If you love 'hot' investing tips as much as the next guy, you will love my top four investing tips for 2017 and beyond.
Gimme your hot tips, baby
This week.
And the week before that.
In fact, for five years now.
I have been asked for my latest investing 'tips'.
It's almost like shares — which represent part ownership in a business — are fine-tuned racing horses and I'm Bart Cummins (without the eyebrows).
But unlike the racing legend, I have never had any luck with the punt.
An offer you can't refuse
If I gave you the choice of $50,000 in cash or everything I know about finance and investing, which would you take?
$50k.
Or three university degrees, thousands of hours of research, and years of experience, all in one concise document.
Most people would choose the cash.
They do so because most people think cash is the end goal.
"We invest for more money," many people would snap.
But without the knowledge, what will you do with the money?
"Put it in Bitcoin," protests a first-level thinker.
You could do that. And in a year from now, you could be a millionaire like what's his face from the radio.
But, chances are, you won't.
In fact, a year from now, you will probably have bought a shoebox in the burbs, gone on a holiday, stuck it in a term deposit earning negative 1% after inflation, or drowned the cash in some pints of Furphy.
Of course, you might not do that.
But I can tell you one thing for certain: you would need much more than $50,000 to get the same level of knowledge I offered you. Just ask my HECS debt.
Unfortunately, cash is king — and property is the dream.
My 4 best investing tips of 2017
Here my four best investing tips of all.
1. Invest in yourself
It is far easier to acquire knowledge than money. And it compounds must faster than anything else in our lives.
Oh, you want proof?
Ask yourself: Why is education mandatory for children and not the elderly?
It's not because your brain starts to go crusty at 75.
It's simple: Once you learn the basics (e.g. addition) you can build on that knowledge with more knowledge (e.g. multiplication) and more knowledge (e.g. algebra) and more knowledge (e.g. physics).
Children learn these things so they can apply the skills and shape society for a better future.
Unless you invest in yourself intellectually, emotionally and spiritually you will never achieve your absolute best.
"Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young." — Henry Ford
2. Invest in a business.
Around one in three Aussies want to start a business.
So, yep, there is a chance you are one of them. I am one of them.
Obviously, it's not for everyone. And many cannot afford to do it, right?
Wrong.
You just need to be smart about it.
Don't throw your infant on the kitchen tiles and run out to start your own space program.
Probably 90% of starting a successful business is planning and preparation, something you can do while working 9-to-5.
But don't just write it on the "Gonna" calendar.
Sit down with your partner — same-sex or otherwise — and put a timeline on it.
"I'm starting a business in July 2018. Here's how I'm going to do it."
Make no mistake, running a business is one of life's toughest and stressful decisions.
But by starting a business you will finally be able to make the economy work for you.
3. Make someone else's business your business
Running a business is tough work.
So do not attempt to start one unless you have done your preparation and readied yourself emotionally.
Luckily for you and I, we can make someone else's business our business.
The easiest way to do that is by buying shares on the stock market.
I own shares in Apple, Alphabet (Google) and Australia's Platinum Asset Management Limited (ASX: PTM). They pay me dividends. And as a part owner via shares, I can take advantage of someone else's hard work simply by pressing "buy" in my brokerage account.
If picking stocks isn't your thing, get someone else to do it. Or buy a low-cost index fund in ETF form, like one offered by Vanguard. That's what I'm doing for my little sister (she's a couple of years too young to start her own business).
4. Buy a property.
A house should your home — not another financial asset. And no, most property does not double every seven years.
In the US, Nobel Prize winner Robert Shiller found:
"Capital gains have not even been positive. From 1890 to 1990, real inflation-corrected home prices were virtually unchanged."
It is a very similar result all around the world, including Australia. The last 26 years have been the exception — not the rule.
So why make a house probably your biggest financial investment of all?
I have written about this for some time, but a friend reminded me last night:
"You should have a nice house. A base. Because life gets hard, you need a place where you can allow your mind to switch off. A place where you can be at peace."
Practically speaking, your home is a place to store all of your crap. MJ's greatest hits (on CD), your boat, and the other 'stuff'.
Foolish Takeaway
You and me, we can only invest two things:
- Our time, and
- Our money
Rich or poor, young or old. I'm following these simple steps and I think you can, too.
