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Cook the bacon over medium heat in your soup pot until the bacon is golden brown, about 10 minutes.
Add the onions, salt and pepper and turn the heat down to medium-low and cook until the onions start showing some colour, another five minutes or so.
Add the diced potatoes and turn it back up to medium. Cook the potatoes, stirring frequently so they don't stick and burn, for another 10 minutes.
Add your stock, water or combination to the pot to just cover the potatoes and bring to a light boil.
Simmer lightly for about 7 to 10 minutes until the potatoes are almost totally soft.
Mash them with a potato masher until they reach a texture you are happy with, add the balsamic, the butter and the heavy cream.
Add some milk to reach the desired consistency right before you are going to serve it.
Ladle the soup into bowls and garnish it the way you would garnish a baked potato.