Investment decisions and thinking like a multimillion. How would someone with $1,000,000 net cash invest his money versus the middle class who would generally have around $100,000 net cash to invest? How someone invest 1% of their portfolio matters this is why. If you have $100,000 cash net worth. 1% of your portfolio is $1,000 If you have $1,000,000 cash net worth. 1% of your portfolio is $10,000 If you have $100 million dollars cash net worth. 1% of your portfolio is $1,000,000 Most people who have less money take on more risk. This is because the perceived actually face dollar amount that they put in seems like a little money (Middle class invest $1,000). But when compared to their total net investment cash capital it is still 1%. Do you understand what you are investing in? Most middle class people risk 1% or more of their net cash investment capital on investments that they do not understand at all like; 401k plans, mutual funds, random stock picks etc. Would a Millionaire or Multimillionaire do the same thing? 1% of their net cash worth is $10,000 - $1,000,000. When they make an investment decision they are less likely to take on risk and invest in things they do not understand. Why how you handle 1% of your net worth is important. No matter if you have $100, $1000, $10,000 or $1 Million dollars how you spend that 1% is important due to compound growth. Compound growth of well manage investments can turn ($10,000 to $10 million dollar+ like Warren Buffet did). The main point of investing is to grow your capital not risk your capital. You can grow your capital by reducing risk. If you understand your investments and never lose money by reducing risk. You will then gain money.
Posted on: Sat, 08 Jun 2013 07:25:00 +0000
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