wheat, soybeans, rice, coffee, cattle, hogs, you name it.

Most online investing platforms will allow you to open a futures account with a broker. There is a lot more than goes into futures trading, determining where you think the price will go and setting up your investments.

A few tips here though. First, always understand the downside and catalysts for the trade to go the wrong way. You also need to set stop orders so if the price goes against you, you don’t lose too much money. It’s also a good idea to trade in a few different types of assets so that if one trade is losing money then maybe the others will support your profits.

Get started investing on Ally Invest, the investing site I use to invest

How to Get Rich with Options Trading

Our next jackpot investment to get rich is through options trading.

Options are contracts to buy or sell stocks but with a very important difference from Futures. Buying an option gives you the right to buy or sell a stock but not the obligation.

So there are two types of options. A call option gives you the right to buy shares while a put option gives you the right to sell shares.

When you buy or sell an option, you’ll see an expiration date which will always be the third Friday of the month, you’ll see a strike price which is the price of the shares for that option and you’ll see the price of the option.

Let’s look at an example to make it easier. We see here that shares of Apple are currently trading just under $204 per share, this is mid-November. Now I’m looking at the January 2020 options so this investment will expire on January 18th in a couple of months.

how to get rich options investing
How to Get Rich Options Investing

I can buy call options at $200 per share which means I can get the right to buy Apple for $200 a share in January, that’s the strike price. Now for the right to do this, I have to pay about $12 a share, that’s called the premium for the option.

So if I pay $12 for the right to buy Apple at $200 in January and the price of the shares goes to $240 by that time what does that mean for me? That option would now worth at least $40 right, because if it was less than $40 someone could just buy the option and then sell the shares immediately for a riskless profit.

So instead of buying the shares, I could just sell the call option for $40 and a return of 233% on my money. Each option contract is for 100 shares so one contract would have cost me $1,200 and I could sell it for $4,000 or a profit of $2,800 for each contract that I bought.

Remember, options come in two types, call and put. So if I thought Apple shares might fall then I could buy a put option which would give me the right to sell shares at a certain price. Going back to the example, I could get the right to sell shares at $200 for $7.59 per share. If the price goes down to under $192.41 by January, that’s $200 minus that price I paid for the right to sell the shares, then I’ll make money.

Options can also be used for protection and this is primarily how I use them. So if I own shares of a company and I’m worried about the price going down over the next few months, I can buy a put option for the right to sell my shares at a certain price. I’ve effectively locked in that price as the lowest I’ll get on the stock even if the market price falls further.

The important thing to remember here is that buying an option gives you the right but not the obligation to buy or sell a stock. So if I buy those call options on Apple and the share price isn’t above $200 in January, I sure as hell am not going to buy them for $200 each. I would just let that option contract expire but I would lose the $12 per share I invested.

Similarly, if I bought put options against a stock I own and the price of the shares didn’t fall then I’d just hold on to the stock. The price I paid for the put options would be gone but they did their job, protecting me from any short-term weakness.

Now the payoff for the Apple options wasn’t huge because that strike price was very close to the actual price, so we weren’t betting on a big move in the shares. Let’s look at another example to see how options can make you rich.

Here we have January options for shares of McDonald’s. I’ve picked McDonald’s because it’s a stock that doesn’t normally see big changes in the share price. That’s important for options trading because it will be built into the price you pay for each contract. If the shares jump around a lot, it will cost more for the right to buy or sell the shares because there’s a higher chance the shares will be much higher or lower by expiration.

using options investing to get rich

Say we’re expecting shares of McDonald’s to absolutely tank by January from trading at about $182 per share right now. Maybe we have a lawyer connection that says Ronald McDonald is being sued for alimony or John Amos has just opened up a McDowell’s down the street from every restaurant.

Either way, the happy meal ain’t so happy.

So we can buy a put option to sell the shares for $145 each and pay just $0.36 or $36 for each contract since an option contract is for 100 shares.

Now if shares of McDonald’s plunge 35% by January to $118 then our put option is worth at least $27 each because we have the right to sell shares for $145. That $36 we put down for each option contract is now worth $2,700 or a 7,400% return.

To trade options, you only have to be approved on your online investing account. That usually requires a minimum of a few thousand in the account but that’s about it.

Like I said, I generally just use options to protect my investments or to make a little more money from them but you can make a lot of money very fast. There are some different options strategies you can use but the idea is you need a strong reason to believe the price is going to rise or fall quickly.

You have millions of other investors looking at each stock and all their expectations for the stock price are built into the options prices so that average market expectation has to be wrong for some reason.

Now in my example above, finding out from your lawyer friend about Ronald’s legal troubles would be insider trading and you’d go to jail but there are a lot of other ways to find why you think a stock should be much higher or lower.

Again, I would suggest having options bets in several stocks to diversify your risks. Stop loss orders can also work here to limit your losses and don’t feel like you have to make an option bet on every stock you think should be higher or lower. Be selective where you place your money.

Can Bitcoin Still Make You Rich?

Our next jackpot investment is the darling of 2017 but hasn’t done much this year, Bitcoin.

