FIRE Investing Retirement

How Much To Diversify?

As per a previous post, I only own 7 investments in my retirement portfolio.

Not exactly diversified, I guess.

I think the general consensus is you should own a broad spectrum of stocks or some kind of market or index fund to really maximize your diversification in the long run.

But, how many stocks do you really need?


I recently read this article that states you should own about 30 stocks to be diversified, but it also suggested that owning 12 to 18 stocks would give you 90% of the benefits of diversification.

For me, 30 stocks is a lot. I would have trouble tracking that many investments and would most likely loose interest. 12 to 18 is more reasonable, and as it turns out, you would still get some decent diversification.


There are two types of risk – ‘market risk‘ and ‘firm-specific risk‘.

Market risk refers to the general movements or trends of the markets and you can’t do much about it expect be patient.

Firm-specific risk refers to ‘uncertainty of a specific area of the market or even a specific stock.’ – it is the inherent risk in one individual company because of the business it is in.

Diversification can help reduce firm-specific risk – by owning multiple different companies, the hope is that the ‘ups and downs’ of each company will offset each other over the long term.

Diversifying can also make up for a lack of knowledge in any specific business sector. You can buy multiple different sectors and hopefully, losses in one sector will be offset by gains in another.

But, I think if you end up owning more stocks that you need, you may as well just own a mutual fund or ETF, unless you enjoy researching lots of investments.


At the age of 40, I made a startling realization – I was far behind in my retirement goals.

Throughout my 20’s I had made some financial mistakes and in my 30’s I took mini-retirements or sabbaticals (I’ll make a future post on this) and found that my retirement portfolio was not what it should be.

I realized that I did not have time on my side. It dawned on me that I would not be able to take advantage of diversification as I would had I been in my 20’s. My time horizon just wasn’t that long.

So, I made a decision to increase my risk profile substantially, and I decided to focus (mostly) on technology. I also own a banking ETF and a utility. That’s it.

Oh, and I also really like dividends.

I think it’s also important to enjoy what you do. I really enjoy reading about technology. I don’t think I could invest in something that did not interest me.


It’s actually worked out quite well for me.

Sadly, I don’t own AMAZON, but I’ve done well on Applied Materials (AMAT) – it supplies equipment that makes semi-conductors plus it pays a dividend. I really enjoy reading about this company.

While I still cannot retire, it has turned into a decent nest egg.

Managing the portfolio is also not a chore since I have so few stocks and I enjoy researching them.


Warren Buffet said, ‘diversification is protection against ignorance. It makes little sense if you know what you are doing.’

Do I know what I am doing?

At the start of my investing journey, I would say ‘probably not’ but now that I am older and wiser, I think I am better equipped than if I stayed with mutual or index funds.

The best hedge against ignorance is to educate yourself and just take action.

If you’re younger, I would say, just buy index funds … but if you’re older like me, and you’re willing to educate yourself, you may want to take a few extra risks.

As it turns out, you actually don’t need to have a mass of stocks in your portfolio.

Career FIRE Personal Development Side Hustles

Personal Mission Statement

For years, I chased the high salary and job title – I also chased the money. I went to school and it was drilled into me to get a good management position. So, I did that – I went from job to job and tried to improve my title (and pay) with each new company. I started as an Inventory Clerk, then Accountant, to Accounting Manager and then finally, Controller.


And then one day, I knew I was done. It was over. I knew that I would no longer continue on to the next logical step – CFO. I was burnt out.

For a long time, I did what I was expected or whatever people thought I should do. I worked in some jobs that made me dread getting up in the morning, but they were ‘good jobs’ and looked even better on my resume. The media bombards us with images of what success is supposed to look like and don’t get me started on peer pressure and other people’s opinions and expectations – I thought I was successful. I was somewhat part of the rat race, I guess and didn’t listen to my own needs, wants or desires. I needed a change or a way to help shepherd me through trying times.


So, I developed my own Personal Mission Statement.

What is a mission statement? I guess you can say it’s a set of overall goals for a person or organization – it’s a statement of purpose. It’s like a rudder through a storm or a way to guide us down a winding road when you can’t see what’s around the next bend.

Here is my current mission statement and it consists of 3 sentences:

1.) I want to see new things.

2.) I want to meet new people.

3.) I want to learn new skills.

That’s it. If you notice, there is no mention of money here. Obviously, money is important because we have to pay bills but it is no longer the single driving force in my life.

I’m sure my mission statement will change over time but it has definitely affected how I live my life. I am still a Controller because, to be honest, I have a mortgage to pay, but I now work in a good, small company where I enjoy going to work each day but who knows what will happen next?

It’s a process. I have now started side hustles and my next opportunities or life experiences will be guided by my mission statement.