Many people ask me for investment advice. They think that they can achieve wealth by following in my footsteps and become a multi-millionaire too. But their assumptions fail them.
You can’t make a million copies of the same T-shirt and expect a million people to look sexy and great wearing the same thing. One size does not fit all! And that’s the same with investing.
Which Investment Is The Most Profitable?
Too many people get distracted by the noise in the marketplace. There’s too many options: Bitcoin, stock market, mutual funds, real estate, gold, and oil. What is best for you to invest in?
It actually depends on many factors. Before you even talk about investing, you need to think about your income level. If you’re struggling to pay off debts, you’ll be choosing a different investment vehicle than if you are wealthy. The amount of risk you can take on is another factor.
When you are younger, you can be more aggressive with your investments. When you are older, say 40 to 50, you might want more protected capital. So choosing investments is like buying a car.
You can’t just tell me you want to buy a car and expect me to have an answer for you. I need to know if you’re driving it for leisure or business. If it’s for you or your family. All of these factors affect your final decision. So before you start to invest, you need to do your research.
Let’s start with the first question to consider.
Type Of Investor
So first you’ve got to know what type of investor you are. Are you more for growth? Capital gain? Security? Do you want dividends? All that makes a difference. Then you have to think about the investment vehicle.
I’m a real estate guy, not a stocks guy, but I have friends who do well with stocks. I don’t like the lack of control I have with stocks. With real estate, I have control of the cash flow and appreciation. So you want to think about the returns you want and your risk tolerance.
Capital Gain Investor Or Cash Flow Investor
Next, you’ve got to consider if you’re a capital gain investor or a cash flow investor. A capital gain investor buys something at a certain amount and it appreciates, so you make money on the upside.
A cash flow investor on the other hand invests in something. You are looking for consistent cash flow. I’m a cash flow investor, so for example, I know my investment is making a 10 percent return every year. If there are no changes, it will take me 10 years to get all my money back.
What Stage In Life Are You At?
The third and most important thing is the stage where you are at. If you are making less than $250,000 a year, the best investment that you can make is in yourself. Upgrade your skills and knowledge first.When your earning ability improves, your income improves. If your income is not there, throwing money at an investment and hoping to get rich from it is not a realistic goal. So be generous with investing in your own education. Click To Tweet
When you have extra cash flow, do your research and find the right investment for you. There’s always plenty of opportunities, so invest in something you understand, and invest in yourself. That is the path to take to riches.
Connect with Dan