This type of post only surfaces during a bull market, when greed tug at us the hardest, making satisfaction elusive. Ever since making my first public equity investment in 1996, I’ve been hooked, wrestling with the constant mental tug-of-war over how to be at peace with my investment decisions. Maybe you fight the same battles.
During the spring 2025 stock market meltdown, I deployed most of my rental home sale proceeds into the stock market. I started buying too early—in early March—only to watch stocks keep falling. Still, I kept dollar-cost averaging through mid-April. Eventually, the market rebounded.
Of the proceeds I invested during March and April, about $500,000 went into individual stocks, mostly in tech. Of that, $40,000 went into Meta, a long-time holding in my rollover IRA.
My first new Meta buy was on March 10 at $591.76 a share. When it dropped to $488.50, I felt like an idiot, but defiantly bought more. My last dip-period purchase was at $716.64 before rotating into value names.
As a DIY investor determined to outperform, active management can be very stressful. Unless you truly enjoy the investing process, you are better off sticking with 100% passive index funds or ETFs or hiring a financial professional to manage your portfolio.
The Need To Invest a Lot to Make a Lot
For two months, I felt more stressed than when guessing “C” on all the SAT questions I didn’t know. I was also just as nervous as waiting the 30 seconds for my Series 7 exam results to hopefully break 70%. Back at Goldman, failing would’ve been humiliating.
All that time, stress, and effort to put $40,000 into a volatile tech stock and five months later, I’m up ~40%. That’s a great return. But in dollar terms, it’s only $16,000 before taxes. That doesn't even cover half the cost of remodeling my parents’ two-bedroom in-law unit in Hawaii.
Yes, $16,000 is better than losing $16,000 in a bear market, but it's a bull market now so I expect to profit. However, the money doesn’t change my lifestyle as I strive to build more passive income. If I reinvested it in a 4% yielding asset, my annual gross passive income would rise by just $640. A couple of traffic tickets and the passive income is wiped out.
In addition, unlike real estate, the funny money gains in the stock market can evaporate quickly given how rich valuations are.
As an active investor with part of my capital, I also take losses. For example, I’m currently down about $6,000 from dollar-cost averaging into UnitedHealthcare since the $300/share level. What a disappointment as the S&P 500 marches higher.
The Courage to Take Big Risks Is Elusive
Looking back, I should have invested far more in Meta during that window or used options for leverage. But I wasn’t willing to take such a concentrated bet on a single stock that was plummeting. Government policy was highly uncertain and stocks were richly valued. As growth stocks ride the escalator up, they tend to take the elevator down.
Fear of loss naturally throttles one from making outsized returns. At least it does for me.
That’s the dilemma: to get really rich, you need to take outsized risks. Without them, it’s tough to outperform the crowd who mainly invest in index funds. But most of us are simply too afraid to take outsized risks because we fear loss more than we appreciate gain.
Take the MBA student from a top 25 school. They build connections, analyze companies through case studies, and learn how to build a business. But what do most do instead? They take well-paying jobs in finance, tech, or consulting.
After two years of lost income and $150,000 in tuition, playing it safe makes sense. That’s what I did, returning to Credit Suisse once my MBA was done. It then took another six years for me to finally take the leap of faith in 2012 and focus more on Financial Samurai.
My Biggest Single Investment Slug
In 1Q 2025, with markets so volatile I wasn’t about to put much more than $50,000 into a single stock. Instead, I mostly bought $2,000 – $10,000 tranches of the S&P 500 as the index was declining.
Then, in 2Q, I made my largest single investment with the proceeds, a $100,000 allocation to the Innovation Fund. Because it’s diversified across at least 13 private growth companies, I didn’t see it as overly risky. It was more like investing $8,000 in each of the companies in the fund.
