Starlight Lotice
Member
Hello GAF!
Looking at how Tesla;s Stocks keeps going up and the Wall Street/Crypto threads have intrigued me into expanding my personal Wealth Portfolio via investing in many different avenues to grow it.
I wanted to ask the fine folks here whether you have a diverse strategy and is having your wealth in different options a good idea or is it better to only stay in the lanes you know to expand your Investments in a laser focused way?
There are many different ways to Invest and try and increase your money.
Stocks (Long Term Growth)
Probably the most common way of Investing and increasing your wealth, and depending on how you go about it you can get really good at it and really increase your wealth within a couple of years, but of course if you don't look into the Companies you invest in, you could lose a lot of money if you don't watch how they perform via Financial Statements and Investor Relations reports.
Stocks (Dividend)
Depending on how long you wish to keep the Company Stock, getting Dividends could be a great way to increase your investments by being given a percentage of Profits based on the Number of Shares you obtain. Lower yields take time to increase but are safer bets because they reinvest the profits back into the company, whereas higher yields mean they are not necessarily planning to reinvest it. With this option though, you can keep increasing your stake in shares via DRIP (Dividend Reinvestment Plan), which is a great option if you wish to keep the stock long term in spite of performance.
Stocks (Day Trading)
This is a high risk/reward way of getting a lot of money in a short space of time, but I personally do not do this as Leveraging sounds like taking bets with odds that vary. Betting on a share going up or down, and getting it right can bring your investment much higher than traditional Long Term holding, but getting it wrong can seriously get your finances into a bad place.
In my opinion, you have to have big balls for this and a great amount of knowledge to make a crazy amount of money on this.
Index Funds/ETFs
Same as long term investing, but you are buying/selling a share that represents a group of companies combined. These are seen as safe and used as a Retirement Blanket.
You can buy different types dependant on Sector and Countries with different returns, which gives great options on where you think the Market will go, and you don't really need to do much with them such as looking up every company you buy stocks in.
Cryptocurrencies
This one is entirely new to me and I suggest looking at
EviLore
's brilliant guide on it all, as it has all the information you will need.
As for my opinion on it, it's a new market entirely on Investing and I believe it is DeFi (Decentralised Finance), which are based on Blockchains.
I do think having a Portfolio with Crypto in is a smart idea, despite being sceptical myself, and it can always be looked into further to truly understand how it all works!
Gold
The most traditional form of "wealth", which has been around for 1000s of years and is seen as "limited" in supply (until Elon Musk starts mining from Space....or something).
Gold tends to act like Insurance in case the Stock Market Crashes or Fiat Currency becomes worthless....although the opposite CAN happen, which is why I recommend Bullion Coins as it is classed as Legal Tender (and in the UK at least, is immune from Capital Gains Tax). Overall, Gold (mostly) goes up in Value and keeps up with inflation.
You cannot go wrong with (physical) Gold, but you can buy Shares in it if you wanted to (although I would rather have it in my hand).
Recommended for a diverse Portfolio!
IRA Roth/ISAs/401(K)
ISAs tend to be great for Tax-Free incentives of keeping your wealth, and you can do this with either Shares, Cash (Fiat), or a mixture of both if you want to, although there are limits to an ISA (which I believe is you can only put in £20K a year and can only have one at a time? Could be wrong).
I personally think if you can do a dedicated Index Fund ISA, which does include fees for a Fund Manager to manage for you, it would make you a lot of money in the loooooong term (and unlike the Lifetime ISA from the Government, you can withdraw at any time). I used to own a Cash ISA myself, but your Interest is at the whim's of the Economy and you can make very little per year in return, as well as the fear that your Fiat money could be worthless.
Peer 2 Peer Lending
Possibly the laziest way to make money, but it does have some risk as well. Lend your money to a Company/Person/Bank and get Interest back on it! Simples!
There are some protections to doing this, but there are also some flaws in it as well (in the UK it is not covered by Financial Services Compensation Scheme or FCSC), and the Interest can vary dependant on who you lend to and whether or not "default" on their loans.
It's something to consider if you don't mind giving some of your money to be lent for interest, as well as the little legwork you need to do. They recommend that you do not lend over 10% of your entire Portfolio, which seems reasonable.
Real Estate
This is where the big boys play and requires a vast amount of money and time to really make money in this area. Your Portfolio would look so good with a Real Estate, but of course there are Taxes and Capital Gains to watch out for.
I personally think if you have the dedication, time, money and skills to have Real Estate in your Portfolio, then it can be really rewarding to do just as long as you know how it works and not get stung.
Royalties
Possibly the best way to make money, and the hardest to do!
