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Dave Ramsey has studied how common millionaires got their wealth. https://www.ramseysolutions.com/retirement/the-national-study-of-millionaires-research https:

by xupybd 4y ago

Dave Ramsey has studied how common millionaires got their wealth. https://www.ramseysolutions.com/retirement/the-national-study-of-millionaires-research https://www.ramseysolutions.com/retirement/the-national-stud... "But they didn’t risk their money on single-stock investments or “an opportunity they couldn’t pass up.” In fact, no millionaire in the study said single-stock investing was a big factor in their financial success. Single stocks didn’t even make the top three list of factors for reaching their net worth. Three out of four millionaires (75%) said that regular, consistent investing over a long period of time is the reason for their success. So, the story about the young computer genius who developed an app that earned millions overnight is the exception, not the rule."

AnimalMuppet 4y ago
From the Bible, in the book of Proverbs: "Divide your portion into seven, or even to eight, for many are the mischances of the world." Don't put it all on one stock. Index funds are a different story.
- al_borland 4y ago
  Index funds are good to diversify across many different stocks, but it is also wise to diversify across asset classes. For example, stocks (with something like the S&P 500), bonds, an international fund, real estate, etc. Allocate a percentage to each and rebalance if/when things diverge too much from your percentages. Each personal allocation would be slightly different based on their goals, risk tolerance, and age. The idea here is that when one asset class is weak, another may be strong. For example, during "the lost decade" in the US, international stocks did fairly well. By rebalancing on a scheduled basis you effectively end up buying relatively low and selling relatively high without having to time the market.

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Dave Ramsey has studied how common millionaires got their wealth. https://www.ramseysolutions.com/retirement/the-national-study-of-millionaires-research https:

by xupybd 4y ago

AnimalMuppet 4y ago
From the Bible, in the book of Proverbs: "Divide your portion into seven, or even to eight, for many are the mischances of the world." Don't put it all on one stock. Index funds are a different story.
- al_borland 4y ago
  Index funds are good to diversify across many different stocks, but it is also wise to diversify across asset classes. For example, stocks (with something like the S&P 500), bonds, an international fund, real estate, etc. Allocate a percentage to each and rebalance if/when things diverge too much from your percentages. Each personal allocation would be slightly different based on their goals, risk tolerance, and age. The idea here is that when one asset class is weak, another may be strong. For example, during "the lost decade" in the US, international stocks did fairly well. By rebalancing on a scheduled basis you effectively end up buying relatively low and selling relatively high without having to time the market.