In my podcast with Fundrise CEO Ben Miller, I asked about the fund’s concentration risk, given OpenAI, Anthropic, and Databricks make up about 50% of its portfolio. Although I may have sounded concerned, the truth is, I want even more concentration for this bucket of money! They’re hyper-growth AI companies, and $100,000 in that space is a bet I’m comfortable with.
Not Going to Get Rich on $100,000 Either
Sadly, investing $100,000 is probably not going to improve my life either.
In retrospect, I should have also invested more into the Innovation Fund, as $100,000 was less than 7% of my home sale proceeds. With Anthropic now valued at $170 billion and OpenAI offering secondary shares at $500 billion, a larger position would have yielded more upside.
My target for venture is usually 10–20% of investable capital, which would have meant $150,000–$300,000 in this case. But somehow, I just decided on $100,000, probably because it sounded like a nice round number. I didn't think things through, especially as uncertainty and fear abound.
This lack of consistency in investing is why the forced savings aspect of owning a home with a mortgage is such a powerful wealth builder. Even when you're the most distracted or scared, you'll stay pay down some principal every month.
Quick Calculation On A Potential $100,000 Return
If the fund delivers a 25% IRR over five years, $100,000 grows to about $305,000—just over 3X my money. Over ten years, it becomes roughly $931,000, or 9.3X. Those are impressive numbers, but at age 53, $305,000 wouldn’t move the needle much. Maybe I’d splurge on a Toyota Tundra in Honolulu, guilt-free, but that’s about it.
At 58, $931,000 could cover a full remodel of my parents’ old house. But after my last gut remodel, I swore I’d never do one again. It’s just too painful and time-consuming.
More likely, I’d put the proceeds toward buying a fully remodeled home in Honolulu. That said, I should already have enough for that once I sell my primary residence in San Francisco and use the tax-free exclusion benefit. So I'm not sure what the money will be used for, except to funnel into new investments.
I Want To Have A $500,000 Position
If I’m willing to save and invest ~$500,000 for each kid’s 529 plan, then I should be just as willing to put $500,000 into private AI companies that might make their college education obsolete.
Now, let’s dream for a moment: if I had invested $500,000 and somehow earned a 40% IRR for 10 years, that would grow to around $14.4 million. That’s truly life-changing money off a single bet.
With an extra $14.4 million, I could fly private, rent $100,000-a-month luxury vacation homes, buy a $200,000 family car, and donate a generous $5 million to help my kids get into college. How obscene! But that's what the richest people do all the time.
The problem? Sustaining a 40% IRR is nearly impossible without catching lightning in a bottle with an early-stage startup—or three. The other issue is that investing 33% of my stable home-sale proceeds into venture capital is aggressive, especially when my target allocation is 20%.
For context, the S&P 500’s historical average return since 1926 is about 10%. Still… it’s nice to dream big even if most of us won't really change our spending habits if we make life-changing money.
The Only Real Ways to Get Truly Rich Are:
- Start rich and invest heavily to get richer.
- Invest a large sum in an asset that massively outperforms over the long term.
- Build a successful business where you own a significant chunk of equity.
- Get lucky—by joining the right startup, climbing to the top of the ranks, or knowing the right people to help you get in on a great investment
Clearly, not everyone is born rich, has the skill to build a business, the courage to buy the dip, or can invest a large sum into a risky venture. And while luck is uncontrollable, you can take steps to improve your odds, like moving to San Francisco during the AI boom.
So what's the solution to potentially make life-changing money as an investor? Consistently swing for the fences with a percentage of your capital.
Carve Out a Portion of Your Capital for High-Risk Bets
The best way I’ve found to overcome the fear of high-risk investing is to ring-fence a small portion of capital and consistently put it into aggressive opportunities. I recommend a 10% to 20% allocation.
Take 10% of your investable cash flow, savings, or financial windfalls and put it toward the highest-risk, highest-reward assets you can stomach. If you lose it all, you’ve only lost 10%. But hit a 10-bagger or greater, and it moves the needle on your overall wealth.
