Disclaimer-not investing advice, for informational and entertainment purposes only.

Selecting stocks to invest in

I generally suggest investing in SP500 (or if being more risky, Nasdaq 100) because selecting good stocks takes a lot of knowledge and it takes more time to learn how to be a good investor, more than the space of this website. It took 15 years before I really deeply understood the difference between an investment and a speculation (even a long term one.) However, many good investments will be down on a random given day, month, year; it took Tesla nearly a decade to start moving up significantly (and smart investors continued to put money into that stock over that decade and became very rich off it) I wanted to invest in Tesla in 2006 when it first made national news and I was familiar with the electric sports car concept, having previously worked with a similar company that didn't wind up doing much after.

First, you should learn the fundamentals and if you're going to invest in individual stocks; focus on companies that are financially sound and fairly priced relative to the business they have (though "high p/e" companies that have been trading for a while are simply profitable companies who have had so much market interest that the price rises beyond a typical valuation based purely on earnings.) William O'Neill's 'CANSLIM' method is a good way of limiting it to quality companies. If attempting to predict the market with chart analysis or indicators, which was far more effective 20-25 years ago; Dan Zanger's Chartpattern.com and the book 'Encyclopedia of Chart Patterns 3rd edition' are excellent resources.

One reason Sp500 is encouraged for investing long term rather than individual stocks is valuation and deciding who is right, the market or the fundamentals. S&P 500 does a great job of bringing in new talent and getting rid of stuff as it starts to fade. The average success lasts 20 years, almost nothing lasts forever. The model portfolio example I give is the list of companies that are strong growing businesses in growing industries, profitability is not their strong suit; hence why I advocate S&P 500/Nasdaq 100 and also offer a dividend portfolio example as well.

Kevin O'Leary of Shark Tank said one of the best investments he made on the show was a cat DNA testing company, it turned out that the company had reems of data of cat DNA and were bought out for that rather than the DNA testing service. So, you never know when something will benefit you out of the blue.

Future Growth Portfolio (2025 - 2050)

This portfolio assumes an initial investment of $1,000 in each stock across three growth scenarios.

Total list of stocks I think have potential for massive future growth as of early 2025: C3.ai (AI), Allegro MicroSystems (ALGM), Ambarella (AMBA), Beam Therapeutics (BEAM), CrowdStrike (CRWD), Coreweave (CRWV), Duolingo (DUOL), GlobalFoundries (GFS), Lattice Semiconductor (LSCC), MercadoLibre (MELI), Intellia Therapeutics (NTLA), Olo Inc. (OLO), Palo Alto Networks (PANW), Palantir Technologies (PLTR), D-Wave Quantum (QBTS), Redwire Corporation (RDW), Recursion Pharmaceuticals (RXRX), Shopify (SHOP), Super Micro Computer (SMCI), SoFi Technologies (SOFI), Veritone (VERI).

"Acorns" these stocks have massive potential but are small now, a tiny investment may be a wise decision and may grow into a massive amount; but it's not necessarily like Amazon in 2002-it could just wind up squirrel food (so I wouldn't invest all that much.) QBTS, LUNR (possibly more to come)

AI revolution

When I was in high school, the dot com boom was in full force; most failed and a few became trillion dollar companies. Currently, the AI revolution is big and I don't doubt that AI will change our lives like social media did 15 years ago and the internet did 12 years before that. An AI focused portfolio has some benefit, my picks for AI include: AI, SMCI, PLTR (despite it's large market cap), ALGM, CRWV, GFS, AMBA & VERI (despite it's negative operating cash flow.)

Putting it all together

If I allocate 30% of your long term growth investments into a portfolio of stocks such as the ones shown here (either the weighted portfolio or the $1000 each portfolio), 70% in a 60/40 mix of sp500/Nasdaq100; and the remaining investments are dividend stocks for income-the expected value 10-30 years down the road is quite substantial. If I have enough capital, I can take loans against the index investments and invest in angel investments that I believe I can identify those that will make 10x their investment 70% of the time in 5-7 years. The risks are interest on the loan (currently these are around 8%, though I've heard they've been as low as 2% for UNHWI's that are in high demand; ie companies courting their business), risk of business failure (this comes down to the skill of investor, market changes, number of investments made.) In a worst case scenario computer analysis where the portfolio goes to zero and the angel investments all fail, the index carries the day and the portfolio is still worth 15x the initial investment in 30 years. If the portfolio and angel investments do well, then it's 3-5x that number. Personally, I like the idea of angel investing as it encourages new ideas; as well as the notable QSBS tax incentive. I examined the numbers if I took out a 2% management fee and 20% performance fee (ie standard hedge fund fees), it would still make at least 12x initial investment in 30 years with worst case scenario and 55x in best case scenario; highlighting how I'd put together a hedge fund and how it might perform based on forward looking calculations. If this was my retirement nest egg, the only risk that could damage it would be catastrophic world events; investing in farmland, real estate in multiple safe countries, gold in a vault in a safe nation known for neutrality and stable banking; these would protect from all but the worst of worst case scenarios (some billionaires invest in underground bunkers, even if it was effective to own a condo in one of the best doomsday bunkers; you'd still have to get there and in the event of nuclear war that's unlikely.)

