Having a community like this with a common interest of wanting to make money is great! I’m new to the game and like most a means of a passive income BUT whats the strategy for most 1) an accumulation of little wins (small penny gains across lots of shares) or 2) All in on one big share??
I would say definitely not this option. Diverse portfolios are much safer.
All in on one share is probably more likely to give a bigger short term return. it will also give you a bigger instant loss if you pick the wrong one
Also new to this, looking to buy my first shares tomorrow! But all the advice I’ve heard is as above. If you put all your eggs in the one basket, you risk losing it all.
So, I’m starting small and building up slowly, and hopefully more safely.
If you haven’t checked it out yet, the Beginners Questions thread is really helpful.
Maybe look at ETF
Yes, buying an ETF, you immediately buy lots of eggs in different baskets, so risk of all of them failing is minimalised.
Thank you all. Lots valuable advice.
This is a very complex subject and ultimately the golden egg.
I can’t tell you what works for you but I can tell you how I approach it.
My strategy is thus:
- How do I make lots of money in a reasonable time?
- How do I ensure I have money today to cover my needs
- What is my plan when I get rich, what am I going to do with all that money?
So my current strategy is,
- Take a huge risk, let’s be clear I have absolutely no chance of getting rich by playing safe. Sticking £250 a month into an ETF/diversified portfolio will certainly grow my money and is a smart move for long-term consistent growth (see point 2) but even with a tasty return I’m looking at 50+ years to get to £1 million?
I accept that I am willing to lose all my money.
If possible can I use someone else’s money! (Rich people don’t use their own capital to grow their wealth, they use the banks, etc. Freetrade doesn’t exist because Adam forked out £200,000,000 - other peoples money did that). People with a “poor” mentality always scoff at this one, but I prefer to get my advice for wealth building from rich people not poor people.
So for me 3 years ago I liquidated every penny I could and invested it all into Freetrade. It left me financially uncomfortable and took a while to recover, I knew what I was getting into and I accepted it was a huge risk and still is a huge risk until I can realise my investment. But I want to be rich, so I took the risk. I knew it COULD fail, I accepted that, but if I didn’t take the risk then I knew it WOULD fail (for me).
Build 3 months of outgoings in cash, holding more cash than that is pointless unless I have a specific goal. Anything after that I put into ETFs etc. I’ve only really started this part of my journey because it took me a while to recover from point 1.
Point 2 is important for a number of reasons. First it safely builds up a pot of money in case point 1 fails. Second it allows me to play with different patterns for wealth management for the day I finally get rich. So far I have played with income portfolios and growth portfolios, testing each to see how they work and what my appetite is for them. Doing that today with £1,000 will ensure I am ready for when I need to figure out what to do with £1,000,000.
Once I have all that lovely money I plan to use my learnings from point 2 to safeguard and grow my new wealth whilst I decide what my new strategy will be.
I sum up my strategy as:
To get rich, take a risk.
To stay rich, diversify.
My Freetrade shares are already worth more than my house, that was only possible because I took a risk.
It’s not suitable for everyone.
This is not financial advice, I am not a qualified advisor in any form whatsoever, this is just what I am doing.
Final point. You have to KNOW you will be rich, don’t HOPE to be rich, hoping is a “poor-mindset” behaviour, a plan to wealth is a “rich-mindset” behaviour do. It’s a mental trick that helps you achieve your goal.
A famous phrase is something along the lines of:
Poor behaviour says “I can’t do this.”
Rich behaviour says “how can I do this?”
That’s a dangerous approach and shouldn’t be recommended. Life is much more complex than that and “Knowing” doesn’t guarantee anything. Instagram may have people say these things but for the majority it doesn’t work. Sticking to a plan however risky is more likely to bring the results than Knowing/Hoping
I’m all for positive approach and always thinking things will get better but attaching that to being rich and poor people think this or that way is wrong.
As for the rest of the post 100% fair play on your gamble
Thanks for reading my big post haha! (bigger than realised when typing)
Just to clarify this isn’t about blind optimism. To know something is to have a plan, to have a goal and actively work towards it. It’s also about having mental resilience and perseverance.
I think of it like this.
When I throw a ball at a target, “am I throwing a ball?” or “am I hitting that target?”. There is a huge difference between the two.
“Am I looking at how my shares are performing” or “Am I on track to hit my target?”
That’s a very liberal way of defining ‘know’ though. You didn’t know anything, you took a calculated risk, that’s it. A massively high risk, but it seems to be playing out well so far. But it’s still very risky until freetrade floats on a stock exchange.
All very interesting reading and view points, thanks for your time to contribute.
To get rich, don’t do to the casino
To stay rich, don’t go to the casino
Everyone here has a risk profile higher than the premium bonds crowds but what your suggesting is incredibly risky. Good luck to you but I doubt many people who are truly wealth got that way using your strategy.
Yes it is extremely risky.
I kind of get your philosophy but it is just slogan material. For example I bet if you went to most jails the inmates caught for drug dealing “Knew” they were going to be rich and not get caught. They probably had huge mental strength and plans on how to become Pablo mark 2 but it doesn’t mean it will work out.
Good luck with the philosophy but it is luck and the plan rather than anything else that will be the determining factors. Poor and Rich are not all the same in how they approach things. Some are dumbasses who can’t help falling into money and some work tirelessly believing in themselves but never getting that break or bit of luck.
Not having a go but the whole “Poor people say” is a bit insulting but guess you didn’t mean it to be that way.
Correct, poor in this case is a mindset and I use it only to refer to certain behaviours towards money management.
It has nothing to do with someone’s actual financial situation, many people with significant money can easily be described as having a “poor” mindset.
Sorry if that didn’t come across in my posts, maybe I need a different word.
No worries and that is why I added you probably didn’t mean that Respect to you for taking the risk and it is true that you need to be in it to win it etc.
I’m 54 and one of the hopeful, or rather hopeless, poor.
After 6m salary put away along with a separate roof-collapsed-on-my-head fund, I’ve assigned half of what’s left to equities.
I have mentally written off that money and, if I still have the motor-skills to open the app in 2031, I ‘hope’ it’ll have been worthwhile.
What I ‘know’ is that if I’d put the whole lot in, there’s a good chance I’d be waking up in a bin under the M25 after less than a decade.
Concentration to build weath
Diversification to protect wealth
The best strategy for building wealth in my opinion is to choose a handful of stocks, maybe even 1 if you find a unicorn, and double down if they’re winners. To do this you must do very in-depth research. Read the financials, listen to the conference calls, keep tabs on competitors, have the latest information
Investing properly with the intention of making a lot of money, not merely protecting money, is pretty much a full time job
If you find a winner at some point you’ll realise the only thing that really matters is the number of shares you own and the accumulation of more shares
I disagree with going all-in with a company thats not public like the poster above has done with freetrade, because it’s more of a black box, they don’t have to share as much information as a public company