Mastering Money and 3 Investments to Own For Life
School doesn’t give you the knowledge you need for life—it prepares you for a consistent work schedule and that’s it.
Why is it that high school or most colleges don’t teach you about investing, financial literacy, the carried interest loophole, how to start a business, or any of the things that would actually be useful in life?
I'll tell you why. It's not a conspiracy.
Because if they did, we would all be rich. And worse, we'd be thinking critically.
They absolutely can't have that.
So, I'm going to do my part to even the playing field and give you three investments to own for life.
1. The Safest and Best Investment
Lesson one of finance: Everything in finance is actually very simple but is complicated and obfuscated to make you feel like you need a degree or financial advisor to understand it.
Never forget that.
Investing at its heart is just putting your money into a company or securitization of companies that you think will make money in the future and then selling it when it does. That’s it.
Will Apple continue to make money in the future? Absolutely.
Will Tesla continue to see increased profits? Most likely.
Will Netflix make shows that shit the bed? Probably
Look around you. The world is your investment.
All you are investing in is that these companies will continue to exist and make money in the future. It's really that simple. But there is one more thing to note.
You won't get rich only investing 10 or 20% of your paycheck. Sorry.
This is like saying I'm going to get in shape by working out 20 minutes a day. You can if you have amazing genetics, but for the rest of us, we need to lift that goddamn dumbbell.
I was investing 80% to 90% of my paychecks, even when they came from working at ShopRite or DoorDashing. You have to have skin in the game. And here's the other secret: you have to leave that money alone long term. I'm talking at least a year if not more. A good company or product will bounce up and down throughout the year, but if it has solid fundamentals, the general trend will go up.
“If you don’t find a way to make money in your sleep, you will work until you die.”
Okay, I need you to sit down for this part. Ready?
This basic information right here is why the rich get richer and the poor get poorer. The rich save and invest a large percentage of their money while the poor tend to spend all, or worse, they think "saving" is the answer.
Saving only pays 0.5% or 1% interest at best.
It's a scam ran by the banks and it won't get you ahead. Invest instead.
2. Invest in These Types of Assets
Here is the section where I give you those sexy stock tips.
Just kidding. It won't be that easy.
I'm not going to do all the work for you, but I will list the types of investments you can make and how I think about them.
Bonds: Why do people even bother with bonds? Low yield, boring. Well, there is a reason. Bonds give you stability and exposure to different parts of the world. For example, US treasuries are considered some of the safest investments on the planet. Think of bonds like the boring, old couple you see at the bar still holding hands. They're steady, reliable. And they're a lot smarter than holding your money in a savings account if you're the “safe” type.
Junk Bonds: Normal bonds are like loaning money to an old trustworthy couple who will pay you an extra 5% on top. Junk bonds are like loaning money to the creepy heroin addict down the block who might not pay you back. However, if his big heroin sale goes through next month, he'll be able to pay you back, plus 20% interest! You just have to hope that his "business" does well, even though the experts are telling you it has a higher chance of failing.
Dividend Stocks: These are like the couple that owns the bar. They're safe and every year they'll give you a little cut of the profits. You probably won't get rich, but you’ll do alright. I like dividend stocks because they pay you back quaterly, even if the stock price doesn't go up. And over time, as the company makes more money, they'll usually raise the yield. My favorites dividend stocks are Microsoft, Target, IBM, Coca-Cola, Pepsi, and Exxon Mobil.
Growth Stocks: Growth stocks are like the new business down the block. They have a lot of potential but some might not make it. I like to pick these stocks based on the products or services they offer, and if I think those products or services will be in demand in the future. Risk management is important to remember here. The more risk in an investment, the more reward. Some of my favorites include Tesla, Amazon, Google, Etsy, and Shopify. Those all might sound like winners, but Shopify, for instance, is down nearly 80% on the year. If a company doesn’t have much room to grow, it could come crashing down.
Exchange Traded Funds: And finally, ETFs. These are like a basket of different investments all rolled into one. So, by investing in an ETF you get exposure to a bunch of different companies or asset classes all at once. This still is one of my favorite ways to invest because it's low risk and it diversifies my investment. My favorite ETF by far is the Vanguard Total Stock Market Index Fund ETF (VTI)
The potential for crypto is huge.
I believe it will eventually replace fiat currency (paper money) as the global standard and gold as a store of value. But in terms of risk, it's off the charts.
I've seen people become overnight millionaires and I've seen people lose their life savings. It's that volatile—so please be careful.
At the moment I only invest in two cryptocurrencies:
Bitcoin is basically a new kind of savings account that is much harder to hack than a normal bank and is completely transparent in terms of economic activity. Moreover, there will only ever be 21m bitcoins ever created, so it's a limited supply. Bitcoin has value based on the fact that people are willing to use it as a store of value and its code will never be changed.
Ethereum is similar to Bitcoin, but it also promises decentralized applications on distributed blockchain code that enables you to do more than just buy and sell digital money, but foster an ecosystem for decentralized finance, NFTs, and the metaverse.
It’s all pretty fucking neat and I believe both hold tremendous long-term value.
But the technicalities of crypto are beyond the scope of this article.
Read "21 Lessons from Falling Down the Bitcoin Rabbit Hole" by Gigi and "Out of the Ether" by Bloomberg journalist Matthew Leising if you want to learn more about cryptocurrency.
Stop trying to reinvent the wheel.
Buying and holding stocks, bonds and blue-chip crypto is the best way to invest.
There isn't really much more to say than that. The information here is all you need to know to get started and be a successful investor.
So I guess I'll end this article now. Good luck.
Ever since I was a child it was my dream to become a financial advisor. Unfortunately, it never came true. Therefore I am not a financial advisor and you should do your own research and not just listen to random people on the internet. Nothing contained in this publication should be construed as investment advice.