A. It is true that most billionaires achieved their wealth through heavy concentrations of their investment, at least during their initial growth periods. What's the appropriate retirement saving strategy for one to consider? You can refer to the following Bush Strategy vs. Redwood Tree Strategy:
The Bush Strategy is to diligently save everything month and put that money into a well diversified portfolio. Even if you only invest $300 a month, at 8% annual growth, after 40 years, you will be a millionaire too. If you could maximize the annual $18,000 contribution, you will be a multimillionaire.
Redwood Tree Strategy
However, if you want to achieve more than $5M or more, diversification will not help. You need to use the Redwood Tree strategy - concentrate during your growth stage, once you accumulate a sizable amount, it's time to diversify. However, the Redwood Tree strategy surely has its risks, otherwise, every tree will become a Redwood tree.
Bush Strategy or Redwood Tree Strategy - which retirement saving strategy will you choose?