5. For example, you have $100,000 dollars to invest. 35% ($35,000) could go to property or real estate, another 30% for stocks, 10% for venture capital, and so on. An allocation strategy helps you maximize your investments and also gives you the ability to indulge in some high-‐risk behavior, if you so wish, without losing all your capital. The financial equivalent of putting all your eggs in one basket, such as investing in all one type of equity, is portfolio suicide.
6. Support the traditional and explore the new. Opportunities grow with the growth of the Internet and the advent of technology. The Internet is not just a place to go to. The exponential growth of business and the changing face of technology creates more and more investment opportunities for the modern investor, as well as the modern entrepreneur.
7. Account for every cent, every nickel, every dime and quarter. The saying goes you never know the value of money until you have to dig around the couch cushions for it. The truly wealthy know that every penny can be put to good use. Money is stagnant only when you want it to be, or when it flies out of your hands.
8. Even small amounts matter. Many people say they will invest only when they have x amount, but even a small investment of $1000 can give you great returns in the future. By thinking of returns instead of instant cash or how much you have on hand, you create your wealth through possibilities. Saving 10,000 a year with a 10% rate of return and seeding that account with an additional 10,000 per year will yield $128,000+ after 10 years. If you start with $5,000, you end up with about $94,000 after said 10 years. That doesn’t count the interest the account would generate for years after.
9. Invest your money as early as you can. The true friend of money is always time and the passage of it. The longer money sits and the more interest it collects, the higher the chances that you will reap thousands of dollars in returns.
A great example for this is the 401(k). Many Americans simply cannot wait until retirement and cash it in as soon as they can. But for what? A faster car, a bigger house or in some cases, that giant flat screen TV everyone else has. Your 401(k) alone is a savings plan you must NEVER touch. Do the math. If you have an annual salary of $100,000 and contribute 10%, with a 50% employer match rate and no salary increases, you end up with $ 741,184.02 in 20 years. Increase the contribution to 12%, with all other factors constant and the amount rises to $889,420.89. Increase the time frame to 30 years and you end up with $2 million.
10. Buy stock, not product. If you love the product, chances are others will to. So why waste time buying the product when you can make money off the stock. This creates a) passive income and b) a higher chance of return on investments.
Take Apple. Apple’s stock has risen over 12 times in the past five years, quadrupling dividends for investors. How many iPhones or iPods have you bought over the past five years? How much money do you think an average shareholder has made from the products you have been buying? Even with the death of its founder, Steve Jobs, Apple’s stock remained strong and rose. Traditionally company stock falls with the death of visible CEOs or front men, but this was not true in this case. One exception: keep in mind that sales do not make the stock. Activision is a company that markets and makes one of the biggest selling video games in the world, with sales totaling over 400,000 on the first day of the new installment release. However, their stock and shares have remained static for around 4 years.
11. Create assets that will make money for you with a minimum of effort. For example, investing in a restaurant does not require you to show up daily to manage the day-‐to-‐day running of the business, only to pay the management firm or keep the standard of a franchise.
12. Think long term. The truly wealthy do not count on single projects that net huge paychecks, but invest in opportunities that create returns and dividends that last for years. Long term also means the ability of securities to
mature. Thinking long term means having the ability to see the future in a sense—and finding projects that affect and create these futures.