Dad, what is diworsification?
Diworsification: because everyone wants to be mediocre at everything instead of great at one thing. Wait what?
Every bloke with money said money isn't everything. What I would say is that by the time you figure out how to accumulate money, you realise it is not what is most important.
My name is Tom, Gen-X, Emergency Physician, Investor, Father and trying to move from excess to abundance mentality. I still am reckoning with my strategy to keep it simple.
I am an investor in education, health and more recently, individual businesses. My thesis is research, buy and hold. Research everything you find an inkling of interest in, buy wonderful companies at fair prices and hold optimally forever. In 1995, my investing journey started. In 2016, we moved to New Zealand and paid cash for my house, my largest concentrated investment at the time. In 2022, my US/NZ tax status was changing, and my financial advisor put me in the too-hard bucket, so I undertook diligent study and an investing course and have changed my mindset and effort. I went from diworsification with suboptimal returns (right purpose, right goals, right tactics, good actions but wrong tools, wrong strategy and misaligned incentives) to concentrated investing and mentality-changing returns.
We are only here because of the assembled past that brought us together. My assembled past was incredibly fortunate with strategic long-term thinkers, and I feel I can add value for all of you by sharing. Mostly, I want to "Pay it Forward" I did not come out of school with debt; I was taught a healthy respect bordering on fear of debt, and I was taught education and professionalism. This journey is to figure out if any of you want to come along and change your strategy, tactics or actions around money/life/time so you can meet your goals and fulfil your purpose.
What are my incentives? I want a sounding board of people I trust to help develop content. Mostly, I want to produce content aimed at my children, so they don't have to learn it all by themselves, and mostly opposed to incentives that are not aligned with yours.
I want to think independently together. I think being vaguely aware of each other's goals and circumstances is key. Purpose Framework is a post I did about finding why.
"The Wealth Ladder" by Nick Maggiulli is a strategy book, but it sets out how different strategies work for different stages of life and wealth. Hetty Green, oft referred to as "the Witch of Wall Street", said, "The skills to get rich and stay rich are not the same." Between Nick and Hetty I want to introduce some of these strategies. The thing they discuss is that getting off the street and into employment or working more matters most in the first three steps. After 100K in investments, your money can start to outearn your contributions.
Rung on the Wealth Ladder…
Hetty Green, who turned $6 million into $100-200 million (1834-1916), said, "Take care of the pennies and the dollars will take care of themselves." Nick opines that we focus on the 0.01% of your net worth. I call this "the penny %"; it means bugger all to your net worth, and when the numbers become larger, it becomes a rounding error. I would say that a good defensive strategy is to have a lifestyle like you are solvent and a mentality like you are abundant. I was taught "live on last year's income"; I think it is better to be deliberate about where you spend your mental effort, physical effort and time and let your money work to give you more space for the first two.
A bloke posited that a balance of stocks, real estate, and bitcoin will lead to a good strategy. I have concentrated investments in less than 20 positions, I am ridiculously unbalanced, and I will argue this is the only way to allow compounding to work. When Charlie Munger died, he had three stock positions, and he thought you only needed one to become rich. I would speculate many may not have any balance either, but they are floating a real estate portfolio on a lot of sweat and maybe some blood.
Can we find the next generation-defining company? or is broad diworsificaiton enough
Who has their defense in order?
Who wants to write an intro or knows their why?
Get Rich Slowly