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Rocky Mountains From Orbit

75 Investment ideas for 2023

As we enter the second quarter of 2023 we not only have concerns with inflation, war in Ukraine and friction with China. There is also a continued interest on the part of investors of how to perform well with all the uncertainty and the relatively high valuations of U.S. equities. Here are 75 investment approaches you should consider for the rest of 2023.

  1. All World Stock Index Fund

One of the easiest ways to take advantage of the long-term growth of the stock market is to diversify broadly across the entire stock universe. One way to do this is by weighing each country by its market cap. For example, as a general rule you could put half of your funds into a broad U.S. stock fund, one quarter into a Developed Markets fund and the last quarter into Emerging markets.

  1. Ray Dalio All Weather Portfolio

Ray Dalio, known as the founder of the worlds largest hedge fund (and has since retired), famously came up with a simple portfolio that weights assets based on their riskiness. This portfolio has had extremely low volatility relative to return. The portfolio contains 45% Long-term government bonds, 10% intermediate bonds, 30% US stock market 7.5% into broad basket commodities and 7.5% into gold. 

  1. Pick a small handful of Value Stocks

Warren Buffet has made his fortune on selecting undervalued stocks and holding them for long periods of time until they appreciate in value. To the average investor, his returns, while staggering, shouldn’t be expected going forward. However, there are a number of principles he can teach us about stock selection. The most basic of which is that stock performance will ultimately come down to a businesses long-term ability to generate profit.

  1. Build a diversified portfolio of Small-cap Value ETFs

Over the last century of stock market data the best performing stocks have been small cap value. What’s called the “size factor” and the “value factor” have been shown academically to outperform other stocks over the long term. While there are no guarantees, historically betting on small cap value has been a wise choice. 

  1. Cryptocurrency

A decade ago most hadn’t heard of Bitcoin or even blockchain technology for that matter. Even five years ago Bitcoin was seen as a short-term trend. But here in 2023 we know that cryptocurrencies will not be disappearing anytime soon. While the investment merits of x or y crypto can be debated, there is an argument to be made that incorporating a broad group of cryptocurrencies is a smart risk-adjusted investment decision. 

  1. Commodities

Commodities are tangible goods that are used in the real economy like wheat, copper or lumber. Historically, a basket of these has just about broken even with inflation. The ultimate goal with investing in commodities in general is to hedge yourself against inflation. 

  1. Corporate Bonds

While slightly less volatile on average than stocks, corporate bonds do share a lot of the risk characteristics of government bonds. Interest on these bonds is higher than the same duration government bond. 

  1. U.S. Government Bonds

Government bonds are without a doubt the lowest risk mainstream investment. Specifically U.S. T-bills are short-term bonds issued that have less than a year of duration. As a general rule interest from bonds goes up the farther out you get with the duration. However in 2022 and 2023 interest rates for shorter-term bonds have been extremely competitive with longer-term rates due to the concern with inflation. 

  1. 60/40 Portfolio

The 60/40 portfolio is famous in the investing community as one of the most “basic” go-to approaches to portfolio strategy. The approach is to simply put 60% of your money in stocks, while the other 40% goes into bonds. 

  1. I-Bonds

The I-bond has gained in popularity recently due to the concern with inflation. It’s essentially a bond-type product that is not available on the open market. You can put up to $10K online into your I-Bond while receiving an interest rate that is tied to inflation. This means unless the U.S. government runs out of money your money is guaranteed to keep up with inflation. 

  1. Find a few Metaverse Stocks and bet on the Future

The “Metaverse” is a very vague term when it comes to technology but generally refers to the next frontier of the internet towards more connectivity and interactive experience. An example of this is virtual reality and augmented reality. Both of these developing technologies seek to allow someone to either function in a virtual world or overlap virtual objects into the real world.

  1. Diversify between a handful of Robotic company stocks

While you are probably aware of some of the coolest technological changes on the horizon, taking advantage of them is a whole different challenge. How do we know which companies will make it and which are even open for public investment? Boston Dynamics is a private company that has developed robots that can jump, run and perform parkour. Imagine the possibilities (both intriguing and frightening) of combining the movement based developments with some of the machine learning advancements. There are a number of stocks that the public can invest in related to robotics. 

