Glossary
Diversification
Spreading money across assets so no single failure ruins you.
Diversification lowers the damage any one holding can do. It cannot lower risk that affects everything at once, which is why "diversified" portfolios still fall in a general crash.
There is a tension worth naming: concentration builds fortunes and diversification preserves them. Most people who become wealthy did so concentrated - in one business - and then diversified hard afterwards.
Where this matters
Index Fund Investing
Investing
Own the whole market at minimal cost and let decades do the work
- Capital
- Under $500
- First income
- Years
- Risk
- Ceiling
- Six figures
REIT Investing
Investing
Own property income without owning any property
- Capital
- Under $500
- First income
- Months
- Risk
- Ceiling
- Salary replacement