Now subscribers of the YouTube channel are going to remember a video I did late last year warning investors about Bitcoin and suggesting bitcoin-related stocks to pick instead. Those stocks are up over 20% since while the price of the crypto-currency plunged more than 54% so it might surprise you that I’m recommending it as a jackpot investment.

There is no doubt that blockchain technology and digital payments hold huge opportunity for the future. These two technologies will touch nearly every sector of the economy and Bitcoin is by far the leader in crypto. This is truly the Bitcoin era.

So while I’m not one of the fans that thought Bitcoin was the next best thing in 2017, it does have solid potential for future growth and it will likely go much higher from the current price.

Now one of my problems with Bitcoin and other crypto currencies was the difficulty in finding some kind of a fair value. Because if you can’t find a reason to say something is worth much more or less than the current price, how can you ever invest in it?

Bitcoin itself is just bytes of data. It’s not backed by any government so there’s no intrinsic value and we’ve seen, it’s not a great store of value either.

But there is actually one way to value Bitcoin.

This comes from a mathematical theory called Metcalfe’s Law and it’s been eerily good at finding a value for companies like Facebook that have a network of users at the center of the business model.

can bitcoin make you rich
How to Value Bitcoin

The idea is that a social network like Facebook or say the network of Bitcoin users creates a value in that trading of information and we see here that shares of Facebook have pretty closely followed the growth of its monthly users.

Metcalfe’s formula for this was the number of users squared and we have estimates for the number of Bitcoin users that range from six million to 13 million. So you would take the square root of each of those estimates to build a lower and an upper band on the fair value. That means between $36 billion to $169 billion market cap on Bitcoin.

Now the current market cap with Bitcoin at $6,500 is $113 million so we could already be around fair value now which is why the price hasn’t fallen much further for most of the year. Of course the lowest estimate there would still mean a price of around $2,000 for Bitcoin so there is the potential for some pain.

I think you can buy some here even though the average fair value is around $5,900 for Bitcoin. Buy more only if the price drops to $3,500 and hold it for an eventual jump higher. There will come a day when everyone has forgotten how crappy Bitcoin was this year and they’ll start buying in again. Bitcoin has gone through four of these bubbles so far and there will be another one someday.

Three Rules for Investing to Get Rich

There’s one last point I want to make about these three jackpot investments before we get to those three secrets to getting rich on any strategy.

I have each of these but none are more than 5% of my wealth. If the investment doesn’t pay off then it doesn’t destroy my total wealth. Each has the potential for 10- or 20-times your investment so even if one pays off then I’ve doubled my wealth.

But that strategy isn’t going to make you rich right. To get rich in 2020, you’re going to have to put more of your wealth, maybe all of it on that lottery ticket. I’m not saying this is the smartest strategy. Personally, I’d rather stick with just doubling my wealth but with limited downside than risk losing everything, but I’m not going to judge what you want to do.

how to get rich in 2019

That aside, I want to give you my three secrets to getting rich on any strategy you choose. This includes the three we talked about or any wealth building strategy and it doesn’t require a jackpot investment.

In fact, these three secrets will help you build real wealth, not just the get rich kind with the potential to bust you if your numbers don’t come out.

What Does Being Rich Mean to You?

First is that you have to start with a mental picture, a dream of what rich means to you. What do you want to do and what does your life look like when you’re rich.

This is important because if you don’t have a definition of what being rich means, I guarantee you will never get there.

We are hard-wired by evolution to always want more, to not be happy with what we have so if you don’t sit down right now and define that rich life, you’ll always be chasing it.

This is actually a really interesting psychological idea called adaptive hedonism and you see it in every part of our lives, right. You’re happy to get that job at first but it isn’t long before you hate it or you’re the most blissful newlyweds but after a few years, you’ve gotten used to each other and it seems like something has changed.

Actually defining what it means to be rich for you right now and building a mental image means when you get there you can actually FEEL rich instead of still feeling like you want more.

Combine Passive Income and Active Income to Get Rich

Our next secret to getting rich is going to be to focus on passive income rather than those active income streams where you’re always trading time for money.

Don’t get me wrong, I love building my business but there’s a limit to my time. If all I had was that one income stream, I would always be limited to what I could make because I’ll always be limited by time.

Create multiple streams of income, some that take active work and others that can bring in passive income no matter how much time you put in.

Buy Assets Rather than Liabilities

Finally is you need to spend your money on assets rather than liabilities. This is the biggest difference you see between rich people and those without a seven-figure portfolio.

Assets are things that create wealth or the price increases over time. So think things like stocks, real estate, fine art, even a car if you’re using it to create wealth in a job.

Liabilities are then going to be the things you buy that destroy your wealth or that lose value. So that that gigantic 70-inch TV or all the other things we buy and don’t really need or even the spending on things that last all of an hour like eating out. There’s a fine line here too like you don’t need a thirty thousand dollar car to get to work.

Again, I wouldn’t suggest you put all your money in these jackpot investments to get rich quick. I’d rather you put maybe 5% of your total wealth in each along with a smart portfolio of stocks, bonds and real estate. Each of these lottery tickets can make you wealthy but there’s a lot of risk involved as well. Learn how to play each of them before committing too much money and start creating that financial future.

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