  1. Deploy a Sector Momentum Strategy

Sector rotation involves using a list of stock categories and ranking them based on momentum. The trader will then pick the stock (or handful) that meet their momentum threshold. The advantage of this strategy is that you are buying sectors like utilities or technology when they have been doing well and therefore are hoping to profit from their continued outperformance. The downside risk is that you end up purchasing sectors that suddenly change course (which happens often).

  1. Dogs of the Dow

This strategy has been around for a while but it has come back in popularity recently due to online investment forums giving it increased attention. It involves looking at last year’s worst performing stocks on the Dow Jones Industrial Average and then selecting 10 with the highest dividend yield. In some sense this strategy is like an anti-momentum or contrarian investment stance. It historically has had decent performance but clearly there are risks, the idea of only investing in 10 stocks being one. 

  1. Dividend Stocks

Similar to the Dogs of The Dow, dividend investing involves picking stock with the highest yielding dividends. On the flip side though, you aren’t limiting yourself to simply the top 10 stocks from the DJIA, but all stocks in any given market. For example a U.S. dividend investor could pick a dividend fund from a U.S. exchange. 

  1. Play it Risky with Leveraged ETFs

Leverage is like a double-edged sword. Historically leveraged is like a fire, it can certainly turbocharge your investment returns but has the potential  (and often probability) of getting out of control. Leveraged ETFs, which are simply packed versions of investing with leverage, are no different. However, unlike traditional leverage, there is no debt involved from the investors perspective, instead you invest into an ETF that uses derivatives in a way that makes the fund experience multiple returns. There are more complicated strategies of dealing with this risk but for now if you are not a nuanced investor it is best to stay away from Leveraged ETFs.

  1. Buy a SFH(Single Family Home)

A tried and true American ideal has been to purchase a single family home (SFH), own it for the long term while paying off the mortgage and at the end have an appreciated asset with no debt. However in reality most households do not currently own a home. The simple act of purchasing a SFH in a desirable market at a reasonable deal and holding for the long-term certainly has the possibility (even the likelihood) of working well. But after all is accounted for, you have to wonder if “The American Dream” as is often referred, is really that profitable when compared to other alternatives. 

  1. House Hack

House hacking is the practice of using a property you have control of and live in. What you do is rent out part of the building (whether that’s another unit or simply a room) to generate enough income to either get your housing costs close to zero or actually even make a profit. 

  1. High-yield Savings Accounts

This was not something on most peoples’ minds a few years ago. But after 2022, which could be called “the year of the rising interest rate” we now have some of the most competitive rates we’ve had in a while. Instead of risking money in the stock, bond or other alternative markets, why not simply get yourself a safe, easy rate of return from your bank? 

  1. Buy a Multifamily Apartment

If you’ve been involved in the online apartment investing space at all you’ll have heard of a man called Grant Cardone. He is a business/sales/real estate promoter who has made a name for himself online. While a lot of his advice should be taken with a grain of salt, he certainly has a few interesting things to say about real estate investing. One of those ideas is that you should not invest in small deals but instead save up until you can buy apartment deals of 16 units or more. This may sound unrealistic from a funding perspective but where Grant is coming from is the mentality of “go big or go home”. His general advice should be filtered with a little more nuance but the general idea of apartment real estate does hold a lot of merits. For example mid-sized apartment real estate can potentially give you advantages that a lot of other investments cannot, one being the economies of scale. 

  1. Commercial Property

Larger apartments are technically categorized as commercial but for this example I’ll leave them out since I just discussed them. Commercial property has many different dynamics than residential some of which include valuation metrics, legal structure and complexity and of course scale. But with that complexity comes the possibility of higher profits or maybe even brand recognition. In a lot of ways commercial property is better thought of as just another form of business avenue instead of lumping it in with small scale residential landlords. 

  1. Certificates of Deposit (CDs)

CD’s are just another one of those shorter-term bank-interest options. Unfortunately CDs come with a time commitment just like a bond. In exchange you will receive a slightly higher rate on your money. Whether it is worth going over from high-yield savings is a different question that should involve more personal reflection. 

  1. Flip Collectables

Another way to diversify your investment returns is by dipping your toe into the world of collectables. Some, like baseball cards, have been historically difficult to profit off. However, for speculators who have an above average sense of their respective industry, they may be able to profit long-term by diversifying their collectable portfolio, maintaining proper care, storage, and carrying insurance for protection. Even with all this, there is no guarantee of even breaking even, let alone making a profit. This is why collectable “investing” is best left to professionals. 

