From a single smart move to a six-figure portfolio: My journey of turning one investment trust into $100,000.
A few years ago, the idea of building a $100,000 portfolio seemed like a distant dream. I didn’t grow up learning about stocks or investments, and the stock market felt overwhelming and inaccessible. But today, I’m proud to say that I’ve crossed that $100,000 mark, and it all started with one simple investment in an investment trust. My journey was filled with patience, learning, and a few risks along the way. Here’s how I did it, one step at a time.
The Beginning: A Curiosity About Investing
It all started about five years ago. I was in my late twenties, working a decent job, but I didn’t have much in the way of savings aside from an emergency fund. Investing wasn’t something I knew much about—stocks, bonds, and mutual funds seemed too complex and risky. But as I got older, I realized that just saving money in a bank account wasn’t going to build the future I wanted.
I began reading about investing and discovered a key tool that changed everything for me: investment trusts. These trusts, I learned, offered diversification and were managed by professionals. Unlike trying to pick individual stocks, which felt like gambling, investment trusts seemed like a safer, long-term strategy.
Choosing My First Investment Trust
After weeks of research, one investment trust caught my attention: the Scottish Mortgage Investment Trust. It had a history of strong returns, and its portfolio included some of the world’s most innovative companies—giants like Tesla, Amazon, and Alibaba. The trust’s focus on technology, healthcare, and global growth markets gave me confidence that it had long-term potential.
At the time, I only had about $1,000 set aside to invest, and I decided to make the Scottish Mortgage Investment Trust my first real investment. It was nerve-wracking to take the plunge, but I reminded myself that no wealth was ever built without a little risk.
A Rocky Start: Navigating Market Volatility
As soon as I invested, the real emotional challenge began. The market’s ups and downs made me question my decision constantly. One day, I’d see a small gain and feel optimistic; the next day, the market would drop, and I’d worry that I’d made a mistake. It was a rollercoaster. But the more I read about long-term investing, the more I learned that market fluctuations are normal.
I stuck with my investment, adding small amounts whenever I could. Some months I’d invest just $100, other months I managed to contribute a little more. I wasn’t trying to time the market, just slowly building my stake in the trust. Patience was key.
Expanding My Portfolio: Beyond the First Trust
A year later, my investment had grown by about 15%. Seeing that growth gave me the confidence to diversify into other investment trusts. I didn’t want all my money in just one trust, no matter how successful it had been.
I began researching other sectors and added more trusts to my portfolio. I was particularly interested in renewable energy and infrastructure, which I saw as sectors with massive potential for long-term growth. One trust I invested in was the Foresight Solar Fund, which focused on solar energy infrastructure. Over time, it provided reliable growth and steady dividends, helping to strengthen my portfolio.
The Power of Reinvesting Dividends
One of the most important lessons I learned during this process was the importance of reinvesting dividends. Many of the investment trusts I chose paid out regular dividends, and instead of cashing them out, I reinvested them right back into my portfolio. This decision played a huge role in growing my investments faster.
By reinvesting dividends, I was benefiting from compound growth—earning more returns on both my original investment and the reinvested dividends. Over time, this created a snowball effect, where each dividend reinvestment helped generate more income, leading to larger returns the following year.
Staying Strong: The 2020 Market Crash
Then came the COVID-19 pandemic in 2020, and with it, one of the scariest times for investors. The stock market crashed, and like many others, I saw my portfolio lose 30% of its value in a matter of weeks. It was a gut-wrenching experience, and I watched as friends and colleagues panicked, selling their investments at a loss.
But I remembered what I had learned—long-term investing means staying the course. I didn’t sell. In fact, I saw the market crash as an opportunity to buy more while prices were low. I continued investing during the downturn, knowing that the market would eventually recover.
By the end of 2020, not only had my portfolio recovered, but it had grown significantly. That rebound allowed me to hit $75,000 in 2021.
The Final Push: Reaching the $100,000 Milestone
With my portfolio steadily climbing, I set my sights on a new goal: reaching $100,000. I continued to diversify, adding more trusts in different sectors, like global equity income trusts and real estate investment trusts (REITs). I also expanded into international markets, allowing me to take advantage of global growth opportunities.
Every month, I made regular contributions, reinvested dividends, and watched my investments grow. By early 2023, I had finally reached the $100,000 milestone. It was a surreal moment, and I couldn’t believe how far I had come from that initial $1,000 investment.
The Lessons I’ve Learned
Building a $100,000 portfolio taught me several key lessons that anyone can apply to their own investing journey:
- Start Small, Grow Steadily: My journey began with just $1,000, but consistent contributions and patience helped me grow it over time. You don’t need a lot to start—you just need to start.
- Diversify: Putting all your money in one investment might feel tempting if it’s doing well, but diversification spreads your risk. I invested in a range of sectors and strategies to create a more balanced portfolio.
- Patience Is Crucial: The market will go up and down, but staying invested for the long term helps you ride out the volatility. Timing the market is nearly impossible, but time in the market pays off.
- Reinvest Dividends: Reinvesting dividends was one of the most powerful factors in growing my portfolio. Compounding returns create exponential growth over time.
- Stay Calm During Market Crashes: When the market crashes, it’s easy to panic. But staying calm and continuing to invest during downturns often leads to greater long-term gains.
Conclusion: Building Wealth One Step at a Time
Building a $100,000 portfolio didn’t happen overnight. It took consistent effort, careful strategy, and the willingness to stick with it through market highs and lows. But my experience shows that anyone can achieve similar results with the right approach.
Starting with one investment trust opened the door to my financial journey, and today, I feel more confident than ever about my future. Investing may seem intimidating at first, but with the right mindset and a bit of patience, you too can build wealth over time.
