Online entrepreneur Dave Bruno has issued the world a challenge. He's daring all of us to reduce our worldly belongings to just 100 items.

That may sound crazy -- until you start digging into your closets and cupboards. How much of the stuff gathering dust in your home have you actually used lately? A less cluttered environment might actually make you feel more peaceful and productive.

Whether or not you get down to 100, paring back your belongings will likely make you feel better. It can even make you wealthier, if you sell most of your detritus and invest that money. Suppose you divest yourself of all but one of your home's TVs, sell one of your family's multiple cars, and put all your old LPs up for sale online. If you can scrape together $10,000 for your efforts, and invest that money in the stock market, it could grow to $67,000 in 20 years with a 10% annual return.

The power of a concentrated portfolio
The financial portion of your life could probably use some thinning out, too, for several reasons. For one thing, a portfolio bloated with dozens of holdings makes it harder for you to properly keep track of any of them.

I used to own lots of stocks I didn't completely understand, including Sun Microsystems (NASDAQ:JAVA), KLA-Tencor (NASDAQ:KLAC), Sonic Solutions (NASDAQ:SNIC), and Cirrus Logic (NASDAQ:CRUS). Sure, I'd been impressed by the positive things I read about them, but I couldn't tell you exactly how they made their money, nor how strong their competitive position was relative to their peers. I wasn't even keeping close tabs on their debt or inventory levels. I had too many stocks, and not enough time, financial savvy, and interest to keep track of them all.

There's also a more mathematical reason for pruning your portfolio: The fewer holdings you have, the more influence each can wield on your finances. If your money's divided equally among 50 companies, each represents about 2% of your wealth. If one stock doubles, it'll hardly be a blip in your overall holdings. But with only 10 stocks, each represents about 10% of your portfolio, and a big move in one will make a definite difference. (On the flip side, with only 10 stocks, you'd better know a lot about them -- your entire portfolio's riding on a mere handful of picks.)

Warren Buffett likes the idea of concentrated portfolios. He's talked about a lifetime punch card for investments, with only 20 slots on it. Buffett believes in carefully watching and waiting for the most attractive investing opportunities. Swinging at just a few of those fat pitches can bring you outstanding profits.

Focus your funds
Less can be more in mutual funds, too. The market offers many "focused" funds with limited lists of holdings and strong track records. Consider the FMI Large Cap (FMIHX) fund, with a market-beating five-year average annual return of more than 11%, and only about 23 stocks under its umbrella -- far fewer than the 100-200 many funds own. FMI Large Cap's top holdings recently included Wal-Mart (NYSE:WMT), Accenture (NYSE:ACN), and UPS (NYSE:UPS). Managers Ted Kellner and Patrick English have said that their strategy includes cutting the number of stocks they own, and concentrating on the best ones.

Need suggestions for outstanding mutual funds? Give our Motley Fool Champion Funds newsletter a whirl. A free trial includes full access to all past issues, including detailed analysis on each pick. A hundred worldly possessions may not seem like much, but making one of them "a first-rate portfolio" can pay off in the long run.

Longtime Fool contributor Selena Maranjian owns shares of Wal-Mart. UPS is a Motley Fool Income Investor selection. Wal-Mart and Accenture are Motley Fool Inside Value recommendations. Try our investing newsletters free for 30 days. The Motley Fool is Fools writing for Fools.