  1. Farm Land

Billionaires like Bill Gates have recently been purchasing vast swaths of farmland. Why is this? They recognize the long-term value of land and how the underlying supply of those assets are limited. Farm land is best for investors with large reserves and an extremely long time-horizon. 

  1. REITs

REITs are real estate investment trusts which essentially manage large portfolios of hotel, apartment, or other commercial property for rends and appreciation. REITs are simply another sector of the stock market but for those who would like to profit off real estate in a more specific way without major time hassle, REITs may be the answer.  

  1. Pick 3-4 Publicly Traded Hedge Funds You Believe In

A hedge fund is different from a “mutual fund” in a few key ways. Firstly, while mutual funds are funded by the public, hedge funds generally can only by bought by private or large “accredited investors”. This basically means unless you are an industry expert or have tens of millions of dollars hedge funds are inaccessible to you. Despite this fact there are a handful of hedge fund-like portfolios that are available to the masses. Another key difference is the investment objective. While mutual funds have the mandate of generally focusing on one investment niche like U.S. growth stocks or international bonds, hedge funds generally have the optionality to choose more risky/unconventional investment options. The fee structure between mutual funds and hedge funds is also different. Lastly, hedge funds are different because the benchmark upon which they are analyzed is generally much different. While each respective mutual fund is compared to others in its asset class, hedge funds generally are weighted on whether they can maximize risk-adjusted returns. 

  1. Buy into a Target Date Fund

Target-date-funds were first introduced in the mid 1990’s. Since then they have become a major building block of most 401k plans. The concept behind them is to expose the investor to a broadly diversified portfolio of both global stocks and bonds. The choices provided are usually categorized into conservative, moderate or aggressive risk tolerance and then offered in categorize based on the chosen retirement age. For example an “aggressive investor” might have the option to pick an aggressive 2065 retirement fund. This fund would start with almost entirely stocks and gradually increase the bond exposure as the investor nears their retirement age. 

  1. Bet on the Continued Outperformance of Energy Stocks

In 2022 energy stocks were the only major stock sector to have a positive performance. The obvious reasons include the rapid rise in oil prices(due in part to the war in Ukraine), as well as general inflation concerns and the fact that energy has been one of the “cheapest” sectors for a decade or so. Energy is no longer as “cheap” as a sector as it was in 2022 but going forward it’s not difficult to see how some of the same factors could continue to push prices higher. That said, each investor should consider the various types of energy stocks and make sure they don’t take on too much risk relative to their situation. 

  1. Buy into a Franchise

Taking a step away from the securities market, one way to invest a large sum of money is to invest into a reliable restaurant franchise. In terms of business risk this is perhaps the most hybrid option between starting your own business and buying another. Franchises have an existing brand and product chain. But on the other hand opening a franchise has the same risks involved that a normal start-up has. Another huge hurdle to success in this area is the barrier to entry: the upfront cost. Many franchises require an initial investment in the hundreds of thousands. With all of this taken into account, there may be a handful of franchises you decide provide a good opportunity. 

  1. Buy some of your own Company’s Stock

Most Americans work for an employer. In many cases those employers happen to be publicly traded. In addition, there are some benefit packages that provide the opportunity to purchase company stock at a discount. These “stock options” have their own set of contingencies like how long you must hold the stock. If you get a good deal you may consider putting some money into your own company stock. However, this has major risks. Think about the risk you already carry of getting let go from your job due to stress in the economy. What happens if you not only lose your job due to a slow economy, but the stock market takes a hit and you lose much of your asset values as well? The double edge sword is that you may believe in the company you work for enough to invest but this may come back to haunt you if the economy takes a hit. 

  1. Own some Alternative Assets through a Self-Directed IRA

Businesses, realestate, and other assets like crypto, commodities or traditional assets can be purchased through Roth IRAs. If you are one of the most eclectic investors who enjoys taking risks outside the normal asset classes, you may be curious about how you can deploy your investments into tax-advantaged accounts. There are a number of IRA custodians who can help navigate this process with you. Granted, there is a fee but the peace of mind knowing your investments are set up correctly can relieve a lot of stress. 

  1. Pay off Credit Cards

While this option is not a traditional investment option, the ROI (return on investment) of paying off credit cards can be better than anything else available. Think about how high your credit card interest is. For most Americans this can be anywhere from 14% all the way up above 30%. Making sure you pay off high interest debt can be a guaranteed way to see your money work for you faster than any investment. 

