is it possible to get rich from stocks

Is it possible to get rich from stocks?

For many people the central question is straightforward: is it possible to get rich from stocks. This article examines that question in depth — outlining the main pathways (long‑term buy‑and‑hold, concentrated high‑growth picks, active trading, leveraged derivatives, private/early‑stage equity and entrepreneurially driven equity outcomes), reviewing historical evidence and statistics, explaining the mechanics that create wealth in public markets, and offering practical, evidence‑based steps to improve your probability of success.

In the next sections you will find clear definitions of “rich,” historical return context (with dated references), the principal routes available to individual investors, the risks and trade‑offs involved, realistic scenarios that illustrate probability and required saving/return assumptions, and a practical framework to assess your own chances and choose a plan. If you want a neutral, practical guide that also highlights Bitget tools where appropriate, read on.

Overview and definition of “rich”

What does “rich” mean? The word is subjective. For clarity, we define measurable tiers:

• Millionaire: net worth (financial plus other assets) of USD 1,000,000.
• Multi‑millionaire: net worth between USD 5–50 million.
• Billionaire: net worth of USD 1,000,000,000 or more.

When asking whether it is possible to get rich from stocks, we focus on wealth accumulated primarily via public equities and related instruments (stocks, ETFs, listed funds, and exchange‑traded derivatives). We exclude routes whose main value comes from running a private company or from non‑equity assets (real estate, collectibles) unless those assets are eventually converted into public equity holdings.

Three stock‑derived measures matter:

• Capital appreciation: growth in share price of holdings (unrealized or realized gains).
• Dividend income: cash payments returned to shareholders, which can be consumed or reinvested.
• Total return: the combination of capital appreciation plus dividends (and net of taxes/fees). Total return is the most complete measure of wealth generated by stock investing.

Historical evidence and statistics

Historical returns give useful context but do not guarantee future outcomes. Observed long‑term returns show what is possible under particular economic conditions.

• As of 31 December 2023, according to S&P Dow Jones Indices, the historical nominal annualized return of the S&P 500 from 1926 through 2023 is roughly 10–11% per year including dividends. This long‑term figure illustrates how compounding in broad equity markets has created substantial nominal wealth over decades.

• As of 31 December 2023, according to the World Federation of Exchanges, the global market capitalization of listed companies was on the order of approximately USD 100 trillion (market size varies by report date and methodology). Daily trading volumes and liquidity vary widely by market, but the scale shows the breadth of opportunity in public markets.

• Individual outcomes vary greatly. Historical examples include long‑term index investors who became millionaires by disciplined saving and compounding, and early shareholders in firms that grew from small listings to massive companies. Yet empirical studies of retail trading show high failure and loss rates among active short‑term traders; for example, regulatory studies and academic research consistently report many retail day‑traders lose money after fees and taxes.

Limitations to bear in mind:

• Survivorship bias: studies highlighting big winners often omit the many companies that failed.
• Access and scale: institutional investors, founders, and employees with private equity stakes often access outsized returns not available to ordinary retail investors.
• Historical returns are nominal; inflation, taxes, and fees reduce real net outcomes.

Principal pathways to getting rich from stocks

Below are the main routes through which public markets create significant wealth.

Long‑term buy‑and‑hold investing

Long‑term buy‑and‑hold is the lowest‑friction, empirically best‑documented path for many retail investors. It includes:

• Broad index funds and ETFs: owning a diversified slice of the market reduces single‑company risk while capturing the market’s total return.
• Blue‑chip growth stocks: concentrating in high‑quality, durable businesses that compound earnings over decades.
• Dollar‑cost averaging and regular contributions: smoothing purchase price and growing exposure over time.

Why this works: compounding returns and reinvested dividends can transform steady savings into large sums across multi‑decade horizons. The trade‑off is that becoming extremely wealthy (multi‑million or billionaire) typically requires either very large persistent savings rates, very high long‑term compound growth above market averages, or an early concentrated stake in a company that appreciates extraordinarily.

