The Rocky Road To £100k
The Rocky Road To £100k
Outlining plans to grow a £20k portfolio into a £100k portfolio
The Journey So Far
For the past four years and the next six years, as part of my personal finance journey, the aim has been to aggressively grow the capital base. In other words, I am trying to acquire as many assets that contribute to overall wealth as possible and manage the consequent risk in doing so. The idea is based on the simple premise that the younger and less responsibility-laden we are, the more capable we are of recovering from the volatility and risk of potential losses that is inherent to the investing and wealth building process. Ever wonder why inequality keeps drifting wider? Well one reason for that is rich people can afford to consistently take risks and are rewarded sufficiently for doing so. Check out The Wealth Gap Unpacked for details.
As part of a diversified effort, I pursue 4 separate strategies that hopefully on balance leads to overall portfolio growth.
Safety Net
A general proxy is to stash away 3 months worth of living costs although some people use less or more depending on their circumstances. Covid has highlighted how arbitrary ‘3 months’ actually is. In the last four years, thankfully I’ve only had to draw upon my safety once due to family emergency, it happens.
Savings
I only ‘save’ money when I am planning to make a significant purchase. Outside of that, my savings are empty.
Passive
Monthly contributions to pensions and investment ISAs. This is automatic and I don’t even see the cash in the first place.
Active
This is the segment that requires the most brain power because it involves generating ideas, making highly specific investment decisions and dealing with the risk elements that comes along with it. It isn’t for everyone and staying passive is absolutely fine. There are countless active strategy routes but the ones I am most interested in are as follows:
ETF Investing*
Venture Capital / Angel Investing
Alternative Investments & Collectible Items
Cryptocurrency
* If you want to learn even more about what ETFs, check out this link - essentially you invest in multiple stocks through a tradeable fund instead of an individual stock.
* Many people have restrictions around investing in individual companies so use Exchange Traded Funds (ETFs) instead. As you may recall from some of the earlier publications, diversifying investments helps balance the inevitable risk that is inherent to investing in general. ETFs are a great tool to help achieve that. Check here for an earlier blog about shopping for ETFs.
The Journey Ahead
For 2021, in addition to the regular weekly blog posts, I will also share premium posts detailing the rocky road of aggressively growing a £20k portfolio by investing in the stock market using ETFs. Topics will include ETF selection, pulling the trigger on the actual investment, managing the risk and dealing with gains & losses. This will be a great way for people who are on a similar journey (or have intentions on embarking on one at some point) to learn and bounce ideas within a like-minded community.
*** Please select ‘Yes’ or ‘No’ in this poll so I can gauge the level of interest :) ***
A Quick Glance
Currently the ETF portfolio is comprised of 24 different ETFs in various percentage allocations. It include exposure to innovative technology companies as well as the travel & tourism sector.
Anyway that’s all for this week, have a peaceful (lit) weekend and remember, wrap up warm!
Peace ✌🏾