  1. Buy a recommended Personal Development Book

Another unconventional way to view investing is by considering the asset over which you exert the most control: yourself. Over your lifetime you will likely make millions of dollars in income, even if you only make a middle class salary. This fact means that shifting a small percentage into increasing your “market value” can pay huge financial as well as career gains over the long-run. Books in all their forms have historically been the most repeatable way to increase your knowledge and ability to make more money. Of course not just any book will do. You must find some books that are personal-development related. Expanding your mind in whatever career field you reside can pay dividends both personally and financially. 

  1. Buy a Course to increase your skill set

In the same vein of personal development, taking a course or passing a certification exam is another way to step up your worth to employers/clients. There are a number out there. Be sure to choose a course that you believe will actually make you more valuable by checking out reputable reviews. 

  1. Go back to school

Education can pay for itself many times over. The most traditional form of this can be found in a 2 or 4-year university. The payoff is generally based on your chosen field and if you find employers preferring or require particular levels of education. A formal degree is not necessarily always the best investment but in many situations it can provide a way to turbocharge your opportunities. 

  1. Art

Art is not only something to listen to or look at. Art in all its various forms can be bought and sold. There are a lot of ethical concerns with businesses owning rights over an artists’ work (as Taylor Swift has recently brought to our attention). But for some types of artwork in which the original creator is no longer around or the artist chooses to consciously part there is the potential for profit. 

  1. Purchase an established business

Similar to buying into a franchise, obtaining a standalone business has its own set of challenges and opportunities. On one hand you have a seemingly unlimited seiling on profits. On the other hand the name-recognition of your new business may not be as well established as a similar sized franchise. Purchasing a business that isn’t a franchise is generally higher risk and higher reward than franchises. 

  1. Crowdfunding

Crowdfunding as an investment can be viewed from both sides of the transaction. On one hand you can go to investors seeking to be “crowdfunded”, but on the other you can make profits by lending your money to similar investors looking to kickstart their business. Crowdfunding is a whole alternative funding mechanism for business and should be carefully considered alongside the traditional mediums. 

  1. Peer-to-peer Lending

Peer-to-peer lending is very similar to crowdfunding in the sense that there are people doing the funding and those being funded. However peer-to-peer is used primarily for non-profits, which, by definition, are not out to make money for themselves. On the lending side though, investors willing to part with their money may be able to make a higher interest rate than conventional lending investments. Of course it should be noted that these non-profits are generally a more risky lending investment than government and municipal lending options. Therefore, you can potentially make a higher return by taking on higher default risk with peer-to-peer lending. 

  1. Private Equity

Private equity refers to the general investment in businesses by private investors. These businesses generally are more established and have no intention to go public. The investors are looking to help out the established business as well as profit from long-term ownership either by owning part or by taking a majority steak. 

  1. Private Debt

In the similar category as private equity, private debt seeks to accomplish a lot of the same things but with less risk but less potential return. While private equity seek to take on responsibility for future growth and has theoretically unlimited profit potential, private debt is more a risk-conscious decision about how to make a higher return on the fixed-income side of the investment world. 

  1. Structured Products like CDOs and MBS

MBS (mortgage backed securities) and CDOs (collateralized debt obligations), are both examples of different types of debt that are bundled together. Mortgage backed securities are simply a bundle of various individual mortgages that are put into a “basket”. Stepping back, CDOs are simply a broader term to refer to a bundle of debt securities, some of which can include MBS. For the most part MBS and CDOs cannot be purchased by the general public. However, CMOs(collateralized mortgage obligations) are a similar arrangement of debt securities. But they can be purchased by retail investors for sometimes as low as $5K initial investment. 

  1. Physical Gold

Physical gold is one of the oldest and most well-established asset classes. Over long periods of time a straight investment into gold has not performed much better than the rate of inflation. In fact there are decades in which gold actually loses value and then years in which it rapidly rises after a sudden concern with inflation, government stability or other global scares. Gold may have a place as a small percentage of a portfolio but long-term it does not hold up as a high-return investment. 

  1. LEGOs

Believe it or not, legos have been a solid investment option for many decades. They have a well-established, multigenerational client base. In addition, lego sets are usually only available for a limited time. So by owning a “portfolio” of unopened lego sets inventors have historically been able to make returns equal, or in some cases greater than the stock market. Of course there are risks such as a loss in brand or of a particular lego set losing its desirability over time. 

