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Start a Speculative Fund

No matter how much you invest, a percentage of your portfolio, up to 10%, should be for speculative investments. Investing is like a muscle, the more you use it the stronger you will be and the more comfortable you will be doing it.

Because of what you already do in your daily life, you may be an expert in a particular field: be it the industry your job is in or maybe you love shopping and can tell when a new brand or store is taking off.

Assuming you’ve taken our other FiClub advice and have improved your income and trimmed some expenses that were wasting money, you might feel like you’re on track to meeting retirement savings and other goals with a steady and wise plan. Basically, you’re following the financial doctor’s recommendations and eating your boring broccoli to be fit and healthy. Just like with overly strict diets, people sometimes break-down in their financial plans if they don’t reward themselves with the occasional treat. That’s where having a speculative fund comes in to introduce a bit of excitement into your personal finances. The good news about having a speculative fund is you can make a much bigger gain and potentially much faster, than with your regular longer-term “safe” investments.

Love Tesla, or Facebook, or H&M? Did you love them early on before your friends and colleagues even knew they existed? Follow your gut. You have a unique point of view, and are on the front lines of your life and what you see has enormous value.

Investing in a company you believe in or one you like, means you can get deeper into it and become not just a consumer, but an owner of the company. And as an owner you can share in the financial return.

For example, I invested early on in Netflix (NFLX) – I noticed the mailperson’s bag was filled with red envelopes. I asked her how popular were those Netflix envelopes and she said more and more people were adding the service every week. As a customer I knew they had a unique service and that downloading a movie was also an option with more and more movies. I invested around 2010 at around $8 a share. Today the stock is over $200. That’s almost a 3,000% gain. Not bad.

Not every one of your picks will be a success, but with only 10% of your portfolio invested in “your ideas”, you will never go broke following your heart, head, and gut. And when you do get a winner, you will feel like an investment pro – in fact you will be an investment pro!

Like many things, the more you learn about investing the less of a mystery it will be, and the better questions you will ask your financial advisor or company. You will become more involved in all your investments and that can only bode well for your current and future returns.

So go ahead, transfer up to 10% of your portfolio to a cash fund, and when you’re ready with your next idea you can click your mouse and partake in one of the most important areas of your life. How fun is that?! And don’t forget to update your LinkedIn page with “investor” after you do!

Enjoy a little desert with that healthy and balanced investing meal, and good luck!


Richard Dimaio, our guest blogger, has worked for many start-ups, in the Bay Area and in France. Investing is a hobby that has provided a lifetime of entertainment as well as having recently paid for a bathroom remodel and a sports car. You can find him here on LinkedIn.

Disclaimer: FiClub does not recommend the purchase of any securities discussed in the article. They are included for illustrative purposes only. Past performances are no guarantee of future results. Please consider the facts and circumstances of your individual situation prior to making any investment and speaking to a qualified professional about a suitable investment strategy and asset allocation.

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