A few weeks ago a good friend of mine (and fellow investor) posted the following on his Instagram feed:
He has held Apple stock for 12 years and his return on investment has been over 1,000%. Needless to say I was very excited for him and it reminded me of the foundation of building wealth over time.
As shared on instagram this past week – here is the difference between the truth and what they try to tell us:
As much as the media, business schools, analysts, and Wall Street “professionals” try to over-complicate things, the truth of the matter is that the formula for building wealth is very simple:
- Avoid and/or pay off any lingering consumer debt that might be holding you back.
- Spend less than you make and save your money.
- Use that money you saved to choose the right investments and allocate your money to those investments.
- Give those investments time to flourish.
- Be Patient.
Patience is a key factor. The market is volatile and unpredictable in the short term. Stocks are volatile and unpredictable. However, when you choose the right companies and understand the reasons of WHY you purchased an investment in the first place, you’ll be better positioned to overcome the tough times.
The fact that my friend has owned Apple for 12 years tells me that he purchased the stock around 2006.
It also tells me that despite the fact the stock “crashed” around 2012 “with no bottom in sight” as noted in the linked article, he kept holding it.
It tells me that he is a patient investor and that has paid off significantly!
Full disclosure: I am also a shareholder of the stock. However, keep in mind this is NOT a recommendation to buy or sell Apple. The purpose of this post is simply to show you – using a real life story – the power of being patient with investments in quality companies and what return on investments can look like over time.
Also, keep in mind that not all investments are created equal and not all companies deserve patience because sometimes they can be in a dying industry, for example. One of the many things I teach my students in the investing bootcamp is how to analyze an investment to determine for themselves whether something can be profitable for the long term.
With that said, it is also important to keep in mind that investing always comes with risk and no one can determine returns on investment with 100% certainty. This is why is called investing.
Question for you: What are your thoughts on being patient with investments? What would be a deal breaker for you when it comes to selling something from your portfolio? Share below!
Have an amazing weekend and cheers to profits!
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4 thoughts on “The Power of Time, Choosing The Right Investments, and Patience.”
Excellent blog post love it. I’m also a Apple investor but at higher price that your friend.
Glad you enjoyed it :). I don’t know many people that were able to get Apple as low as my friend did so you’re not alone 🙂
We agree with you that patience is a key factor in investing success. We bought shares in 2012 blindly and just held on to them out of ignorance and that one stock is the best performer in our portfolio. We new very little about stocks then, and at this point we are not at expert level however, we have gained knowledge and we continue to add to it daily, post like this help too, thank you.
Hi, Gabriel! Thank you for stopping by and sharing your experience. I am glad you enjoyed the post. Many people don’t realize that investing is not really as complicated as many might make it seem. If we buy QUALITY and then just let it ride for years and years, our return on investment can be incredible. Sometimes setting a “buy and leave it alone” strategy works wonders as long as the thesis why we bought something doesn’t change.