Simple Path To Wealth
Buying a new ETF
Everyone can become wealthy.
The easiest way? Invest at least 10% of your income in passive index funds every single month.
The beautiful thing about this?
You don’t need to find the needle in the haystack (great companies), you just buy the entire haystack (all listed companies).
Interactive Brokers
I use Interactive Brokers to execute all my transactions.
Every stock I buy can be bought via IBKR. You can find out more here:
Isaac Newton
You probably know Isaac Newton.
He is famous for his groundbreaking contributions to physics and mathematics.
His most groundbreaking contribution? The Laws of Motion. It describes the relationship between a body and the forces acting on it.
These laws are fundamental to classical mechanics and are still widely used today.
It is clear that Isaac Newton was a genius. Experts state that Isaac Newton had an IQ of 190-200.
Just to put this into perspective: there are less than 500 people in the world with an IQ higher than 190 today.
But you know what?
While Isaac Newton was a genius, he was a very bad investor.
Initially, Newton made some money by investing in the South Sea Company. He sold the company but the stock kept increasing. He saw all his friends getting rich, which made him jealous.
That’s why, after the stock already increased a lot, Isaac Newton bought South Sea Company again but with way more money this time…
… And you can already guess what happened.
The bubble burst and Newton lost almost all his money.
It is often said that Isaac Newton lost the equivalent of around $50 million in today’s dollars.
That’s why he said the following:
“I can calculate the motions of the planets, but I cannot calculate the madness of men.” - Isaac Newton
The key mistake he made? He saw all his friends getting rich and he started to speculate.
He suffered from herd behavior and started to make irrational investment decisions.
This is something you should try to avoid at all costs and it’s exactly why investing passively is so powerful.
Advantages of passive investing
Passive investing can have a lot of benefits.
It’s your simple path to wealth.
At the beginning of your investment career, you’ll make a lot of (stupid) mistakes.
That’s why starting to invest in ETFs while learning about individual stocks with smaller amounts of money is usually a great idea.
This allows you to learn about investing while generating returns in line with the index.
Here are some of the main advantages of ETFs:
Cost-efficient: ETFs have very low expense ratios compared to actively management funds
You can buy an ETF on the S&P500 at a yearly costs of 0.07% ($VOO)
Diversification: By investing in an ETF, you invest immediately in hundreds of companies
Transparency: You know exactly which companies are within an ETF and you get daily updates via the website of the ETF provider
No wonder that ETFs have become so popular over the past few years.
Compounding Quality ETF Portfolio
The Compounding Quality ETF Portfolio is a passive portfolio.
The goal is to slightly outperform the major indices over time (S&P 500 and MSCI World).
Tomorrow at the opening, we will buy our fifth ETF.
You want to find out which one? Become a Partner to find out.
Premium Subscribers get the following:
Happy Compounding!
Pieter (Compounding Quality)
Secure your $100 discount here:
Used sources
Interactive Brokers: Portfolio data and executing all transactions
Finchat: Financial data