Why can't mutual funds beat the market

Mutual funds often fail to beat the market due to structural constraints and incentive misalignments. They're required to diversify broadly, which dilutes exposure to the few companies that generate the bulk of long-term returns. Fund managers face pressure to "hug" benchmark indices like the S&P 500 to avoid career risk, limiting bold, concentrated bets that could generate outsized gains. Additionally, they must accommodate investor redemptions, often forcing them to sell during market downturns, and they typically incur higher turnover, leading to transaction costs and taxable events. Even before management fees are factored in, these constraints make it difficult for mutual funds to consistently outperform low-cost index funds or well-executed personal investment strategies focused on long-term industry leaders. Hedge funds are in a different position and in many cases their fees (2% of capital and 20% of performance) are enough to reduce their performance to below that of the sp500.

Strict rules portfolio

I call this the strict rules portfolio because I think it will miss some opportunities, but it has potential. I set uo a screener with most of it, simply check which stocks it states have revenues of 100 million or more and positive operating cash flow; other than that simply make sure the market cap is near your range and double check their numbers. This consists of market leaders of among the fastest growing segments/sectors/industries, with market caps around $2 billion (or a little lower); up to $20 billion or a little higher. Revenue over 100 million, growing at least 20% annually the last 5 years. A PEG ratio below 1.5 is ideal (1 is fair value) but a PEG ratio below 2 in this screener because it doesn't have a 1.5 option. I set it to all USA companies (the vast majority of the small companies that become huge are USA based, of the few giant non-US companies they're usually companies that went public in the giant cap status anyway; 40% or higher gross margins for a tech company (20%+ may be okay for retail/consumer) and positive operating cashflow. Using this screening it gave me: SOFI, PINS, UPWK, CPRX, RMBS, CART. Two that meet many of these criteria but are higher market cap are MELI and MPWR, both still great companies; NVDA is a huge company and still meets most of these criteria other than being larger than the ideal market cap (by 150x.) In NVDA's case, in 25 years it's entirely possible it could be one of the giants of tomorrow and the top 10 market caps of 2050 could very realistically be 10 trillion to 25 trillion (best case scenario would be 3-6x in 25 years, which is extremely optimistic but not unrealistic.) PEG ratio only works for profitable companies, so this makes it extra strict; but PEG of 1 or lower implies it's fairly valued. You can adjust the screener to remove PEG as it's such a strict metric during growth, another option is replacing gross margins with operating margins above 10%.

Testing out the stock screener without PEG yielded a lot of fruit, within the general range it included such well known companies as ETSY, WING, U, MRNA, CELH, ROKU, TEM, HIMS, SNAP, AFRM, TWLO, DOCU, RDDT, DUOL, ZS, DDOG as well as well known companies that I wonder if they're a one trick pony such as PTON and CROX. I entered all of the companies I listed as potential industry leaders and those with data that matched my criteria with recognizable names and asked AI to rank them by growth rate, limiting it to companies between 2 billion and 20 billion market cap. Of all the companies on this page, it listed SOFI, AMBA, AI, & QBTS, make of that what you will. Another stock that came up in my research was ROOT, worth researching. None of these are an endorsement or discouragement, simply my opinion.

Dividend Portfolio

The above portfolio has steady increasing dividends and should yield 6.24% in steady payments year round based on yields at the time of this writing, no ethical considerations are taken in with Altria (a tobacco company) but purely financial considerations; as it's a strong dividend payer in months that are harder to fill. The reasoning behind dividends is that it gives steady yields that work for consumer spending, the Trump tax cuts on dividends will likely become permanant this year and they've been increasing the 15% tax threshold annually to keep up with inflation. If dividend stocks keep up with dividend tax law, you may keep the same tax rate despite higher earnings; dividends on index investments like SP500 or Nasdaq 100 are much smaller but can be reinvested (even if they wind up in a higher tax bracket, the long term compounding will more than make up for it.) If AT&T's yield rises to around 7% then it may be worth adding to the portfolio if there's no underlying problems, but currently it's around 4% which is historically low yield for AT&T (T) so it was replaced with VZ in the current portfolio. AT&T's low yield isn't a bad thing, they've continued to raise dividends; but the stock price went up which means you have to pay dramatically more for those dividends (thus decreasing yields.)