Invent something no one else has done or couldn't do, add a Patent to it, and BOOM! Money maker for life if people love it!
EviLore
's GAF Brand is exactly this! So it's entirely possible to do it! Major props to every GAFFER here if they have one of these in their Portfolio!
The only other thing I can think of, which can relate to Royalties is the Side Hustle, where you use your talents to make money in your spare time to help others, but again, this does require knowing your Local Tax Laws and rights before heading deep into it. I understand in the UK you can make up to £1000 doing a side hustle before you get taxed, although I have only read about this recently.
Diversification
It is always a great idea to diverse yourself when you Invest, because not one of these ways is fool proof and you do need to protect yourself from this (like COVID).
On a personal level and my plans, I wish to have a Portfolio of 60% Gold, 20% Stocks, 10% ISA, 5% Crypto and 5% P2P Lending, as I am a true believer of the Value of Gold being the oldest and well known form of wealth (I understand that it is basically a shiny rock we extract and place a Price Tag on), and it is used to escape war torn countries (I hope we NEVER get to that, but the comfort is there).
Stocks is still pretty new to me, but I am really enjoying looking into Companies I wish to invest in and looking at the Teams, the Net Profit and it is teaching me more of Accountancy that I am trying to get into (sadly being looked over due to lack of experience).
Crypto is VERY new to me, and I am sceptical of it, but I do wish to have "something" of my Portfolio in it in case the worse thing happens with Stocks (and Gold), I should look into the Blockchain lingo and meanings more but it's an interesting way of diversification and has a lot of time to grow into something much more.
Peer 2 Peer Lending is pretty traditional, and I am surprised I never thought about doing this before really. I want it to be something I don't think about as it accumulates Capital and Interest over the years whilst looking into Crypto/Stocks/Gold Investing more. I understand the risks to it but I haven't dedicated myself into it enough to worry about losing money in it.
I did forget to mention Bonds, but they seem to be having a terrible time at the moment, and if Governments keep interests low then they will be so useless for many many years to come.
Anyway, that is my thoughts on Portfolio Investing. I probably have gotten some things wrong, but please forgive me and educate me on any one of these Investment options as I am willing to learn whilst this Crisis is happening!
Many thanks for reading my wall of text and I hope you can tell us your Portfolio Percentage plans to diversify your wealth!!!
Looking at how Tesla;s Stocks keeps going up and the Wall Street/Crypto threads have intrigued me into expanding my personal Wealth Portfolio via investing in many different avenues to grow it.
I wanted to ask the fine folks here whether you have a diverse strategy and is having your wealth in different options a good idea or is it better to only stay in the lanes you know to expand your Investments in a laser focused way?
There are many different ways to Invest and try and increase your money.
Stocks (Long Term Growth)
Probably the most common way of Investing and increasing your wealth, and depending on how you go about it you can get really good at it and really increase your wealth within a couple of years, but of course if you don't look into the Companies you invest in, you could lose a lot of money if you don't watch how they perform via Financial Statements and Investor Relations reports.
Stocks (Dividend)
Depending on how long you wish to keep the Company Stock, getting Dividends could be a great way to increase your investments by being given a percentage of Profits based on the Number of Shares you obtain. Lower yields take time to increase but are safer bets because they reinvest the profits back into the company, whereas higher yields mean they are not necessarily planning to reinvest it. With this option though, you can keep increasing your stake in shares via DRIP (Dividend Reinvestment Plan), which is a great option if you wish to keep the stock long term in spite of performance.
Stocks (Day Trading)
This is a high risk/reward way of getting a lot of money in a short space of time, but I personally do not do this as Leveraging sounds like taking bets with odds that vary. Betting on a share going up or down, and getting it right can bring your investment much higher than traditional Long Term holding, but getting it wrong can seriously get your finances into a bad place.
In my opinion, you have to have big balls for this and a great amount of knowledge to make a crazy amount of money on this.
Index Funds/ETFs
Same as long term investing, but you are buying/selling a share that represents a group of companies combined. These are seen as safe and used as a Retirement Blanket.
You can buy different types dependant on Sector and Countries with different returns, which gives great options on where you think the Market will go, and you don't really need to do much with them such as looking up every company you buy stocks in.
Cryptocurrencies
This one is entirely new to me and I suggest looking at
EviLore
's brilliant guide on it all, as it has all the information you will need.As for my opinion on it, it's a new market entirely on Investing and I believe it is DeFi (Decentralised Finance), which are based on Blockchains.
I do think having a Portfolio with Crypto in is a smart idea, despite being sceptical myself, and it can always be looked into further to truly understand how it all works!