  1. Tax Liens

These investments are often touted as a quick and easy way to gain ownership of real estate. What happens is the investor takes responsibility for the tax liability of a property and if the current owner cannot complete payment for taxes owed during a certain period of time, the investor can gain ownership of the property by taking over the tax bill. The risk of this strategy that is often not mentioned is the risk of losing priority in the event of a bankruptcy. Another risk not discussed enough is the possibility that the property is simply not worth owning to begin with due to the maintenance costs or other factors that make it “univestable”. 

  1. Venture Capital

Like private equity, venture capital seeks to allocate money to private businesses for potential long-term profit. Unlike private equity, venture capital generally invests in faster-growing/less established businesses. The venture capitalist is generally looking to create a portfolio of smaller investments in risky businesses and hoping that a few will make a huge return. 

  1. Managed Futures

Futures are a type of financial product called a derivative. Futures obligate the investor to either buy or sell a given asset at a certain time. A managed futures strategy is simply the concept of arranging various “bets” about the future into a portfolio of futures with regards to a certain asset class. 

  1. Net Neutral and Net Short Funds

Net neutral and net short funds are a more nuanced strategy of making predictions about the future relationship between various assets. For example a net neutral fund could bet in favor of energy and bet against utilities. But to be “net neutral” their fund would have to have equal risk in both their positive bets and negative bets. You can probably guess a net short fund is the same concept but with added pressure on the negative prediction for future returns. For example a net short fund could bet against growth stocks. 

  1. Hedge with Options-based Volatility ETFs

Volatility has always been a factor in equity and bond investing. However, instead of simply investing in the underlying assets, some choose to bet on the future volatility or lack thereof. A common approach is to bet on an index called the VIX. This index measures the volatility of the S&P 500. Betting on future volatility can be both hard to predict and costly to get wrong. 

  1. Take a look at popular Growth stock funds

Dave Ramsey, the personal finance guru who is big on debt-free living, has a simple investing approach. He recommends investors split their funds between growth stocks, international growth, growth and income as well as aggressive growth. One risk with this thinking is that it is often not the case that growth stocks outperform the market simply because they have the word “growth” in their name. As of this writing though, growth stocks have outperformed value stocks over the last ten years so there are definitely periods of outperformance. 

  1. Equal Weight Funds

The S&P 500 index represents some of the largest public companies in America. The index weights each stock based on its size. A company like Apple will get a larger weight into the index than a smaller company like Spotify. One spin on this approach is instead of weighting each stock differently based on their size, an investor can equally weigh each stock. This ends up meaning Spotify and Apple both represent the same percentage of the overall portfolio. This has actually had historically higher returns but often higher volatility. 

  1. Sustainable Investing

The term ESG did not exist before the 21st century. Since the early 2000’s conscientiousness about the environment and system health has created a rise in awareness. Social and governance concerns (ESG) is a common way of categorizing companies who have shown more concern for sustainability. If you care about ESG investing there are a number of funds to choose from. 

  1. Emerging Markets

The word emerging seems to imply improvement, or at least some sort of increase. But often with “emerging markets” there are systematic risks that have resulted in these countries staying below the poverty level of more developed countries for decades. Emerging market countries have an intrinsic risk that doesn’t exist with most developed ones. For example, the government tends to be more stable, the infrastructure tends to be more intact, and the economy overall is less diversified. Stocks from these countries, while risky, can offer the potential for higher returns. For example during the early 2000’s while the U.S. dotcom bubble was bursting, many of these emerging markets’ stock markets experienced a rapid increase in stock price. 

  1. Developed Markets

The flip side of emerging economies is the developed economy. Most of these countries are either in Europe but also include Canada, Japan and Australia. Developed markets are the emerging markets of the past who have grown and stabilized to the point of having more diversified industries. The currencies, growth and government of these countries are more stable. While the risks are lower, there is also the concern for war, the possibility of a recession, or social unrest. 

  1. Currencies

Putting your money to work in currencies is one of the more niche approaches to investing. The concept is that you invest in a certain currency, or basket of currencies, and watch it increase in value relative to other currencies. However, the risk of investing in currency is extremely high. In fact currency should not be considered a true investment in the sense of stable income. The truth is that currency investing is more akin to speculation and should be viewed through this lens.