As wealth grows, the instinct is to play defense and protect capital. After all, you don’t want to be forced back into the “salt mines” during the next downturn. But resist going too conservative with everything. Keep that 10% – 20% high-risk bucket alive.
Some sample allocations:
- Age 25, $50,000 investable: $5,000 speculative, $45,000 S&P 500
- Age 30, $200,000 investable: $20,000 speculative, $170,000 S&P 500, $10,000 liquid
- Age 35, $500,000 investable: $50,000 speculative, $250,000 S&P 500, $200,000 real estate, $50,000 liquid
- Age 40–60, $1,000,000 investable: $100,000 speculative, $600,000 S&P 500, $250,000 real estate, $50,000 liquid
Or take a percentage of monthly savings. If you save $5,000 a month, put $500 into speculative bets. Over a year, that’s $6,000. As your income and savings grow, so do the bets.
Practice Letting Go of High-Risk Capital
I already treat my kids’ custodial accounts, Roth IRAs, and 529 plans as no longer mine. That mindset makes it easier to stomach downturns and stay the course. In fact, whenever the stock market drops, I get defiant and aggressively invest in my children’s accounts to help them build wealth.
Apply the same strategy to high-risk investments. Once you commit the money, mentally write it off. It’s easier to do when it’s just 10–20% of your capital and you still have the other 80–90% safe. This detachment makes it easier to make bets, hold them longer, and avoid panic selling.
Stay Consistent With Your Aggressive Investing
The formula for building serious wealth is simple but uncomfortable: invest large sums in concentrated positions, earn high returns, and repeat consistently. The real challenge is maintaining the discipline to keep funding that high-risk bucket year after year.
Automate contributions to your brokerage account, open-ended venture funds, and other investments. Over time, that steady drip adds up.
Readers, are you suffering from greed and dissatisfaction in this bull market? How do you ensure you’re consistently investing and hunting for potential multi-bagger opportunities? And if you’re not chasing life-changing money, how did you reach the point of being truly content with what you have? What guardrails do you use to avoid overextending in risky bets?
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I appreciate reading your perspectives and advice on investing. I am sorta over reading posts that either say “Dollar cost average into the S&P 500 and set your withdrawal rate to 4%” or say “Buy *random cryptocurrency* and diamond hands, bro.”
Your advice is not crazy nor risky nor out-of-touch with the average investor, IMO. You have clear stretch goals for your investments, but you also seem grounded. Thanks for the sample allocation framework.
(I also caught the UNH falling knife. I am licking my wounds and writing covered calls, getting my cost basis down.)
My advice to people starting out: start young, open an investment account, have a goal, trade a few stocks, make a few mistakes. Consider bad outcomes to be the cost of tuition and learn from them.
The FOMO is real in a bull market! I made a lot in 2020-2021, then lost a lot in 2022, then made it back and then some since.
There are only certain windows of time where everything goes on at once. And right now, more millionaires and billionaires are created through AI than ever before (CNBC article).
The time to press is now. Maybe up the range from 10% – 20% to 40% – 50% with new cash flow or Treasury bonds set to expire. That’s what I’m doing, while ensuring I still have lots of safety and living expenses left over (24+ months).
Wow, 3% annual fees for the fundrise innovation fund, not cheap..
Not cheap. But much cheaper than the 3% and 35% of profits (carry) I’m paying as an LP of a closed-end venture fund with no liquidity. The fee is actually 1.85% with no carrying cost, but there is an operating fee that gets waived after hitting certain investment milestones.
Nobody is forcing me or anybody to invest. However, I will happily pay a 2% – 3% fee and 20% – 35% of profits for a GP to make me a 10 bagger that I couldn’t have gotten otherwise.
In one VC fund that charges 3% and 30%, it owns Rippling at the Series A stage. I only invested $140,000 b/c that was all I was allowed to invest. But the return should be about 10X after fees, seven years later. I wish I was able to have invested much more.
Do you invest in venture capital?