Real Estate

There's more on real estate in personal finance, but I wanted to point out something cool. Commercial real estate usually requires you to put up 40-50% of the purchase price (really should be 10% for both commercial and residential, but I digress) but if you can increase the value, you may be able to get the entire purchase covered. In residential, this is usually done with repairs; you might put $5k into a property and increase the value by $30k. In commercial real estate, if you find a quality property that has few or no tenants; it's worth far less than if it was mostly occupied (though, generally if they can avoid selling in this situation; they probably will.) If you can get it fully occupied, then the value increases; though you may need to be able to take control before appraisal for lending (ie take control once the property is under contract and know how to fill the property within 90 days, perhaps some large commercial deals take longer.)

Analyze your local market and see if fixing and flipping is right for you, it's very possible to make serious short term gains that are taxed as ordinary income without payroll taxes (so, it's better than self employment tax rate.) If you buy a house, it's your personal primary residence and you sell it 2+ years later (you must reside there 2 of the last 5 years); you can make $250k tax free. If you have a roommate to help pay for mortgage/utilities, you may still qualify for the full $250k exemption if you don't depreciate the portion of the property rented out (ie no depreciation) but you'll need to consult with a tax attorney. If you don't have enough capital to flip houses, you may want to get a realtors license so you can sell houses and make income tied to values of local houses; or look into wholesaling (ie get a property under contract for a low price and sell the contract to an investor for a higher price.)

If you can't get property rezoned, r2 allows duplexes and r3/r3b allowes triplexes and quadraplexes. If a market doesn't have many multi unit properties, you may consider building them; as once the upfront part is done and the other units are rented out 3-4 units can pay for itself and give you 1 unit paid for.

Another real estate idea I had is for a group of 16 households to seek out 5+ acres of subdividable land with access to utilities (water, power, sewer) and get it rezoned to 16 residential lots (if you did more, the land lots could be sold as soon as roads are built or save it for later; could offset some of the costs.) You might have 16 people build a house together and then refinance it and build the next ones, much like how the Amish build barns. A 1200 sq ft concrete block home in my area runs $350k easily, but you're looking at $2000 worth of concrete blocks, $7000 in windows, $32000 roof (less if a group knows how to build a roof), $6000 slab, painting/landscaping/architecture could be relatively affordable, as is tiling and drywall, wiring and plumbing. A quick look found a potentially viable property for $200k for a road and all 16 houses on a road with utility access, if subdividable (or you can get it rezoned) it may be well worth it. You might be able to put all that together for under $120k each house including permits as you'd be doing the labor yourself. For this street, road, water, sewer, power could all be put in for $500k ($31k each); if utility company or city won't do any of that for some sort of utility/tax basis agreement but may be financed as it increases the tax basis and they'd still be reimbursed. If the land was larger, you might develop the opening street first but have it subdivided to allow more later. You can refinance and pull cash out, you can sell it in 2 years and have $250k (or $500k for a married couple); remember this is 16 people that now have a way to become prosperous and may choose to continue to work together to grow that prosperity. You may all find you love construction and build houses for others, or if there's more land build new houses for when you sell these and make $125k/yr tax free (ie sell each 2 years, $250k tax free for personal residence as long as the government doesn't declare the activity a business.) An unmarried couple could each sell their own home every other year and potentially make $125k each year per person in a nice steady fashion if the group expanded and initially bought a land plot that allowed later expansion. Early on in the project they could build 4-plexes, refinancing once rented out to 4 people (possibly housing everyone until their own houses are built) and once it's time to sell their primary residence they move into the 4 plex. You can get an FHA loan on a 4plex (the most units they'll lend on, above that is considered commercial and you can't get 80% financing) and you could have 4 units of 3 bedrooms in a high rental market so 4 units each have 3 roommates each and you have less risk of missed rent (another way to prevent missing rent payments is section 8 renters, talk to multiple landlords who do that to learn the pros and cons of it.)

Inflation

Inflation is ever present, with the monetary supply increasing 10% annually; it's inevitable. That being said, it's not the horror that it's often made out to be. The 2 components to hedging normal inflation are simply owning your own home and having employer provided health insurance until old enough for medicare. Outside of that, things like gas, groceries, clothes, travel, and entertainment; pale in comparison because they represent such a small portion of expenses. Part of the reason for this is that technology represents a high percentage of spending and has gone down in price while increasing dramatically in quality over time. If concerned about hyper inflation, gold, silver coins, bars of soap and farmland would all be good hedges against this apocalyptic worst case scenario. One job that keeps up with inflation may be realtor (especially during low interest rates) because you get paid based on the house sale price. Wages seem to rise at 4% or less and the size of large corporations seems to grow at 8%, the average wage in 1895 was $400-500 and is now $66k; in that same time frame each $100 in market cap of the top 10 companies of the time would be $2 million in market cap of the top 10 companies of today. The tools for limiting inflation are the Fed's control of interest rates, government control of taxes (you need dollars to pay taxes, those dollars maintain value in part for their ability to pay taxes) and the third influence on inflation is oil prices (if oil prices go down, then inflation often goes down as well.) While not a tool for controlling inflation, one of the reasons for arguing against reintroducing bills larger than $100 (in 1969, $500 to $10,000 notes were officially discontinued from production) because it may imply runaway inflation.