  1. Undeveloped Land

Bill Gates, the founder of Microsoft, has been purchasing large swaths of land in the middle of the country. Most of this land is farmland but the reason behind it is clearly for inflation protection. Undeveloped land is one of the more risky ventures in the real estate realm. This is because undeveloped land has not shown the promise of having demand for its use. 

  1. Horse Racing

On the massively risky side of the spectrum, horse racing is certainly an option. Besides putting your money into a no-name cryptocurrency and hoping to make millions, horse race investing is perhaps the top of the list of riskiest investments. Not only is there risk involved in the actual performance of the horse, there is security, health and reputational risk involved in putting your name behind a racehorse. 

  1. Pick best performing Actively Managed Fund

Dave Ramsey, the personal finance guru, has a long-time piece of advice that has many financial advisors scratching their head. He suggests you can scroll through a list of mutual funds, look at the funds with the best performance over their lifetime and the last decade, and pick the winners. However, what the best data we have on the history of “fund picking” says is the opposite. It is unsustainable and unrealistic to expect you can get lucky enough to pick the winning mutual fund and outperform over the long-term. I agree with this industry “common knowledge” but with one caveat. There is certainly the possibility that fund picking can work in rare situations. Perhaps part of it is luck and another part is analyzing funds in ways that are unusual for people looking at funds. 

  1. FAANG Stocks

Facebook, Amazon, Apple, Netflix, and Google. Those are the companies that represent this iconic and dominant list of companies in the S&P 500. 

  1. Preferred Stocks

Preferred stocks lie somewhere between the stock and bond worlds. Owners of Preferred stocks hold priority over other common stock owners. Usually the dividends on this are paid out in fixed amounts sort of like a bond. 

  1. TIPS

With the recent concern over inflation, the protection against inflation is immensely valuable. TIPS (or Treasury Inflation Protected Securities as they are formally called) provide a small yield like any bond does, but they also lock in a guaranteed return that matches the rate of inflation. While traditionally there is a slight reduction in returns due to the fact that there is added security with TIPS, the conservative investor can benefit from added certainty. 

  1. Annuities

Being part insurance and part investment, annuities have been around in one form or another for ages. The types of annuities range from fixed, variable or semi-variable. The goal of annuities is to provide some return of income along with added protection that the insurance aspect adds. 

  1. Cash

Cash is not often thought of as an investment but, similar to currency investing, cash represents a bode of confidence in that medium of exchange. Socking money away into your local country’s form of currency is a way to receive a small yield from your savings account and hopefully ride out the growth in popularity in that currency. The truth though, is that currencies, in their long history, have inevitably clapsted under the weight of oversupply and disaster. 

  1. NFTs

Nonfungible Tokens are a new form of digital art that have the potential to revolutionize the way we look at ownership. With NFTs you can purchase something online, and then have a way to prove your ownership, license it out, and even collect royalties from it.

  1. S&P 500 Index Fund

Warren Buffet claims that when he dies the money left will go into a trust that invests 90% into an S&P500 fund and the rest in treasury bills. This confidence in the U.S. stock market is not only well-founded, it is also practically simple to execute. In my view the major downside to this approach is both missing out on international growth as well as being hurt form economic disasters that end up striking the U.S. economy particularly hard. 

  1. Money Market Accounts

Money Market Accounts are a step up in terms of restrictions and yield from your traditional savings account. 

  1. Municipal Bonds

If a local government needs funding for a current project, how do they fund it? Often by issuing bonds they are able to complete their goals on time and with the lowest interest rate possible. These bonds are called municipal or muni bonds. Like government bonds they are generally going to pay you a higher rate of interest the longer you are willing to give them money. They do carry a higher interest rate they government bonds but also a higher risk of default in the even that particular municipality goes under. 

  1. IPO’s

IPOs or Initial Public Offerings as they are formally called, are one of the more sexy, new investments that inevitably get rolled out. An IPO represents a new company getting introduced to the public by the investment banker that’s backing it. Company insiders get the first dibs on the stock purchases and usually you will not be able to get a good deal by the time it becomes publicly available. Historically IPOs have been extremely risky. However in the rare event you make it big, your friends and family will come to marvel at your investment foresight. 

  1. Foreign Bonds

Why invest your fixed income allocation into just the U.S.. While by far the largest bond market is located in America, global bonds in developed and emerging markets provide both diversification and higher returns. 

