‘Generational wealth starts with one risk-taker.’
—Anon
Running wholesale portfolios, we see a section of society.
Yes, people with more money than most. But also people with a different mental make-up. People who understand that to build wealth, you need to take calculated risk. You need to pounce on opportunity. And through that process, there could be big downs before the ups.
Comfort with the status quo is the biggest limit to wealth.
Sometimes, I come across people who have had high earning jobs for decades. They drink good wine. Live in a nice place. Yet with few investments and little financial independence to show for that.
As retirement nears, they realise they need to do something.
Now they’re looking to enter the market.
But if they’d done that years ago, bank savings — perhaps worth hundreds of thousands — could’ve been worth millions.
I also come across people who have built great wealth. Sometimes generational wealth.
In a country like New Zealand, where earnings aren’t high, there is often an inheritance component in that.
But the greatest part is usually this: the willingness to take a calculated risk and embrace opportunity when it came their way.
Let me give you a few examples:
- A friend who has earned a steady, middle-class income over his working life but amassed a global share portfolio worth over $4 million. Simply, he started young and invested not only in the shares, but in the knowledge required to make them work for him.
- Another friend who did inherit a large sum, but also saw the opportunity to leverage key property investments. Now worth over $10 million.
- Clients who saw opportunities in property and enjoyed strong growth. With the property market changing, they’re now building share portfolios for regular, passive income and growth.
- One client, who took advantage of a certain speculative opportunity in the markets we reported on in 2019. He added around $50,000 in wealth. Now going on to build a significant portfolio.
- In my own situation, emigrating to Europe in 2015. When one business opportunity came to an end, I positioned myself for a much greater business and investing opportunity through this process.
What these examples are silent on is the pain and uncertainty. What these individuals went through to follow their opportunities. And build wealth.
They took a risk. Balanced the upside and the downside. Drove through the pain. And came out the other side with personal and financial benefits.
The world — and certainly the financial markets — are filled with opportunity. The key to taking advantage is being willing to take the risks involved in a smart way.
Every opportunity has upside. Usually, the greater the risk, the higher that upside is. And the greater the risk, of course, the higher the downside is, too.
There is a sweet spot. It doesn’t come along that often. Where the upside to you — due to your knowledge, experience, and understanding of the opportunity — is far greater than the downside.
Build more knowledge. Take more initiative to put yourself in opportunity’s path. Then you’ll come across more opportunities with overweight upside.
Source: QuotesLyfe
The Quantum Wealth Report
We provide a weekly premium news service that looks more at these sorts of issues.
Next week, we’ll be profiling news on an opportunity that recently came across our desk. It’s a listed company with a speculative product. It hasn’t generated any revenue yet. But it has raised over $1 billion in cash.
This looks to be enough to get it to commercialisation. Meaning the downside could be reasonably covered.
Yet the upside, particularly if the meme investing crowd jump on, could be 10x, maybe more. Maybe a lot more.
Naturally, this is high-risk. Speculative. Not for money you couldn’t afford to lose.
Personally, I’ll be keeping any stake to probably no more than 1% of my portfolio.
But for those willing to calculate risks like these, returns can follow.
Outsized returns, consistently realised, lead to wealth.
To get the heads-up on this news first, I encourage you to check out our Quantum Wealth Report.
Regards,
Simon Angelo
Editor, Wealth Morning
(This article is general in nature and should not be construed as any financial or investment advice. To obtain guidance for your specific situation, please seek independent financial advice.)