I just inherited $5 million from my grandfather. I'm 35, make a good salary, and don't need this money to live. It's pure opportunity capital. My financial advisor wants me to put it in a diversified portfolio—index funds, bonds, some real estate. "Slow and steady," he says. "In 30 years, this could be $30 million. Don't gamble with your grandfather's legacy." But I've been studying markets for years. I see opportunities he doesn't. Tech is transforming entire industries. There are companies I believe in deeply. I could concentrate my bets and potentially 10x this money in a decade—or lose a significant portion. My grandfather built his wealth by taking calculated risks on specific businesses he understood. He didn't diversify; he concentrated. My advisor says that's survivorship bias—for every grandfather who succeeded, ten lost everything. I don't need to preserve this money. I could afford to lose half of it and still be fine. But is that permission to speculate, or is it precisely the thinking that destroys wealth? — The Windfall Inheritance in Greenwich
With life-changing money, do you consolidate and preserve or concentrate and multiply?
I just inherited $5 million from my grandfather. I'm 35, make a good salary, and don't need this money to live. It's pure opportunity capital. My financial advisor wants me to put it in a diversified portfolio—index funds, bonds, some real estate. "Slow and steady," he says. "In 30 years, this could be $30 million. Don't gamble with your grandfather's legacy." But I've been studying markets for years. I see opportunities he doesn't. Tech is transforming entire industries. There are companies I believe in deeply. I could concentrate my bets and potentially 10x this money in a decade—or lose a significant portion. My grandfather built his wealth by taking calculated risks on specific businesses he understood. He didn't diversify; he concentrated. My advisor says that's survivorship bias—for every grandfather who succeeded, ten lost everything. I don't need to preserve this money. I could afford to lose half of it and still be fine. But is that permission to speculate, or is it precisely the thinking that destroys wealth? — The Windfall Inheritance in Greenwich
J.P. Morgan
"The first thing is character, the second thing is character, the third thing is character—and then comes judgment"
29 votes
Jesse Livermore
"It was never my thinking that made the big money—it was my sitting and my willingness to be wrong"
32 votes
61 votes total
Full Positions
From High Finance
"The first thing is character, the second thing is character, the third thing is character—and then comes judgment"
Your financial advisor gives you the counsel of mediocrity—the strategy designed to protect him from blame, not to build your wealth. Diversification is how you avoid catastrophe, not how you create fortune. I built my wealth by understanding industries deeply—railroads, steel, banking—and consolidating positions where I had conviction. Your grandfather did the same. The question is not whether to concentrate but whether you have earned the right to concentrate. Do you truly understand these companies, or do you merely have opinions? Can you hold through a 50% decline if your thesis remains intact? The difference between speculation and investment is not the size of the position but the depth of the analysis. If you have done the work, concentrate. If you are guessing, diversify.
From Reminiscences of a Stock Operator
"It was never my thinking that made the big money—it was my sitting and my willingness to be wrong"
Morgan speaks of conviction and concentration, but he leaves out the most important part: being wrong. Every speculator, every investor, every genius who ever played the market has been catastrophically wrong at some point. The question is not whether you will be wrong but whether you will survive it. Your advisor is right that your grandfather's success is survivorship bias. But he is wrong that the answer is index funds. The answer is position sizing and discipline. Never bet so much that being wrong destroys you. Start small with your concentrated positions. Add only when the market proves you right. Cut losses ruthlessly when it proves you wrong. You say you can afford to lose half. Then risk only what you can lose completely on any single idea—and be prepared to do exactly that. The market will humble you. The question is whether you will still be standing when it does.