  1. Make Your own Stock Index

There are many sites available that allow the investor to create their own stock filter and build their own portfolio. These sites allow you to better formulate where you would like to go as an investor and what risks you are willing to take. 

  1. Make Your own Crypto Index

On a similar vein, if you feel particularly convicted in the crypto sector, you may want to check out some of the crypto aggregators. 

  1. Bitcoin or Ethereum Mining Business

If you are one of the tech savvy believers in the future of crypto, why not profit by starting your own mining business. Some of the upfront costs can be egregious but there are a few acquaintances I know who have made considerable profits from this business idea. 

  1. Junk Bonds

While the fixed income space is generally one of the lowest-risk, lowest-reward places to invest, junk bonds provide the investor a rare opportunity to step up their aggressiveness. 

  1. Real Estate Investment Groups (REIGs)

REIGs are an interesting way to access a network of real estate inventors, capital and properties. 

  1. Turkey Rental Real Estate

There are a number of turnkey rental services available for whattobe real estate investors who don’t want the hassle and risk of fixing a property. 

A Blueprint for Young Investors

Anyone under the age of 30 can consider themselves a “young” investor. What steps should I young investor take to set themselves up for the future?

There are three steps each young person should take to retire with millions in the bank.

  1. Make sure your finances are ready to handle investments

Before you can invest your consumer debt should be manageable (meaning credit cards are paid off and there isn’t any significant amount of auto loan or student loans).

2. Set up a Roth IRA and begin automatic contributions

This shouldn’t take longer than 15-30 minutes. To set up bank connection with the brokerage account you need to wait a few days to verify the transfer. I chose to open my Roth IRA with M1Finance but you can set yours up with a number of others like vanguard, fidelity or Charles schwab.

3. Plan for big expenses like college, cars, house or first children

After setting up an automatic deposit of whatever you can afford each month, make sure to plan for major purchases coming up. A typical first house downpayment can range anything from a few thousand to $10k or even $20k.

These steps are only the beginning but for anyone who likes things simplified, this is a good place to start.

Keep in mind the advice contained in this blog is meant to be taken at the reader’s discernment. Talk to your financial planner to see how the advice may or may not apply to you. Ultimately you are fully responsible for you finances so make sure you have someone who is willing to walk with you on your journey.

Stock Market Sectors: Is This a Wise Investment Move?

There are some investment advisors who scare away from the idea of sector investing. However, with adequate research, one might find that certain areas of the overall market tend to outperform others in various economic seasons. But is the risk of overexposing ones’ self to sectors worth it?

Before I answer this question I’d like to list the 11 major stock sectors:

1. Industrials

2. Real Estate

3. Consumer Discretionary

4. Consumer Staples

5. Healthcare

6. Financials

7. Tech/IT

8. Telecommunication

9. Utilities

10. Materials

11. Energy

Before someone considers investing in specific sectors, they must recognize that over time there are periods and seasons in which one sector performs better than others. Some of the worst sectors to own in bear markets is Technology stocks like Google, FaceBook, Apple, Amazon and Microsoft. However as times get better, this sector usually outperforms the rest of the market.

My recommendation is to not invest in specific sectors and sector funds unless you are comfortable risking a significant portion of your portfolio. If you do decide to invest in sectors, pick one that is both posed to do well over the next few months as well as the next decade. You want both the fundamental and technical analysis working in your favor. Overall, stock sectors can be a very lucrative strategy for investing.

Renting Vs Buying – 4 Factors to Look At

Most people will spend the largest percentage of their income on housing. Deciding what kind of housing, and how much can be the most crucial financial decision you’ll make. Choosing between renting or buying can literally be the difference between retiring in the next decade or not.

I am going to cover the largest factors that determine which option is better. In a later post I will outline what my math and research has shown, and which options work best for which situations.


For the vast majority of cases, the rent vs buy scenario comes down to timing. If, for example, you plan on moving in the next few years, renting is almost always better because of the closing costs associated with buying. However as we begin to look at longer time horizons, renting generally becomes more and more expensive, relatively speaking.


In certain locations, like San Fransisco for example, it makes proportionally more sense to rent than it does to buy over shorter periods of time. This is due to the fact that there lies what I call a “Cali Premium” for people who buy real estate in any of the large metropolitan areas along the California coast. Because of this higher pricing, the cost to rent is comparatively lower than most areas of the country.


