Wealth Wisdom: 5 Tips for Simplifying Your INVESTMENT PORTFOLIO


Many Americans dream of becoming millionaires. Most self-made billionaires reach this milestone by starting their businesses and investing via hard work, patience, and discipline – but the work doesn’t stop there. Simplifying investment portfolios is also part of the process, as it allows you to continue building wealth and increasing your bank account balance.

Keep it Simple

Gene Caballero, co-founder of GreenPal and a self-made millionaire, said he prefers to diversify across broad industries rather than complicate his portfolio with too many specific businesses or funds. “By selecting a few well-chosen index funds or ETFs — exchange-traded funds — I can effectively cover the market, which reduces the need to manage numerous individual investments,” Caballero added.

Consolidate Brokerages

Alissa Krasner Maizes, Esq., founder and registered investment advisor at Amplify My Wealth, stated that as a self-made billionaire, she simplifies her investment portfolio by consolidating her accounts under “one financial roof,” where they offer low-cost ETFs and mutual funds wherever available.

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“For example, former employer accounts and other investment accounts are at Vanguard, except my Health Savings Account with Fidelity — Vanguard does not offer HSAs,” she stated. “Consolidating and prioritizing lower fees also enables me to keep more money.” Ann Kaplan, MBA, Ph.D., founder of iFinance and television show at Ann Kaplan, agreed that having two or more brokerage accounts can be difficult to maintain.

“Consolidating as many of your accounts as possible can simplify managing your investments,” she stated. “You don’t need to diversify your management; instead, focus on diversifying what’s in one portfolio. How do you make your decision? Consider factors including performance, track record, costs, and underlying assets.

Work With a Fiduciary

Another tip is to engage a fiduciary financial counselor, who is legally required to operate in your best interests like GreenPal’s Caballero did.

“This professional has been crucial in streamlining my portfolio management, ensuring it aligns with my long-term financial goals and remains free of unnecessary complexity,” he stated.

Streamline Your Finances

Self-made billionaires have a distinct approach to organizing their affairs, according to Ravi Moolchandani, AFP, primary financial advisor and main director of Radiance Wealth.

“All their estate planning, taxes, investments, and income are embedded in a strict culture, as they have gone through their hard ways to create and protect their wealth,” he stated.

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Overall, this method can lead to account minimization, tax-efficient investing, downside protection, and the engagement of financial advisors.

Count Your Holdings

Some self-made millionaires argued that having too many holdings would be difficult to manage.

“It is suggested that 25 to 30 holdings may be the maximum number of investments before requesting a fund manager,” Kaplan stated. “That is the suggestion, but the good news is there are steps you can take to slim down your portfolio without negatively impacting its performance.” Furthermore, Kaplan advised taking a close look at any equities that account for more than 5% of your total portfolio.

“Should any of the stocks account for 10% of your portfolio, that could be considered a risk,” she stated. On the other hand, if you believe you’re well-diversified and the majority of your stocks make up less than 5% of your portfolio, “you may be holding onto and managing a portfolio of immaterial investments — investments that take your time to oversee or that you don’t bother to oversee — and they become a drag on your portfolio,” she added.

Final Words

Experts believe that simplifying investing portfolios is critical for wealth creation. Gene Caballero and Alissa Krasner Maizes recommend broad diversification and consolidating accounts to reduce fees. Engaging a fiduciary advisor and simplifying money can help you achieve your long-term goals. Self-made millionaires emphasize the significance of manageable holdings for successful portfolio management and performance.

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