In investment, bigger amounts will generate higher returns than smaller amounts because of its ability to buy multiple assets. The investor will have the resources to be able to park their funds into different asset classes. These asset classes could include, investing into the Stock Market, Real Estate, Precious Metals and Bonds. The investor would be able to create avenues from themselves that can generate passive income such as Rental Income or being a Silent Partner in a business.
Due to having a larger amount to invest, the investor can also practice Diversification. Diversification is the act of spreading investment dollars across a range of assets to reduce investment risk. For example, if you own only one stock and it falls 20 percent, the value of your investments is down 20 percent. By adding in even one more stock that rises (or even doesn’t go down as much) when the other one falls, it should improve your portfolio. It’s part of what’s called asset allocation, meaning how much of a portfolio is invested in various asset classes, or groups of similar investments.
Such strategies are only really possible for those who have the ability to invest a large sum of money, however those who don’t have such an amount shouldn’t be discouraged as there are methods they can use to build up wealth on a budget.