The best investments are predicated on a few simple principles: consistency, foresight, and scarcity. Here we do not recommend that you invest your wealth in any particular manner or claim to be financial advisors, but rather offer philosophies and resources that could support you on the path to achieving your financial goals. Keep in mind that any investment, while potentially rewarding, is also inherently dangerous.
Ultimately, the purpose of investing is to make money using existing capital. This means growing wealth and not losing it. Given the inherent risk of nearly every business-related venture, the first principle of successful investing, consistency, is perhaps the most important.
Reliable investments are capable of maintaining profitability despite fluctuations in external factors such as the status of the global economy or the time of year. While reliable investments are often less lucrative than more dangerous approaches to wealth management such as day-trading, they are also less stressful and can be structured into long-term plans, which leads us to principle two, foresight.
Our society is constantly evolving. Since investments are based upon providing value in the form of goods or services to society, they must stay relevant in order to remain profitable. In an ever-changing world, the best investments are built upon the needs of the future rather than those of the past.
For example, recognition of the threats posed by finite stores of fossil fuels on our planet has led to the development of numerous green-energy car companies such as Tesla. This was a turn of events that some people predicted and benefitted from. By the same token, some companies whose business model is wholly based on fossil fuels could lose value over time if sustainable energy continues to gain importance.
Good investments are scarce. In accordance with the law of supply and demand, they become rarer over time or are irreplaceable. There is only one original copy of the painting “Haystacks” by the esteemed French artist Claude Monet, and as long as Monet’s artwork is appreciated by society, the value of this painting will likely continue to grow or at least retain its value in light of inflation.
To this end, prints of this painting are poor investments, since additional copies can be produced over time. Scarcity could also be perceived as a measure of barrier to entry. In general, real estate can serve as a good investment avenue, but it is difficult to become involved in for most people because it relies on prior sums of investment capital greater than most people have on hand. “Get rich quick” schemes such as lottery tickets are far more affordable but, from a statistical standpoint, are unlikely to ever succeed.
In accordance with these principles, we have developed a list of potential investment resources that you should consider learning more about.
Antiques: Scarce but not Consistent or Predictable
Antiques could be defined as any physical items already produced that are not replaceable, such as old cars, original paintings, articles of clothing, vintage signs, books, and more. While these are often limited in supply and only increasing in rarity, they are difficult to invest in due to multiple tiers of inconsistency.
The price of antiques is inevitably correlated with demand, and demand for antiques, which are often non-essential items, fluctuates over time in a way that is rather subjective and not very predictable (though history can provide some insight on the potential value of certain antiques, such as paintings by Monet).
If you are interested in becoming involved in antique investing, Consider reading “American Pickers Guide to Picking” by Mike Wolfe and Frank Fritz, the cast of the popular television show American Pickers. The book is a how-to guide to buying and selling antiques.
Sustainable Investing: Consistent and Semi-Predictable but not Scarce
Many people choose not to invest in the stock market due to the effort barrier of doing so, or even if they invest money in the stock market, they are not consistent in their approach.
The app Acorns is a solution to this problem. Acorns rounds up every-day transactions and invests the spare change in an exchange-traded fund, or ETF, of your choosing. While you will not “get rich quick” from Acorns, you will have the chance to invest money consistently over time.
Like many investing apps, Acorns has a low barrier to entry and it is easy to become involved. It is also relatively predictable, since you know where your money is going and based on historical information you can predict your returns (though any investment involving the stock market is inherently dangerous). Sign up for Acorns and receive $5.
Another app that permits automated investing is M1 Finance. Whenever money is deposited into the app, it is automatically distributed into financial assets such as stocks in a way that is intelligent and personalizable. In addition to serving as an investment resource, the app can also serve as a checking account.
You can also borrow money through the app, but do so with caution: it is better to live simply and in accordance with your means than to borrow (though extenuating circumstances occasionally necessitate doing so).
If you are interested in developing a long-term investment plan, consider checking out Personal Capital. The company offers free software tools for budgeting, retirement preparation, and more, and can help you to develop and implement a long-term wealth management and investment plan.
Real Estate: Consistent, Semi-Predictable, and Scarce
Real estate can serve as a reliable source of investment income but is not an accessible investment resource for many people due to its relatively high barrier to entry. Income earned from real estate investments is semi-predictable, in the sense that there is limited fluctuation in the demand for real estate (except in extreme circumstances).
Despite the difficulty of purchasing entire commercial or residential properties as an individual investor, it is still possible to become involved in real estate investing with more limited quantities of money.
For example, Diversyfund provides the opportunity for investors to allocate wealth into a Real Estate Investment Trust, or REIT, which owns and operates income-generating properties. Learn more about how their REIT works.
If you have the ability, consider becoming involved in Real Estate investing on your own. Books such as “Mastering the Art of Commercial Real Estate Investing: How to Successfully Build Wealth and Grow Passive Income from Your Rental Properties” can aid you on your journey.
All of the above investment avenues have one trait in common: they are related to money. There are many other investments, whether in relationships or education, that are equally if not more valuable and important. Make certain to take the time to carefully cultivate these as well. As you progress along the path of life, may good fortune be on your side.
Interested in the stock market? Consider learning about publicly-traded companies developing technologies relevant to the field of immunology, such as cancer immunotherapies and treatments for autoimmune diseases.