Chapter 46: A billion dollar dream
Arriving back home, I went to my room to do some research. I opened my PC to learn something about the stock market. The reason why I don't want to buy stocks in our country was because I know that it's being manipulated. Meanwhile Country U's stock market was more regulated.
So far, the only stock that I want to buy which was already present was Amazon. I looked at the stock price and it's currently at 36.55 USD. I know that stock market price fluctuates a lot so better to buy it later when it takes a dip. I looked at the historical price and from 49USD last year this was already significantly lower.
I shook my head. I rather buy when it's slowly starting to increase price again coz the trend was going down. In 2019, the price per share hit 2000 USD! Not bad. But in comparison to bitcoin, it's nothing.
Imagine in 2010 bitcoin price was just about 10 cents per share, come March 2013 it will be 266 per share, but it will drop to 50 per share the next month. Then by Dec 2017 it will be 13,062 per share. It will drop again but it will keep on rising again! Just thinking of the numbers… gosh! I'm losing count of all the zeroes! Even if I work all my life, I will never earn that amount of money! I'm so excited just thinking of it!!!
Anyway, all these increase in value would happen when internet becomes more accessible to people. For now, I'll just wait then buy Amazon I think by the time I graduate it should be 3x the value. Quite small increase, but it's a blue chip, my money's safe, and I will earn through dividends.
Now, about our family's company, currently it's still doing well, so no need to change directions until 2010 at the very least. By then, I should give clues to my father on the changing times.
"Miss Michelle, dinner's ready." Rona called as she knocked on the door.
I checked the time. It was already 7 in the evening. I did not even notice the time moving with me just thinking of my imaginary wealth!
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"Papa, what do you think of investing in the stock market?" I asked after we had dinner.
My mother looked at me in askance. Well, I was never concerned about business and money before. So, the change might be a surprise for her.
My father answered, "The stock market is not good. It's not very stable. Money is better to be invested on tangible assets. Why do you ask?"
"Well, I think Papa, that we must think more futuristic. Do you know that the internet is a slowly booming industry? I was always curious… how much profit do we make in our company? I mean, if I put in a capital 100 yuan, how many folds would it earn? Let's say, after 4 years, how much would it be worth?" Truth was, I was not into business much. I worked for the corporate world because I was afraid to become bankrupt like my parents! Business was like gambling. Either you turn a profit, or you lose even the money you invested.
"Let's see. I think that it would be unfair to simply think of it as putting a hundred-yuan investment. A start-up producing a remote-control car would have a higher marginal cost than we do. We produce by bulk. So, the more output we have, the lower the marginal cost for each unit produced. The quality in comparison to our competitors, also better. So, a unit let's say for us would cost 10 yuan, while for others, it would be around 20 yuan at least.
On mark up, a unit we're selling with the cost of 10 yuan would be around 100 yuan at least.
However, in terms of sales, we're not able to sell everything every time. So, it's also not that easy to predict. However, through the years, we are able to have a rough idea that sales also depend on the season. For example, summer, Christmas, Chinese New Year, these are high season.
Anyway, if you just think of the profit with the assumption that we sell everything we produce then, your 100 yuan becomes 900 in return. If we do this cycle 24 times a year, then you will profit 21,600 yuan. Then in 4 years, it should be 86,400 yuan. But that's not considering you reinvesting your money to expand." My father explained proudly.
I did the calculations in my mind. Dang! That's a lot. Certainly, more than my buying amazon stock plan until 2010. But that thinking has what got us become bankrupt in the first place! My father kept on expanding the company until boom. He took loans for more expansion building new factories abroad on bad timing.
"Papa, I think that although that thinking is good, there are many things to consider, and you must note that not because one adds investment again, it would turn into a profit. There must be balance. That's why we should have savings. We don't reinvest everything on the same business." I answered.
"You do have a point. However, savings in the bank has very low interest rate, so money should be reinvested. "
My mother laughed. "Morris, I think our daughter is all grown up now. Michelle, why are you asking? You want to help run the business?"
Gods no. I don't want to work. Papa can handle all that. "No Ma! I'm just curious and trying to apply what I learned. But papa, I think we should invest in the stock market. I mean, I want to try investing there too."
My father furrowed his brows. "Maybe after you graduate Michelle. You need to learn more from school, and have more experience…"
I made a sad face. "but papa… I really want to try… Mama…" I appealed.
My mother ever the supportive mother came to my rescue. "Morris, how about this. Remember the lot Michelle recommended you buy from your friend?"
"What about it?" my father asked.
"Yesterday, the Kho group announced that they will be building a mall there. The price of lot has doubled. So, how about giving our daughter the profit based on the increase in value we made from that lot?"
My eyes widened. So fast!? So that's why the area boomed. Hehehe….
"Janet, not because the price of land doubled means that it's already a profit. It's only a profit once we sell it. Don't keep counting eggs in the basket that haven't even hatched yet."
I looked pleadingly at my mom.
My mother smiled at me. "Michelle, you know I always support you. How about this? I will give you 1 million yuan and you play with that, okay?"
1 million yuan? That's still more than a hundred thousand dollars! I calculated in my head. That will do as my initial investment. After 4 years that would be 300,000 usd at least if I invest in Amazon and come 2010 I sell and will invest it all in bitcoin! Ha! This father of mine! I will show him once my 300,000 usd becomes 7 billion dollars in 2013! He will come crying to me once his business goes down! Hahahaha! Ok. That was an evil thought for a daughter to her father.
"Thank you, Mama! Papa, you just wait. In 7 years, I will make those 1 million yuan into 50 billion!"
My father shook his head. "Janet, you spoil our daughter too much. I'm sure that money would just go down the drain."
My mother just winked at me.
Ah, my mama is so awesome. I will gift her a billion dollars once my bitcoin billion dollars dream comes true. Then, she can forever lord it to my papa. MWAHAHAHAHAHA!!!!
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TBC