3 ms·
yes, diversification is the basis for sound investing. yet, if you look at all people and companies that have grown extremely rich extremely quickly, there is
by dinkblam 1y ago
yes, diversification is the basis for sound investing.
yet, if you look at all people and companies that have grown extremely rich extremely quickly, there is one very common factor: they didn't take money out of the company, but reinvested every single penny. thats the way you can outgrow your competition which doesn't do the same thing. failing businesses are often those that paid too much to their owners.
- UK-AL 1y agoPlenty of businesses also fail. In fact a large chunk do. Starting a business is one of the most risky things you can do. Much more risky then having a diversified portfolio. However the rewards can be amazing given the relatively small chance it hits jackpot.
- umbra07 1y agoThat's not being financially healthy. That's far closer to gambling than investing in a diversified portfolio is. Just because you add the potential for an extremely high return does not make a strategy financially healthy.
- solatic 1y ago> reinvested every single penny. thats the way you can outgrow your competition which doesn't do the same thing First of all, to reinvest, you need to have some profits in the first place. Even getting to the point of having any revenue at all, you're losing 90% of entrepreneurs just to get there. Second, among those 10% of entrepreneurs who get to the point where they have any revenue (let alone profits), it's sheer hubris to think that you are unique or special in reinvesting; most entrepreneurs are not seeking to take their goose's golden eggs while they are the size of peas. There are very, very, very few entrepreneurs who pass survivor's bias to talk about their golden eggs.