Signalee is ostensibly about core position trading. It’s also a fun way to show in realtime how to start with $1,000 and trade your way to $1 million. The premise is simple: start with $1,000 and compound it 142 times in 5 percent increments.

But there’s a second point that Signalee’s approach makes when it comes to just starting out: adding a relatively small amount of money on a periodic basis to your account initially “compounds” the value of your account faster than the core position trading strategy we use.

As an example: I bought 13 shares of EWY on February 16, 2018 for a total of $992.16 (including commission). As of today, those 13 shares are worth $945. However, the $100 was deposited into the account so now the account is worth $1,053.

In one week we knocked out 2 of the 142 trades needed to get to $1 million. Now, the number of trades we can knock out with a $100 deposit will get smaller and smaller as time passes and the account grows, because, you know, math. But at the end of the first year of Signalee’s road to $1 million, even if we don’t make a dime from trading, we’ll have knocked out 26 of the 142 trades. By the end of Year 2 we’ll have knocked out another 11 trades and have 105 trades remaining with an account value of $6,200. Still a long ways to go until $1 million, but in 2 years we’ve reduced the number of trades needed to get to our goal by 26 percent. We’ll be a quarter of the way there.

**Savings vs Returns vs Time**

Building a large account balance is a function of savings, returns, and time. Increasing the amount of any of them has a fairly drastic impact on the final balance with a long enough time horizon. Consider the following scenarios:

*Scenario #1:*

- $10,000 starting balance
- $1,000 added annually
- 6 percent return
- $71,064 ending balance after 20 years

*Scenario #2:*

- $10,000 starting balance
- $1,000 added annually
- 10 percent return
- $130,278 ending balance after 20 years

*Scenario #3:*

- $10,000 starting balance
- $5,000 added annually
- 4 percent return
- $176,757 ending balance after 20 years

You’ll notice that Scenario #3 has the highest ending balance after 20 years even though it has the lowest annual return. It’s not until you get past 20 years that the 10 percent annual returns in Scenario #2 start to overcome the higher savings rate of Scenario #3.

**What’s the point?**

Of the three variables tweaked above, savings rate, returns, and time, which do you have the most control over?