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Long-Term Investing Still Pays Off in 2023 and Beyond

Ronald Reid was not the typical millionaire. Instead, he lived a frugal life, wearing old coats held together by safety pins and driving a second-hand car. 

Reid, a janitor and gas station attendant, was known for his hard work and diligence. However, his family and friends were surprised to learn that he had accumulated an $8 million fortune by investing in quality, dividend-paying companies.

Reid’s portfolio included shares in 95 companies, including Procter & Gamble, JPMorgan Chase & Co., and Johnson & Johnson. He held onto these investments for the long term, and many of the companies he invested in increased their dividends year after year.

Reid’s success as an investor was due to his patience more than anything else. As Warren Buffett once said, “the stock market is a device for transferring money from the impatient to the patient.” While Reid’s investments were savvy, his ability to wait and hold onto them was what really paid off.

Today’s investors have an advantage that Reid did not: access to pre-IPO companies. For 79 years, the U.S. Securities and Exchange Commission (SEC) prohibited non-founders and other company insiders from investing in a company before its IPO unless they had a consistent income of at least $200,000 or a net worth of $1 million. 

This law aimed to protect unsophisticated investors from scams, but it also prevented investors like Reid from potentially profiting from exciting startup companies.

However, Washington has now lifted the ban on access to pre-IPO companies. As a result, retail investors can now invest in some of the most promising startup companies in the world through new platforms. These platforms allow investors to buy shares alongside venture capitalists like Kevin O’Leary and Howard Marks.

Access to these pre-IPO companies is one of these platforms’ advantages. They also provide investors with connections in Silicon Valley, which can be crucial for making profitable investment decisions. 

For example, Peter Thiel, who made a $1.1 billion profit on his investment in Facebook, acted on a tip from his network of contacts in Silicon Valley.

Investing in pre-IPO companies can be risky, and investors should only risk what they can afford to lose. However, for those willing to take the risk, platforms offer an exciting opportunity to invest in some of the most innovative companies in the world. 

Ronald Reid’s story is a testament to the power of long-term investing, and with the lifting of the ban on pre-IPO investing, more investors may have the opportunity to follow in his footsteps.

JP Buntinx
JP Buntinx has been writing about cryptocurrency since 2012. His interest in crypto, blockchain, fintech, and finance allows him to cover a broad range of different topics.