January 26, 2019

Do you know what’s the annual average return to be expected by hedge funds?

I still remember the first time I learned about how much return typical hedge funds aim to make in 10 years.

It was insane.

It was a busy day in winter and I had coffee with one of my richest friend who runs a hedge fund himself.

He is from one of the wealthiest families in Asia.

I tried schedule a coffee with him a few times but it got pushed back because both of our schedules were full.


4 pm, he texted me, “do you want coffee now?”

Still trying to wrap up my audit work, I said “sure!”

Running across the street, I went to the closet coffee shop near his office in Vancouver…

Even though he runs a hedge funds with millions of dollars under his management, he is a nice and friendly guy.

When I met him, he was wearing a full suit as if he was about to meet a new investor.

Our conversation lasted for over an hour.

It was fun. 

We talked about life, family, work and more…

But what I really wanted to know is how he manages to get so many investors and what is his return.

So I asked

“So, what is the return do you usually aim for when you’re investing?”

He said, “Well, I usually aim for 10x in 10 years

I was like WOAH.

This is definitely a big hairy and ambitious goal.

It broke my mind of what’s possible.

I asked, “Is that even possible? Isn’t that too aggressive?”

He said, “Most of my clients are rich people like CEOs and CFOs. They are not aiming to get 5% per year. They want transformational wealth. That’s why I aim to present them with opportunities to 10x their portfolio in 10 years”

He added, “If you do the math, you will actually realize that it works out to be 30% per year.”

And he was right.

If an investor achieve around 25% to 30% per year, then he will 10x his account in 10 years.

On that day, I memorized these words and set it as my goal: 

10x in 10 years

30% in 12 months

This is actually doable.

Ever since then, this is my goal.

The funny thing is – ever since that day…

My return has been over 30%.

In the first 3 years and 1 month, I made over 200% since inception​​​​​​​​

This is also the goal I am advocating for you.

If CEOs, CFOs, Private Hedge Funds are aiming to get 30% a year, why can’t you get 30% per year too?

Getting 30% versus 5% is the difference between night and day.

Especially when you incorporate the power of compound interest.

Warren Buffett is a strong advocate for long term investing.

One night, I sat in front of my computer and calculated his annual average return….

Guess what? 

Warren Buffett’s return is almost exactly 30% per year too.

This means he must have aimed to 10x in 10 years as well.

This is also my goal.

To help you better visualize what it means to make 30% a year, I’ve created a return calculator for you.

This is a free calculator that will help you set your financial goals. This calculator includes the power of compound interest

Now you know what to expect. Imagine how much money you will have in 10 years. Take into compound interest.

It’s hard to imagine the exact figures right?

This is why I’ve created a return calculator for you.

Click the button to use the calculator below for free

About the author 

Eric Seto

Eric Seto is an investor with over 10 years of experience. He travelled around the world to help with auditing, accounting, purchase and sale of companies.

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