On TD’s Inside Investing show, I was asked a simple question:

Can you get rich investing in index funds / ETFs?

My answer was blunt: No.

– Can you compound your money? Absolutely.
– Can you outperform most people? Sure.
– Can you get rich (rich)? Very unlikely.

Here’s why:

Index funds are designed for diversification.
But outsized wealth is built through concentration.

If you study the world’s wealthiest investors and entrepreneurs, a clear, obvious pattern emerges:

– They didn’t own everything
– They owned meaningful stakes in one or a few exceptional businesses for the long run

Case in point:

David Cheriton—a Canadian, born and raised in Vancouver, educated at the University of Waterloo, and later a Stanford computer science professor—made one of the greatest investments of all time.

In 1998, two PhD students knocked on his door: Larry Page and Sergey Brin.

They pitched him a search engine: Google.
Cheriton didn’t buy an ETF.

He didn’t “diversify.”

He wrote Page and Brin a $100,000 cheque.

And today?

Cheriton’s stake in Alphabet (Google) is now worth over $19 Billion USD.

That’s what a bold concentrated bet can do.

Jeff Bezos and Elon Musk didn’t spread capital evenly across the S&P 500.

They built and held large, concentrated positions through 80%+ drawdowns in businesses they deeply believed in and grew from the ground up.

That’s how wealth is created.

You won’t find people on the Forbes list who got there by steadily buying index funds alone. No way. That strategy is about preservation and compounding—not asymmetric outcomes.

If your goal is to build real wealth:
– You need to own stocks
– You need conviction
– And you need concentration

In many cases, that means looking where others aren’t — micro-cap and small-cap companies—where you can actually build meaningful stakes (1–5% in each company) and benefit from true upside.

That’s exactly how I approach investing in the public markets today.

I’ve been building positions in businesses that I believe can scale significantly. One example is Pesorama.

Pesorama operates JOi dollar stores in Mexico—targeting underserved communities with a value-focused retail model; think Dollarama. But what’s compelling isn’t just the stores—it’s the ambition behind the rollout and the long-term vision to build a much larger retail footprint across Mexico.

It’s early. It’s not without risk.
But that’s the point.

Wealth is built in the early innings—through concentration, not diversification.

Index funds are a great tool.
Just not the one that typically makes people rich.

There’s many more examples of small-cap opportunities, some of which I profile on my Capital Compounders Show (YouTube).

Disclosure: $PESO.v (own)

Watch the TD Inside Investing Episode Now ⤵️