The world does not revolve around stocks. I talk about them because they are a reasonable way to get from dreaming to living, but there are other ways to do accomplish that middle step of dream, invest, live.
I am not an expert about stocks and know even less about other ways to invest, but I do know that the investment world is enormous. There are millions of people out there trying to get their money to make them more money, some for need, some for greed. I’ve looked at the various investment vehicles, considered my comfort zones and ended up with stocks. Others make the same assessment and get different answers. That’s good. I don’t expect to be like everyone else, and don’t expect everyone else to be like me. That would be boring.
Do you like pretty things? You don’t have to invest in dull pieces of paper or arrangements of electrons. Gold, silver and diamonds are valid investments. You can own them, hold them, wear them, or let surrogates store them. The nice thing about them is that they have actual value. They can’t go bankrupt because someone cooked the books. The worst that happens to gold is that it melts. Silver will tarnish a bit. Diamonds are tough, but they are actually fragile bits of fancy coal; but they also have the greatest sparkle. It is possible to make money with them. The price of gold has risen dramatically, about four-fold, since the internet bubble burst. It is also possible to lose money, but the only way the value goes to zero is if someone steals it.
Do you like regular returns with something dull but safe? Annuities and bonds can pay out very regular rates of return. Investing becomes about as free from gambling as possible, but the returns are much smaller too. Someone is still taking the risk with the money, and they should pay the annuity no matter what, but they do so because they get to enjoy the benefits of any extra money made on the investment. But of course they would never risk the money and would always put it in safe places. Well, there are the occasional defaults, bits of bad luck, and rare irresponsible actions. Nothing is perfect. They are the most worry-free. Any worry is the worry you carry anyway.
Someday the words real estate and investment won’t seem like contrary concepts. People need places to live. Every year people find reasons to move that have nothing to do with the real estate market. Of all the houses I’ve owned, I always bought or sold because I wanted to, not because of market conditions. I’m not the only one. Such moves create demand and move supply. Many people have been sitting still, waiting for the market to improve. The market will improve when they are no longer sitting still. I think the recovery is inevitable because the forces that affect peoples’ lives are inexorable. Congratulations to anyone who was able to buy now without having to sell first. They will be the role models for proving yet again that real estate can be an investment. That may take a few months, years, or decades though. But hey, we all need a place to live.
There is plenty of variety within the investment world. I may not buy gold, but I think the other precious metals are interesting (e.g. platinum, etc.), especially the ones needed for industry. I don’t buy bonds or steer towards annuities, but am interested in eventually considering corporate bonds and such esoteric items like stock-convertible bonds. As for real estate, I’ve seen what it’s like to be a landlord. There’s good and bad there, but I doubt that I’d ever do that again unless I hired a trustworthy, competent, property manager.
Investing is a personal decision. While I have arguments against doing certain things, that’s only me. Everyone gets to make their own choices. I know people for whom commercial real estate is best, and I hope they aren’t carrying a lot of debt now. There are probably some very good deals out there for folks with cash, or at least good financing and patience. I know others who literally bury their wealth, or at least part of it, because of emotional need. I don’t recommend that, but if it helps them get through a personal crisis, maybe the potential loss is cheaper than counseling. Out of seven billion people that will be true for someone.
I think the best investment is in yourself. Putting money aside so it can grow is great for making money with minimal effort because it frees up time, which is the most valuable resource. But, at least in America, investing in your own development, whether that is academic, spiritual, or entrepreneurial, can be the most direct payoff. I invest almost all of my cash into stocks. They are easy to buy, store, and sell; can have great growth, and they match my interests and risk tolerance. But I invest more of my time in other aspects of my life; my writing, my books, my photos, my classes, and whatever else intuition suggests. And of course, some investments are totally non-monetary; the time spent dancing, socializing, or considering the various aspects of this world. There’s definitely more to life than stocks.