Investing in high‑growth individual stocks

Picking early winners (e.g., small listings that grow into giants) can produce outsized returns. This route requires:

• Exceptional research or insight, or access to early allocations.
• Tolerance for concentration risk: one company can deliver huge gains but also wipe out capital.
• Patience and the ability to hold through volatility.

History is scattered with examples where concentrated stock bets produced fortunes. Yet for every winner there are many losers. This strategy raises variance: it increases the probability of very high outcomes but also of total loss.

Active trading and day trading

Active trading (day trading, swing trading, momentum trading) aims to profit from short‑term price moves. Important realities:

• Empirical studies show a minority of retail day traders are consistently profitable net of costs.
• Success requires rigorous skill, fast execution, low transaction costs, psychological discipline, and reliable risk management.
• Trading magnifies tax and fee effects; short‑term gains are often taxed less favorably.

For most retail participants, the probability of becoming rich purely through short‑term trading is low because consistent above‑market returns are difficult to achieve and hard to sustain.

Leveraged strategies and derivatives

Leverage (margin, options, futures) amplifies gains and losses. Derivatives can be used for directional bets or complex strategies.

• Upside: a small initial capital base can control larger exposure and amplify returns.
• Downside: leverage increases the probability of total loss and margin calls; options can expire worthless.

Leverage can produce rapid wealth changes but dramatically increases failure risk. Regulatory safeguards (margin requirements, liquidation rules) exist to limit systemic risk and protect retail investors, but individual ruin remains possible with reckless leverage.

Private/early‑stage equity and venture‑style investing

Public equity investing is different from private equity and venture capital. Many of the most extreme wealth outcomes come from:

• Founders and early employees who own concentrated private shares that appreciate upon IPO or acquisition.
• Angel investors and VCs who take concentrated stakes in startups that sometimes return multiples.

These routes typically require access, accreditation, or both. They are higher variance and often illiquid until exit.

Combining stock investing with entrepreneurship

Many high‑net‑worth individuals combine entrepreneurship with public equity gains. Building a business and taking it public (or selling it) often creates concentrated equity holdings that, when public, can be monetized. For most retail investors who are not founders, relying solely on public markets without private or entrepreneurial advantage makes reaching extreme wealth tiers less likely without exceptional returns or very large savings rates.

Key mechanisms that enable wealth creation in stocks

Compound returns and time horizon

Compound growth multiplies returns on both the original capital and prior gains. The mathematics of compounding mean that a steady annual return over long horizons produces exponential growth.

Example: at 8% annualized return, USD 10,000 grows to approximately USD 46,610 in 20 years and USD 217,245 in 40 years (ignoring taxes and fees). Starting earlier dramatically improves outcomes due to compounding.

Reinvestment of dividends

Reinvested dividends accelerate portfolio growth. Dividend reinvestment plans (DRIPs) purchase additional shares automatically, increasing the share base that benefits from future price appreciation and further dividends.

Value creation vs. speculation

Sustainable wealth from equities typically ties to underlying business value creation — rising revenues, profits, and cash flows. Speculation on short‑term price moves (momentum, rumors) can generate gains but is less likely to compound into long‑term wealth unless paired with structural skill and an edge.

Risk, probability, and expected outcomes

Stocks offer higher expected returns than cash or short‑term bonds but come with material downside risk. Key risks:

• Market risk: broad declines can reduce portfolio value significantly.
• Concentration risk: single‑stock bets can destroy capital.
• Leverage risk: magnified losses and forced liquidations.
• Sequence‑of‑returns risk: unlucky timing of withdrawals during downturns can permanently impair outcomes.

Realistic probability illustrations (illustrative scenarios):

• Scenario A (moderate saver): Start at age 25 with USD 10,000 savings and save USD 500/month at a 7% annual return. By age 65 the portfolio will be about USD 1.1–1.2 million — a plausible route to millionaire status for disciplined savers.

