Glen Ho's 2 Golden Rules for Smart Investing

Investing your money can feel like walking on thin ice if you don't know what you're doing. It's easy to make a wrong move and lose hard-earned cash. That's why listening to people who've been there and done that successfully is essential. One such person is Glen Ho, who is no stranger to investing. With years of experience, he stresses that to make money through investments, you can't just rely on luck or quick fixes. You need a solid plan and careful thought.

Glen Ho's way of making smart investments isn't about guessing; it's a well-thought-out method. He lays out this approach in the "2G System." It combines clever ways to manage your different investments, known as your "portfolio," and a two-step strategy to pick the best opportunities for your money. So, if you're keen on making your money work for you, read on and learn how Glen Ho does it.

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Portfolio Sizing

When it comes to investing, Glen Ho says one of the most important things to consider is "portfolio sizing." Now, what does that even mean? Well, it's pretty simple. Portfolio sizing is about how much money you decide to put into each investment. Glen points out something that might surprise you: you can lose money on most of your stocks—say 7 out of 10—and still make a lot more money overall.

How is this possible? It comes down to how big your wins are on the few stocks that do well. Let's say you have ten stocks. Even if 7 of them don't make money, the three that do can make up for it and more if they perform well. In this way, you could still end up with four times the money you started with or a 400% net gain.

This brings us to a saying you've probably heard before: "Don't put all your eggs in one basket." In the world of investing, people call this "diversification." Instead of putting all your money into just one or two things, you spread it out over several different types of investments. If some don't work out, others might do well enough to make up for it. Glen Ho emphasizes the importance of diversifying your portfolio to increase your chances of success, even if some investments fail.

Glen's Two Golden Rules

Glen Ho knows that investing can be tricky, so he has two golden rules he thinks everyone should follow. These rules are simple but super important.

Rule No. 1: Don't Lose Money

It may come as a surprise, but many individuals make this mistake. This rule is about being extra careful when putting your money into stocks or real estate. Glen says you should never make quick, impulsive choices. 

So, if you're feeling emotional or rushed, take a step back. Ensure you've done all your homework on what you're considering investing in. That means looking at all the facts and figures and talking to some experts.

Rule No. 2: Always Remember and Apply Rule No. 1.

This second rule stresses the importance of the first. It is a constant reminder that losing money should be avoided at all costs in any investment strategy.

The 2G System: A Smart Investment Strategy

Glen Ho has a two-part system he calls the "2G System" to help you invest your money smartly. The two G's stand for "Focus on Good Businesses" and "Generate Instant Cash Flow Every Month." Let's break it down.

Focus on Good Businesses

Glen says the first thing to consider is how solid the company is. Is it a good business? Does it make money consistently? If it does, then it might be a good pick. He's got a few tips to make sure you're choosing wisely.

  • Do Your Research: It's easy to listen to friends or some guy on the internet who says a stock is hot. But Glen advises against that. He says you should dig deep into the company. Understand what they do, who their competitors are, and what their future might look like. That way, you choose based on real information, not just gossip.
  • Predict Business to Predict Stocks: Glen believes that if you understand a company — how it makes money, what challenges it faces, and so on — you can make educated guesses about how the stock price will move. So, the better you know the business, the better your chances of picking a stock that will make you money.
  • Consistency Is Key: Look for companies that have been making money for a while, not just those with a good month or two. Like Warren Buffet says, "Risk comes from not knowing what you're doing." So, the more you know about a consistently good business, the less risky your investment will be.

Generate Instant Cash Flow Every Month

Glen's second point is making your money work for you. He doesn't go into too many details, but the idea is simple. You should invest in things that give you a steady monthly income. This could be stocks that pay you dividends, bonds, or even properties you can rent out. When you have a regular income coming in from your investments, it not only makes your day-to-day life easier but also adds value to your assets over time.

Informed Investing Is the Way to Go

Glen Ho strongly says that to succeed in investing, you need to know what you're doing. You don't just throw your money into any old stock or asset; you pick them carefully. How do you do that? By zeroing in on businesses that have solid foundations. Companies that are stable and make money consistently are usually better bets.

But Glen also talks about spreading your investments around a bit. That way, you're not banking on just one thing to make you money. This could mean adding some stocks that pay you dividends or even branching into other kinds of investments like bonds or rental properties. The idea is to have different kinds of income coming in, so you're not dependent on just one thing.

The key takeaway is that making smart choices today will help you in the long run. Markets can be shaky sometimes. Prices go up and down, and sometimes, things can look pretty bad. But if you're making informed choices, those ups, and downs won't shake you as much, and you'll be set up for success over the long run.

If all of this interests you and you want to learn more, consider signing up for our Next Level Academy Free Masterclass. It's a golden opportunity to hear from experts and learn the ins and outs of making money through smart investing. So why not take that next step toward building a stable, financially secure future for yourself?

Further Reading