Gold
The most traditional form of "wealth", which has been around for 1000s of years and is seen as "limited" in supply (until Elon Musk starts mining from Space....or something).
Gold tends to act like Insurance in case the Stock Market Crashes or Fiat Currency becomes worthless....although the opposite CAN happen, which is why I recommend Bullion Coins as it is classed as Legal Tender (and in the UK at least, is immune from Capital Gains Tax). Overall, Gold (mostly) goes up in Value and keeps up with inflation.
You cannot go wrong with (physical) Gold, but you can buy Shares in it if you wanted to (although I would rather have it in my hand).
Recommended for a diverse Portfolio!
IRA Roth/ISAs/401(K)
ISAs tend to be great for Tax-Free incentives of keeping your wealth, and you can do this with either Shares, Cash (Fiat), or a mixture of both if you want to, although there are limits to an ISA (which I believe is you can only put in £20K a year and can only have one at a time? Could be wrong).
I personally think if you can do a dedicated Index Fund ISA, which does include fees for a Fund Manager to manage for you, it would make you a lot of money in the loooooong term (and unlike the Lifetime ISA from the Government, you can withdraw at any time). I used to own a Cash ISA myself, but your Interest is at the whim's of the Economy and you can make very little per year in return, as well as the fear that your Fiat money could be worthless.
Peer 2 Peer Lending
Possibly the laziest way to make money, but it does have some risk as well. Lend your money to a Company/Person/Bank and get Interest back on it! Simples!
There are some protections to doing this, but there are also some flaws in it as well (in the UK it is not covered by Financial Services Compensation Scheme or FCSC), and the Interest can vary dependant on who you lend to and whether or not "default" on their loans.
It's something to consider if you don't mind giving some of your money to be lent for interest, as well as the little legwork you need to do. They recommend that you do not lend over 10% of your entire Portfolio, which seems reasonable.
Real Estate
This is where the big boys play and requires a vast amount of money and time to really make money in this area. Your Portfolio would look so good with a Real Estate, but of course there are Taxes and Capital Gains to watch out for.
I personally think if you have the dedication, time, money and skills to have Real Estate in your Portfolio, then it can be really rewarding to do just as long as you know how it works and not get stung.
Royalties
Possibly the best way to make money, and the hardest to do!
Invent something no one else has done or couldn't do, add a Patent to it, and BOOM! Money maker for life if people love it!
EviLore
's GAF Brand is exactly this! So it's entirely possible to do it! Major props to every GAFFER here if they have one of these in their Portfolio!The only other thing I can think of, which can relate to Royalties is the Side Hustle, where you use your talents to make money in your spare time to help others, but again, this does require knowing your Local Tax Laws and rights before heading deep into it. I understand in the UK you can make up to £1000 doing a side hustle before you get taxed, although I have only read about this recently.
Diversification
It is always a great idea to diverse yourself when you Invest, because not one of these ways is fool proof and you do need to protect yourself from this (like COVID).
On a personal level and my plans, I wish to have a Portfolio of 60% Gold, 20% Stocks, 10% ISA, 5% Crypto and 5% P2P Lending, as I am a true believer of the Value of Gold being the oldest and well known form of wealth (I understand that it is basically a shiny rock we extract and place a Price Tag on), and it is used to escape war torn countries (I hope we NEVER get to that, but the comfort is there).
Stocks is still pretty new to me, but I am really enjoying looking into Companies I wish to invest in and looking at the Teams, the Net Profit and it is teaching me more of Accountancy that I am trying to get into (sadly being looked over due to lack of experience).
Crypto is VERY new to me, and I am sceptical of it, but I do wish to have "something" of my Portfolio in it in case the worse thing happens with Stocks (and Gold), I should look into the Blockchain lingo and meanings more but it's an interesting way of diversification and has a lot of time to grow into something much more.
Peer 2 Peer Lending is pretty traditional, and I am surprised I never thought about doing this before really. I want it to be something I don't think about as it accumulates Capital and Interest over the years whilst looking into Crypto/Stocks/Gold Investing more. I understand the risks to it but I haven't dedicated myself into it enough to worry about losing money in it.
I did forget to mention Bonds, but they seem to be having a terrible time at the moment, and if Governments keep interests low then they will be so useless for many many years to come.
Anyway, that is my thoughts on Portfolio Investing. I probably have gotten some things wrong, but please forgive me and educate me on any one of these Investment options as I am willing to learn whilst this Crisis is happening!
Many thanks for reading my wall of text and I hope you can tell us your Portfolio Percentage plans to diversify your wealth!!!