• Scenario B (higher saver): Same start but save USD 2,000/month at 7% yields roughly USD 4.6–4.8 million by age 65.

• Scenario C (seeking rapid wealth): Starting capital USD 50,000 and seeking USD 1 million in 10 years requires a compounded annual growth rate (CAGR) of roughly 26% per year — a high target that typically requires concentrated high‑growth investments or exceptional trading/venture outcomes, with much higher risk.

These examples show: ordinary savings plus market returns can create wealth over long horizons; achieving rapid or extreme wealth without business ownership or early concentrated stakes usually requires either very high sustained returns (rare) or leverage (risky).

Practical strategies and principles for increasing odds

Evidence‑based principles to improve chances of success in public equity investing:

• Diversification: reduce single‑company risk while maintaining market exposure.
• Low fees: choose low‑cost index funds or ETFs to maximize net returns.
• Tax‑efficient accounts: use tax‑deferred or tax‑advantaged accounts where available to keep more of your return.
• Regular contributions: automated saving and dollar‑cost averaging smooth entry timing.
• Rebalancing: maintain target allocation and capture the benefits of buy‑low sell‑high discipline.
• Risk management: use sensible position sizing, and if using leverage or derivatives, maintain strict limits and rules.
• Education and humility: continuously learn, avoid overconfidence, and keep realistic expectations.

Common product choices for retail investors include broad index ETFs, target‑date funds, dividend growth ETFs, and professionally managed mutual funds. For execution and custody, Bitget offers trading services and Bitget Wallet for Web3 custody and self‑custody needs.

Common pitfalls and myths

• Myth: Fast wealth is easy if you just pick the next winner. Reality: most investors who chase hot tips or past winners underperform after fees and taxes.
• Myth: Leverage is a shortcut to riches. Reality: leverage accelerates losses and increases the probability of ruin for many retail participants.
• Pitfall: Timing the market. Trying to buy low and sell high consistently is exceedingly difficult; many long‑term winners were patients who stayed invested.
• Behavioral biases: loss aversion, overconfidence, herd behavior, and confirmation bias cause many investors to underperform. Recognizing and mitigating these biases is essential.

Taxes, costs, and regulatory considerations

Taxes and fees materially affect net wealth accumulation:

• Capital gains tax rates differ by jurisdiction and between short‑term and long‑term holdings; long‑term holdings frequently enjoy preferential rates.
• Dividend taxation depends on local tax treatment and whether dividends qualify for reduced rates.
• Trading costs, fund expense ratios, and bid/ask spreads reduce returns; low‑cost products preserve more of the market return.
• Margin rules and derivative regulations limit how much leverage retail investors can use; brokers will enforce maintenance requirements and may liquidate positions in adverse markets.

Always account for taxes and transaction costs in your planning. Use tax‑advantaged accounts when possible and recordkeeping to optimize tax outcomes.

Special topics and alternatives

Role of cryptocurrencies and other asset classes

Cryptocurrencies and other alternative assets can offer high return potential but also extreme volatility and different risk profiles compared with public equities. When comparing:

• Stocks are claims on productive companies with revenues, profits and governance regimes enforced by securities laws.
• Crypto assets vary: some aim to be currencies, some tokens represent protocols, others are speculative stores of value. Their valuations can be driven by network adoption and sentiment rather than traditional earnings.

Diversifying across multiple asset classes can improve risk‑adjusted outcomes, but do not conflate crypto with public equities: they behave differently and require separate attention. For custody and trading of crypto assets, Bitget Wallet and Bitget’s trading services provide integrated solutions for investors exploring both public equities and tokenized assets.

Behavioral finance and investor education

Improving financial literacy — understanding fees, compounding, taxes, and probability — measurably raises long‑term outcomes. Behavioral tools like automated investing, rules‑based rebalancing, and commit‑to‑plan strategies reduce harmful emotional decisions.

Case studies and illustrative examples

Below are anonymized and simplified examples illustrating different outcomes.

