L
Looksking
Iron
- Joined
- Oct 3, 2018
- Posts
- 16
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One way to get rich over the long term is investing in stocks. Over a 20-30 year period compound interest can build you huge wealth and massively increase your LMS. Now, before we begin I am not suggesting the best money maxing strategy is investing but what I am going to say is it's a reliable semi passive strategy that all the elites are using to this day.
Note- if you want great wealth faster you have to start a business or get hyper lucky ( or both).
Anyway, moving right along.
The average guy can't pick stocks. He just simply can't compete with the London /NYC analysts that do this 80 hours a week with the best technology and insider information.
Instead, the average guy should DIVERSIFY, which means hold a basket of stocks.
I hear you ask, what basket?
The answer I'm going to give is 1) if you are under 30, bet on small cap emerging markets and US stocks. 2) if you are over 40, focus on larger cap dividend stocks 3) if you are in between, have exposure to both.
So how do you buy these baskets?
Simple : an ETF ( exchange traded fund) is a product that mimicks an index ( a certain well defined basket of stocks) and can be purchased quite easily.
You want to use broad indexes ( Like the S and P 500 or Russel 2000) through an established company like Vangurad.
Buy these in a tax efficient account ( IRA) and always hunt for low fees. Hold these ETFs for decades with complete emotional detachment in the short term.
Over the long run equities will provide a great compounding return ( likely 10%+ if you invest in EM and small caps) which can result in a million dollar portfolio if you invest consistently.
Each month buy a few more ETF shares regardless of the price ( dollar cost averaging) and never sell! ( you don't want to pay capital gains tax)
There you have it. A great investing strategy for the long term.
TLDR; invest in Emerging market and small cap US Equities using ETFs inside a tax efficient account by dollar cost averaging and holding forever.
Note- if you want great wealth faster you have to start a business or get hyper lucky ( or both).
Anyway, moving right along.
The average guy can't pick stocks. He just simply can't compete with the London /NYC analysts that do this 80 hours a week with the best technology and insider information.
Instead, the average guy should DIVERSIFY, which means hold a basket of stocks.
I hear you ask, what basket?
The answer I'm going to give is 1) if you are under 30, bet on small cap emerging markets and US stocks. 2) if you are over 40, focus on larger cap dividend stocks 3) if you are in between, have exposure to both.
So how do you buy these baskets?
Simple : an ETF ( exchange traded fund) is a product that mimicks an index ( a certain well defined basket of stocks) and can be purchased quite easily.
You want to use broad indexes ( Like the S and P 500 or Russel 2000) through an established company like Vangurad.
Buy these in a tax efficient account ( IRA) and always hunt for low fees. Hold these ETFs for decades with complete emotional detachment in the short term.
Over the long run equities will provide a great compounding return ( likely 10%+ if you invest in EM and small caps) which can result in a million dollar portfolio if you invest consistently.
Each month buy a few more ETF shares regardless of the price ( dollar cost averaging) and never sell! ( you don't want to pay capital gains tax)
There you have it. A great investing strategy for the long term.
TLDR; invest in Emerging market and small cap US Equities using ETFs inside a tax efficient account by dollar cost averaging and holding forever.
