I aim to get rich by investing like a billionaire

There are numerous ways I can try to get rich investing. And one of the main methods I’ve chosen on my investing journey is to think like a billion-pound fund manager.  If I imagine the cash I have is other people’s money? It makes me less likely to take crazy […]

There are numerous ways I can try to get rich investing. And one of the main methods I’ve chosen on my investing journey is to think like a billion-pound fund manager. 

If I imagine the cash I have is other people’s money? It makes me less likely to take crazy risks

Sure, some risk is necessary. I feel I can’t go through life never taking a leap of faith. But having strict risk management in place means I’m less likely to blow up my account. I don’t like the thought of having to start all over again at my age. 

I’ve built up a nice amount of cash from investing over the past few years. I want to leverage those gains to keep growing my pot for retirement. 

My investing role model

Peter Lynch is the model value investor. A voracious researcher, he created $14bn in wealth in his time as fund manager of Magellan at Fidelity. By taking his lessons from a lifetime of investing to get rich, I think I can maximise my gains. That will make the most of the modest amount of capital I have to invest. 

I know I will only have a few hundred pounds, or maybe a thousand at most, to invest in the markets at any one time. I have a family and responsibilities to take care of. So I can’t go throwing fortunes into stocks and shares every month.

Thankfully, Peter Lynch has the knowledge I need to take full advantage of the money I do have.  

Run my winners

Just because a stock has gone up a lot, doesn’t mean it can’t continue growing. Lynch says: “Your great mistakes are selling a good company, and it doubles and triples and quadruples. I sold Toys R Us way too early, it went up 20-fold after I sold it. I did the same with Home Depot. Those are probably the two greatest mistakes I ever made.” 

Track my progress

Scientists are always testing and measuring their results. I have a better chance to get rich if I can think like a scientist. Physically keeping a journal or diary and writing down the reasons for buying a stock makes it more real, says Lynch. It helps to keep the mind focused on the long term. And it also helps tan investor avoid selling too early. 

You have to say to yourself: ‘In this stock, I have a 10-year story, a 20-year story’,” Lynch says. Having details written down in black and white? It makes my path easier to follow. 

Focus on the earnings

Peter Lynch didn’t buy unprofitable companies to get rich. I could sit for years holding a company that’s making no money in the vain hope it will one day turn around. Why buy a business making zero pounds of profit? When there are so many out there already pulling in buckets of cash and returning excess profits as dividends?

Because I manage my family’s investing portfolio, I’m under the exact same pressure as a billion-pound fund manager like Peter Lynch.  The scale may be different, but the philosophy is exactly the same. We all want to come out at the end with more money than we went in with! And that’s where the Peter Lynch philosophy really starts to shine. 

The post I aim to get rich by investing like a billionaire appeared first on The Motley Fool UK.

“This Stock Could Be Like Buying Amazon in 1997”

I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

More reading

Tom Rodgers has no position in the shares mentioned. The Motley Fool UK owns shares of and has recommended Home Depot. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

ASNF

Next Post

Interview with Bryan Stevenson: On Juneteenth and Justice

Fri Jun 25 , 2021
What is the Opposite of Poverty? Bryan Stevenson says, “It’s Justice.” Salesforce.org’s head of brand and insights, Devi Thomas, sat down with Bryan Stevenson, founder of the Equal Justice Initiative (EJI) and author of Just Mercy, a book about his fight to help those wrongfully convicted on death row. The […]