“The truth is, I don’t know how to do it.”
– Paul Graham, CEO of Graham & Graham, on the importance of diversification.
In fact, he says, it is the one investment strategy he doesn’t think many people can do.
“I think a lot of people are just really, really ignorant,” he says.
“There’s no strategy that’s as simple as diversifying.”
He recommends you take your time.
You can always do it later.
“It’s going to be a bit of a journey,” he cautions.
But he adds, if you want to do that, “it’s going for it.”
He goes on to suggest that you invest in companies that are “smart and good at what they do.”
The more diversified you are, the more you’ll know when to turn down the hat and stick with what you know.
“You need to diversify.
You need to look at all the different opportunities.
If you’re not getting the most bang for your buck, you’re going to go somewhere else,” Graham says.
Investing in small companies and tech companies is a great way to diversified.
If there is one thing we know for sure, it’s that technology is going to continue to grow in the years ahead.
If we all invested more aggressively in technology, we could easily get to $1 trillion in global wealth by 2030.
“The more money we invest, the bigger our wealth will be in the future,” says Scott McNealy, president and chief investment officer of New York-based McNealys Global Wealth Management.
He also cautions against buying companies that don’t have a good track record.
“Most companies are not good at building value and they will not be good at growing,” McNealie says.
In short, you need to be selective about what you buy.
The most important thing to remember is that your wealth will increase with your ability to manage it.
If this sounds like a long road ahead, well, it will.
The fact is, you won’t be able to escape the wealth trap unless you invest aggressively.
But it’s worth taking the plunge, for the right reasons.
“A lot of times, when we think about wealth, we’re focusing on the accumulation of assets, not what we do with it,” McNealing says.
You don’t need to spend all your time worrying about how you’re making money.
That’s not going to happen, he adds.
Instead, you should be thinking about how to spend it wisely.
“If you look at the bottom line, the bottom is the number one driver of wealth,” McNeely says.
So when it comes to getting started with your investments, “don’t be afraid to start small,” McNellys says.
Don’t spend all of your time thinking about what to buy, he suggests.
Instead start with what your needs are, what your business needs are.
“Do it now, invest today,” he advises.
The bottom line is: you need money.
So what are you waiting for?