Plus500 Co-Founder Alon Gonen Shares Blueprint for Reaching First Million Shekels

Israeli businessman and entrepreneur Alon Gonen, co-founder of the online trading platform Plus500, shared a financial roadmap on Instagram outlining how an 18-year-old could reach their first million shekels through consistent investing. His core message emphasized that regular monthly investments over time, combined with the power of compound interest, can significantly build wealth.

Gonen, whose personal fortune has previously been estimated at over one billion dollars, has focused in recent years on mentoring entrepreneurs and investing in startups. Among his initiatives is the defounder project, which allows founders to pitch ideas and products for a chance to win up to one million shekels in investment. In his recent post, however, he addressed young people directly, presenting a calculation to illustrate the critical importance of time in investing.

The Power of Compound Interest

Gonen asked his followers what they would do to reach one million shekels if they were 18 today, answering simply: "My short answer is compound interest." Based on his scenario, starting at age 18 with a consistent monthly investment of 1,000 shekels into a stock market index could yield substantial results.

Gonen noted that over the past 40 years, the S&P 500 index has delivered an average annual return of about 11% to 11.5%, while the Nasdaq-100 index has returned roughly 13% to 14% annually. However, opting for a conservative approach, he based his calculation on an annual return of just 9%.

"Most of the million comes from the time the money worked for you, not from the money you brought from home," Gonen wrote, highlighting the stark contrast between total out-of-pocket deposits and accumulated profits.

The Math Behind Long-Term Investing

According to the conservative scenario presented, depositing 1,000 shekels monthly at a 9% annual return would accumulate the first million shekels in approximately 24 to 25 years, around the age of 42 to 43.

Key takeaways from Gonen's calculation include:

• Total out-of-pocket deposits over 24 years amount to 288,000 shekels.

• Accumulated profits account for approximately 712,000 shekels of the final million.

• Market volatility is guaranteed, but staying invested long-term mitigates short-term drops.

Gonen concluded by emphasizing that historical averages do not guarantee future performance and warned of market volatility. He reminded young investors that patience and long-term commitment are vital, noting that the content does not constitute professional financial advice.