One of the best pieces of financial advice I’ve heard with regards to how to build a portfolio of assets is to focus on building said portfolio for the next generation. This statement is one which is both profound as well as simple. I’m going to dive into two key concepts beneath the surface of this idea.
The first is to focus on buying stable secure assets that are likely to grow at a reasonable rate over time. The emphasis here is on safe and stable. If a company goes out of business in five years and one chose to gamble a large portion of their portfolio on such an investment, think about the impact it would have on your kids.
Play it safe, and buy non-speculative assets, in a diversified manner. After all, it’s not called a “portfolio” for nothing.
The second key concept I think about with respect to building a portfolio for my kids is to consider what will be “cool” in a couple decades from now. Knowing which secular trends are here to stay is important, as one will want their portfolio holdings to be supported by as many tailwinds as possible.
Leaving a portfolio up to chance and hoping one’s investments will go up over time is plain foolish. Invest in the future, if you’re investing for the long-term.
Invest wisely, my friends.
