How the rich get richer...

How the rich get richer…

3.5 minutes read

There are a few things that the wealthy do to continue to get wealthier… but one big thing they do is they own assets, and do nothing (that is the hard part 😅)

Their money grows for them while they go out & focus on making more money. Look at this simple explanation…

If person A has $10,000 invested & gets a 10% return, their portfolio grows by $1,000.

If person B has $100,000 invested & gets a 10% return, their portfolio grows by $10,000.

If person C has $1,000,000 invested & gets a 10% return, their portfolio grows by $100,000.

Same percent return, wildly different dollar outcomes. Stay with me, I'll explain more…

This is why STAYING with it is key...

I say that the most powerful thing you can do for your investments is to keep on investing. That sounds super silly & elementary, but it is key. There is power in just adding bricks to your investments.

So keep on buying…. HOWEVER!

There are many ways to invest or trade. Dividend investing, growth investing, ETF investing, index funds or options trading, long and short term investing, buy and hold and many more, but there is just one way to make money…

BUY low and SELL higher…

Buying undervalued companies and holding them until they become overvalued is probably the most profitable strategy out there.

But it is hard to do if you don’t know where to start, or if the patience runs out, (something I am also still working on😁)

And this is how I do it!

Rather than trying to get 50% returns with low risky bets, I focus on getting smaller quantities invested in many higher, outsized returns.

This is harder to do.

You have to go out & increase your knowledge on companies & actually do what others don't do and think a way others don't think (be a contrarian).

If you want to see what I am talking about, then look at this article of Colonial coal CAD on the TSX.

I don’t know the outcome of this investment yet, however I bought at an average of 0.60c USD. (This is an example of the possible outsized returns. Will write about the outcome once investment is close)

Tales I win, and Heads I don’t loose much

You do you

No matter what type of investing you choose, the goal is to do it the way YOU like it.

Remember that it becomes a habit, a lifestyle, something that needs to go with your personality.

If you like a rush like me (a skydiver, a scuba diver, avid traveller, rugby player, adrenalin seeker) then you might like more risk.

If you are not this type, then less risk might be good for you. Just keep investing…You will make mistakes but the habit will grow.

Look at it like this…

The faster you start investing, the faster your money will grow…

And that is HOW the rich get richer and STAY rich...

Thank you so much for reading & we meet next week! Until then, keep buying undervalued assets 🙂

- Stefan