• Long‑term index investor (successful steady path): An investor began investing USD 300/month in a broad market index at age 30 and continued until age 65. With an average 7% real return, disciplined saving and reinvestment produced a seven‑figure balance. This outcome required patience and modest risk tolerance rather than stock‑picking skill.

• Early investor in a high‑growth company (outsized outcome): An early retail investor bought shares in a small listed company that later became a major technology firm and held through multiple market cycles. A concentrated stake turned a modest initial investment into a large multiple of wealth. This path required conviction and the willingness to accept large swings.

• Professional day trader (mixed outcomes): A trader with rigorous risk management and proprietary edge achieved above‑average returns for several years but faced drawdowns and needed continuous adaptation as market structure changed. Many retail traders without this edge experienced net losses instead.

• Leveraged collapse (negative outcome): A retail investor used high leverage to pursue rapid gains during a volatile period and was margin‑called during a sharp market swing, losing most of the account. Leverage greatly increased the downside probability.

These examples highlight the roles of skill, edge, access, luck, and discipline in determining outcomes.

How to assess personal likelihood and plan

A practical framework to assess whether it is possible for you personally to get rich from stocks:

1. Starting capital: larger initial capital reduces dependence on extraordinary returns.
2. Time horizon: longer timelines improve the odds via compounding.
3. Savings rate: higher continuous savings enable wealth accumulation at lower required returns.
4. Risk tolerance: determine whether you can withstand concentration and volatility.
5. Skills and access: do you have an informational or process edge, or access to private placements? If not, diversification is safer.
6. Goals and timelines: quantify target wealth and compute required CAGR to reach it given your savings — then evaluate realism and trade‑offs.

Simple planning step: calculate the CAGR needed to hit your goal given current savings and planned contributions. If required CAGR is substantially above historical market returns, consider adjusting timeframe, increasing savings, or seeking alternative routes (entrepreneurship, private equity) while understanding added risks.

References and further reading

This article synthesizes empirical market studies, investor education sources, and regulatory reports. Representative types of sources for deeper reading include:

• Historical return studies and index provider reports (S&P Dow Jones Indices).
• Global market statistics (World Federation of Exchanges reports).
• Academic research on retail trading performance and behavioral finance.
• Tax authority and regulator documentation on investor protections and margin rules.
• Practical investor guides from recognized asset managers and fiduciary education providers.

As of 31 December 2023, according to S&P Dow Jones Indices, long‑term S&P 500 returns including dividends were roughly 10–11% annualized. As of 31 December 2023, according to the World Federation of Exchanges, global listed market capitalization was on the order of USD 100 trillion. These dated statements provide context for historical market scale and average returns.

See also

• Investing
• Stock market
• Compound interest
• Diversification
• Day trading
• Venture capital
• Financial literacy

Short practical next steps and call to action

If you are asking, "is it possible to get rich from stocks," the short answer is: yes, but the path you choose determines the probability, time, and risk. For most retail investors, disciplined long‑term investing combined with persistent savings offers the most reliable route. If you seek faster or larger outcomes, expect higher variance and a higher chance of loss unless you possess or can access exceptional skill or early equity stakes.

To explore execution and custody options, consider Bitget for trading and Bitget Wallet for Web3 custody. Learn the basics, choose low‑cost diversified products to start, and plan a realistic savings and investment framework.

Further explore Bitget’s education center to build core skills and evaluate advanced tools only after you fully understand risks and requirements.

As of 15 January 2026, according to Bitget Research, investor interest in cross‑asset diversification (public equities plus tokenized assets) continues to grow — but asset behavior and regulatory treatment differ, so treat them as complementary, not interchangeable, when planning long‑term wealth building.

Thank you for reading this practical guide to whether it is possible to get rich from stocks. If you want a personalized checklist to translate your goals into a plan (target savings rate, horizon, and asset allocation), use this article’s framework as a starting point and consult a qualified adviser for tailored guidance.