Passive Long Term Investing
A Diversified Portfolio is the long game to accompany your wealth and create Financial Independence in the future. Think of it as the foundations to a house, hustling till the day you die isn't sustainable nor is relying on a state pension, therefore having a passive portfolio that pays dividends to live off of in later in life.
Financial Freedom is achievable, with the right mindset and patience, within 10 years if strategised correctly. It's 100% achievable within 20 if you start now!
Most people see their leveraged house as the biggest investment in their lives and focus all their energy around it as an 'asset'. Well, a house is illiquid, you can't just withdraw your equity as and when - you have to physically sell the property.
Once you reach 60 years old how are you going to retire from the equity of your house?
If you sell it, you'll need to downsize to benefit from any equity withdrawn from the house.
By this time, your house is likely to be relative to the rising housing market prices, therefore a downsized property isn't going to be very far behind your own house price. That's not an investment.
I've been focusing on building a Diversified Portfolio that I add money to every few months, irrespective of Market Conditions.
There are multiple investment strategies to follow to diversify your risk, but ultimately, time is your best asset.
For example, Time Diversification Strategy involves adding into the Stock Market (for example an Index Fund i.e S&P500 Tracker) every few months, regardless of the Price. This means you add whether the price is high or low, as a result you are creating an average buy-in over time, benefiting from both buying in at the lows and the climb in price.
Over the years, your investment naturally compounds and generally a compounded investment will double every 5-10 years (quoted from Tony Robbins book), as you can imagine after 10 years the compounding effect really kicks in.
As Einstein said, Compounding Interest is the 8th Wonder of the World.
I'm not certified to provide Investment or Financial Advice, but the resources I learnt a hell of a lot of Investing processes from are Infinite Prosperity and Tony Robins - Unshakeable / Tony Robins - Money Master the Game
What am I invested in?
This is in no way a recommendation of Financial Advice, this just outlines what I personally invest in to give an overview of how my investment portfolio's are built up of. The ratio of investments against Bonds vs. Equities depends on current market conditions and look to rebalance every 3 months.
Generally a Rule of Thumb is: If one Asset is outperforming another, e.g Equities > Stocks, rebalancing would be to take out a portion of Equities and invest into Bonds at a lower rate...and visa versa.
30% of Monthly Income is introduced and allocated across the portfolio every month. (Check out the blog for saving strategies)
// Passive Investments:
Developed Markets Equities
Developed Markets Bonds
Emerging Markets Equities
Global Property Shares
Real Estate Investment Trusts - REITS
FTSE100 Index Fund Tracker - HSBC Index
S&P500 Index Fund Tracker - Vanguard Index
// Individual Stocks:
Apple (Recently sold for 30% Gain)
// Speculative Crypto Holdings:
// Private Companies:
Camden Brewery (Company bought back shares for 100% gain)
The more you learn the more you earn! Below are some of the most inspiring and impactful books I've read on the subject of investing or have helped with the overall mindset required to invest.
Again, a little hard to read but stick with it (as these are dated books). The techniques and timeless techniques to attaining wealth are still used among the most successful investors.
The book goes into the processes of how to approach saving money and how to look at money itself.
Also not the greatest book in the world so it's an easy, quick read with a ton of value. A must read if you're considering taking investing seriously!
A very comprehensive read and a lot to digest on the subject of investment, but it's a necessary purchase.
I'd recommend reading all the other books, especially Tony Robbins and then go back to this book once you have a good grasp of the subject. As some topics may go over your head to begin with.
Take lots of notes and break it down as it's a big book!
This is the 'dumbed down' edition of Money Master the Game by Tony Robbins and it's well worth a read.
Very understandable and after you've read this you will really grasp the importance of developing a Passive Investment Portfolio.
It goes through the psychology and some basic investment principles and it's a MUST read if you're completely new to investing in general.
An inspiring story from the book, that displays the power of compounding investments...a UPS driver on a minimum wage, retired in his 70's a millionaire. By taxing himself and putting away a portion of his salary a month into an Index Fund, he was able to compound his portfolio dramatically over a 40 or so year period.