“The formula for building serious wealth is simple but uncomfortable: invest large sums in concentrated positions, earn high returns, and repeat consistently. The real challenge is maintaining the discipline to keep funding that high-risk bucket year after year.”
I’ve found the formula for building serious wealth is consistent investing over time and let compounding work its magic.
Its not exciting but it’s extremely effective.
Yeah, definitely not exciting, but something standard and that we all do.
I feel life is too short for me to wait so long, which is why I left work in 34 in 2012 to do my own thing. So it’s a natural extension to try to swing for the fences with a portion of my capital so I didn’t have to wait until 60 to make life-changing money. Remember, I kickstarted the modern-day FIRE movement in 2009.
To each their own!
Great advice !!
I suspect you’re going to receive some flack for this post given you’re writing outside the norms. Normies just save and invest in index funds, so anything out of that plan is a violation of their beliefs. Norms don’t take outsized risk either, which makes them extremely uncomfortable.
But if you look at every rich person out there who made life-changing amounts of money from investing, it’s priceless because they bet big on a concentrated number of assets.
I don’t want to be an average person either, as there are so many ways and examples of getting rich today. But because so many people who write and record investing and personal finance content have no investing background, they just stick with the basics.
Thanks for sharing!
This is the only blog I read because Sam shares his real experiences, both the good and the bad and he has so much experience investing. Other blogs have no soul, no stories, nothing tangible nor based on reality. It’s obvious those other sites use use generic copy generated by AI and are simply not worth my time. Sam tells it straight and also breaks through boundaries and encourages us to think outside the box. Two thumbs up from me.
Yeah, it’s understandable if you don’t go with the majority. But as a minority since coming to America in 1995, I’m used to getting flack.
But doing things out of the norm, like negotiating a severance package in 2012, or starting a site in 2009, as helped me live the life that I want. And for that, I’m grateful.
Statistically, that attitude makes it unlikely you’ll be an average investor. More likely, you’ll find yourself on the wrong side of the Bell curve you’re hoping to be. But, “no risk it, no biscuit!”
True, but so far over the past 10 years I’ve been very lucky with NVDA, GOOG, META, TSLA, NTFLX, and Bitcoin.
I’m so thankful to have taken more risk than just investing index funds. The difference has been about $2 million.
I also bought rental properties with leverage, so that’s made a big difference.
No bet no win!
Right on, you got the biscuit!
I find it hard not to get greedy as well In a bull market. As someone who comfortably retired at 50 with about $5 million, missing out on further gains can be uncomfortable to take sometimes. So I just try and remind myself that I have enough and am already free. And that my existing investments continue to benefit from the bull market as well.
There’s an endless amount of money to make! Have to let go and be satisfied at some point.
“With an extra $14.4 million, I could fly private, rent $100,000-a-month luxury vacation homes, buy a $200,000 family car, and donate a generous $5 million to help my kids get into college. How obscene! But that’s what the richest people do all the time.”
Ummm maybe go outside and touch some grass?
Pretty obscene right? The funny thing is, I don’t think most of us will change our lifestyles and spending habits, even if we did make life-changing money from an investment.
Would you? What is a life-changing amount of money for you?
It’s always fun to daydream, especially since it costs nothing.
After dropping off the kids at summer camp this morning, I’m going to lay down on a field at Golden Gate Park, touch some grass, and reflect.
I love your information Sam. Definitely helps me frame my mindset whenever I reach or approach your level of passive income. However, as someone who does not fit your 4 ways to get rich, I wonder about other approaches to get there if possible.
Hi Cody, thanks for reading. I like the approach of consistently ring-fencing a percentage of your available capital to swing for home runs.
What way do you fit in? And what are your investment plans?
I currently follow your advice of 10% of my investable capital a month towards these riskier investments, but at times I feel like it’s kind of worthless because it’s fairly small potatoes.
