Work vs Returns


I was having a conversation a couple days ago about a new investor. He tried a few MLM/pyramid schemes, and when those didn’t work he moved onto some online forex trading nonsense. It occurred to me that if you’re brand new to the world of investing without much life experience to rely on, it’s pretty hard to identify what’s a real honest way to invest and make money versus what’s a get rich quick scheme that’s unlikely to work or an outright scam.‎

So here’s the chart! For the record, this has no scientific basis other than my opinion and personal experience. But that is based on 20+ years of investing, reading every investing book I can get my hands on as well as learning from the community.‎

So in this chart you want to be as far right as possible, and all things equal as far up as possible. (Why settle for more work unless you get more returns). ‎

• Index funds, robo-advisors (which invest in index funds) will get you the best returns with the least work.‎
• Physical investment real estate can potentially provide the best returns. I don’t talk too much about investment real estate here because it really is a lot of work. It’s basically starting a business, but done well can have great results.‎
• Buying and holding (as opposed to day trading) individual stocks also is good, but with more work and slightly lower expected returns, it’s easily beat out by index funds.‎
• That “high yield” savings account has is about the lowest yielding investment you can make.‎
• Homeownership comes with a lot of work and returns that generally keep pace with inflation over time.‎
• Day trading is just asking to thrash around in the market and have nothing to show for it.‎
• Anything forex or bitcoin you see on instagram is a scam. Like, they’re literally just trying to steal your money one way or the other.‎
• An exhaustive study of over 350 MLM companies found that over 99.6% of participants lose money. Don’t get involved in them.‎

As always, reminding you to stay healthy by following the two PFC rules: 1.) Stay at home and 2.) Wash your hands early and often.‎‎‎‎‎
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– Jeremy‎‎‎‎‎
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