Retirement planning

The best steps to planning retirement are owning your own home, a roth IRA and a 401k with company matching. If your company does not provide those, you may be able to form a corporation and have a 401k or use a SEP 401k. What to invest in? On a small scale, low fee SP 500 index funds; works great for a relatively new Roth IRA. When an account is larger, I prefer a combination of 30% Nasdaq 100 and 70% SP 500. The Nasdaq 100 is a bit more volatile but grows at a faster rate since inception, the SP 500 is more stable; the most risk I’d consider is 60% SP 500 and 40% Nasdaq 100. This should yield 11.4%-12% annually. It takes the long term to average close to this, might be up more or even down in a given year, dollar cost averaging generally leads to lower risk of being down for any prolonged period.

Dollar cost averaging is key, it actually won a Nobel prize. If you put in a lump sum at any given time, it may go up or down. If it goes down, you might be down for a while. If you dollar cost average, based on sp500 index over the long term (30+ years) you'll rarely be down more than a couple years and very quickly return to the long term expectation of 8-10%+ annual returns. If you invest in sp500 in a lump sum, there is no point in it's history where you'd be down over a 20 year period; but the goal is to make annualized compounded returns.

A corporation (you can form a corporation) can match your contributions to a 401k, if taken to an extreme you can contribute 23k and they can contribute up to 46k up to 25% of your income; though this is rare except when you form a corporation to do this for yourself (if you have other employees, they're probably allowed to match as much; so you have to be careful as that could get very expensive.)

If you invest $10/day from 18-22 at 10%, that grows to a million by age 65.

A mere $985/month from 18-25 invested at 10% would mean having a 20% down payment on a $450k house at age 25 and $1 million in a Roth IRA by age 65. That sounds agressive, but if you're living at home with parents you're likely saving $1200 a month compared to rent at most small apartments. Of course, the main benefit to putting 20% down is saving a small PMI payment; if you save $580/mo from 18-22 you could put 3.5% down on that same house and fund the retirement account (very similar to the above example.)

"'Cash is king' was probably said by a chess player, the goal of chess is to protect the king (and capture your opponent's king. . .aka cash)" -Ben Gfrorer

Family planning

If you plan to have a kid, put aside $6700 into SP 500 in their name (probably in a custodial account) as a gift upon their birth (that's less than the emergency room costs) and when they turn 65 it should be $1 million. Putting $3/day aside for 5 years gets you there at 8%, I think most people would be willing to put aside money for a few years if it meant having a great dog; so it's not much of a challenge for someone who believes themselves responsible enough to bring a child into this world. If you have a kid and put $1 a day into sp500 and get 10% for their 10 years, that will reach the same amount that $6700 at birth will; invest in your kids future. If only getting 8%, then you would need $3/day for their first 10 years ($3 is the same as a bottle of water, candy bar, energy drink at a vending machine these days.) Taking it further, $20,000 in SP 500 at birth (or $9/day for 5 years until they're born, think of it like saving up for a kid) would give them money for their first car at 16, college at 18, down payment on a house at 25 and still be a million dollars at 65. A mere $2 a day for a kid until they turn 4 becomes a million if yielding 10% until age 65, it's crazy how little that is.

Conversely, for those who do not wish to have children, permanent solutions like vasectomy can be considered, with reversals or reproductive material storage as options. For ladies it’s not as easy, as getting tubes tied has higher risks than male vasectomies, IUDs can be dangerous, birth control changes brain chemistry.

529 college savings plans or child tax credits are also great options to look into.

Taxes

I've already mentioned business opportunities and retirement accounts that offer tax breaks, real estate has some good ones too. On your personal residence, you can make $250k in tax free profit as long as you live there for 2 of the last 5 years; if you structure your home purchase around this then you could make some nice tax free gains. Of course, there's deductions of interest and depreciation. There's also the 1031 tax deferred exchange, some people keep buying and reselling until they pass away and never lose money to taxes on these gains; I wish this could be done in the stock market.

Section 1244 stock is a stock transaction pursuant to the Internal Revenue Code provision that allows shareholders of an eligible small business corporation to treat up to $50,000 of losses (or, in the case of a husband and wife filing a joint return , $100,000) from the sale of stock as ordinary losses.

These videos show some aspects of how private equity works