For example, I recently invested about $1k in NVDA based on one of your posts at the time, and bought when it was around $95/share. I had full confidence it was going to explode, and it being up basically 100% since that time shows I was right, but I think it fits in with this article nicely about how I really needed to have a LOT more money money to invest in it for it to be life changing. I can do all the research I want to do and be right 100% of the time but until I have more to invest, it’s still not going to change much.
Bingo Cody. This is exactly my point. In a bull market, we get greedy. And even when we are proven right, we want MORE, MORE, MORE. That is the human condition.
But there are people who never invest the 10% – 20% in more speculative investments. And as a result, they never outperform the crowd. This relates to investing, career, dating, working out, etc.
So even though we’re not making life-changing money, we at least, may be outperforming those who don’t take as much risk.
And, we should spend more time being satisfied with the 80% – 90% of capital we invest in a more risk-appropriate / lower-risk way.
It’s the investor’s perpetual struggle of fear and greed.
Congrats on making a 100% return on NVDIA!
So I don’t fit your 4 ways to get rich, but yet I’m in the bucket that you define as rich. Lately you have been starting to lose me on some of your observations and recommendations – that’s fine and I love other perspectives. But I do feel u have made a major bend in your philosophy lately. I’m still read as I always do and enjoy your work so don’t take it as hate and being a troll.
Thanks Dave. And no worries. Topics change as conditions change. Can’t always write to appease everyone. I’m really more focused on the sad reality of needing a lot of money to make life-changing money.
Please remind me how you were able to make life-changing money from your investments again? BDCs I think? It’s always good to learn new ways.
What is on your mind and what would you like to read about?
Dave, would love to hear you elaborate on this as I’m feeling similarly. What “major bend” in his philosophy do you feel he’s taking lately? I feel like FS’s posts are more recently pushing (albeit not forcefully) Fundrise, curious as to your take?
Feel free to share as well jp how you’re feeling. The more critical feedback, the better. And if you have thoughts on how you are investing in this bull market, I’d love to hear them!
Personally, I’m hyper-focused on making sure my kids survive the AI crunch, so I am trying to invest in AI in a responsible manner. And given the amounts I am investing in, I need to be careful that I’m not missing anything. Meta and other tech companies are one avenue, the Innovation Fund is another, and I have several closed-end venture capital fund opportunities as well, all with $200,000+ minimums.
One of the beautiful things about life is that we all evolve at a different pace while at different stages. To learn different perspectives is wonderful, so please share!
I mentioned that I feel your support for Fundrise is brought up frequently. Not opposed to that at all, I would however like to hear more examples of other areas you’re leaning towards….for example in addition to Meta, which other public tech companies in your opinion fill the AI basket?
Got it, it’s because I recently invested heavily in the Innovation Fund, and I write about my experiences in real time. If you hang around, I’ll write about new experiences as they come.
What are some of the things you are investing in? Do you have a concern about AI disrupting your future or the future of your children? Unfortunately, this is my main concern going forward and I’m trying to figure out solutions.
I own all the magnificent seven stocks, for an average holding period of about 12 years. I’d love to learn more about you and what you are doing to make this a collaborative environment.
Thanks!
What do you think is the reason why you cannot focus on the topic of the post – the reality of needing to invest a lot of money to make a difference? Rather, you focus on what Sam is investing in. And yet, share nothing about how you’re investing and how you plan to build wealth for the future.
What do you mean by “major bend” in philosophy? I’m also a regular reader and don’t follow what you’re eluding to. I agree with Sam that it’s natural for topics to change with the times and also what’s happening in his life. We can all agree that life does not go in a straight line. Personally I love the way Sam brings his own personal experiences into personal finance topics. That’s what makes his blog so unique and fascinating to read. Very few people are willing to lay out their cards publicly, expose wounds for the sake of helping others learn and not make the same mistakes, and also sharing wins to back up his beliefs. This is what makes Sam awesome and I bet what also has led you to be a regular reader of his work too.