The numbers only make sense if the person doing the renting is investing the difference (assuming there is a difference between renting and owning) consistently. If someone simply rents over buying, the numbers skew back in favor of the homebuyer, who has automatically enrolled in a “forced savings plan.”

The Numbers

The last major factor to look at is the actual numbers and data. These are questions like, what is the interest rate on the loan, what is my rate of return on my investments, how fast does my property increase in value, and how fast does the rent rise year-over-year? These four questions are some of the most impactful when it comes to analyzing the numbers, but there are a host of others to ask as well.

Hopefully these insights are beneficial when making these important decisions. I looking forward to seeing how the actual numbers pan out in real life in the years to come.

The Purpose of Investing

The whole purpose of investing is to turn money into more money – it’s to be able to buy more things than you bought in the past. However, why not put all your money into savings? If I can lose “all” my money in the stock market, why not play it safe and keep everything in savings? There are two reasons. 1) You probably want to grow your money, not simply keep it safe. And 2) the value of money goes down over time. Wait, you might be asking, isn’t $1 always worth $1?

Yes and no. While $1 will always be the same, the amount that $1 can purchase generally goes down over time. Let’s use an example. Let’s say you have a small collection of 10 Legos. While you really love Legos, you only have these 10, so you tend to be really careful with them – you like them a lot.

One of your friends offers you an apple for one of your Legos. You refuse because you don’t want to have 9 left. However, a few months later, after Christmas and a birthday, you have received 36 more Legos. Your friend comes to you again and asks to trade one apple for two Legos. While you don’t like the idea of giving away more Legos, you don’t mind as much any more because you now have 36. So you do the deal.

What changed? Why were you willing to give more Legos up for an apple when before you wouldn’t even trade one for one? That’s because the Legos became less rare. This has to do with supply and demand. While demand for Legos stayed relatively the same, the supply increased, which decreased the value of the Legos relative to the apples.

We could get really technical with economics but for now the general principle can ring true with money as well. As the amount of money out in circulation, both physical and electronic, increases, the perceived value, and therefore the purchasing power of those dollars, decreases. In the last 100 years, inflation has gone up at about 2 to 4% per year.

The scary thing is that inflation continues even when your money isn’t growing. For example in 2008 when the whole real estate market and stock market crashed, inflation continued. Meaning, not only did stock investors lose 37% on their money, they also lost an additional 3%+ in purchasing power! Ouch!

In times of great economic panic gold often increase in price because it can act as a fear mechanism for investors when times get tough. When people in the market see inflation increasing and economic certainty decreasing, they often view gold, which has been used as money for literally thousands of years, as a safer location for their money.

The bottom line: real estate and stocks are fantastic investments for anyone looking to outpace inflation over long periods of time.

Stocks vs Real Estate – Which is Better?

Nearly all of the world’s billionaires have created wealth through business ownership. And the way most of them owned businesses was through stocks. So stocks, by default, are the vehicle by which many of the world’s wealthy have gotten there. Does this mean stocks are always the best investment over others? Not necessarily.

Is the list of richest people duplicatable? In other words, is it possible for someone starting off with nothing today, to buy and own businesses that eventually make them billionaires? The answer is clearly yes.

However there are other methods, less versatile that can provide the same type of opportunity: real estate investing. I am talking specifically about rental real estate, real estate built for the purpose of providing cashflow.

So if I’m a young person, deeply interesting in investing and committing to becoming rich, which paths should I take? Well real estate and stocks are both broad categories that are broken more specifically into numerous other sub-categories. So let’s take a brief look at your stock and real estate options:


Stocks, which are ownership certificates in little pieces of publicly traded companies, can be broken down into various groups depending on the size of the company. They can also be categorized based on the industry or other factors. There are two general ways to get involved with stocks: direct purchase of stocks (through a brokerage account of some kind) or the purchase of shares of a mutual fund (a “basket” of stocks that is managed by a group of investment managers).

Individual investment in stocks can be a fantastic way to build wealth if you meet the following requirements: 1) Able to control your emotions in favor of logic, 2) time commitment to researching and analyzing your choices and 3) patience.

The other stock option, mutual funds, is perhaps the least involved option. I recommend this path for most people who aren’t wanting to spend a lot of time on their investments. One thing to be aware of in this type of investment is both the type of mutual fund (large-cap vs small-cap) and the fees that the mutual fund charges.

Real Estate:

Real estate is a vast field with both commercial and residential properties to choose from. When considering an investment path you need to pick somewhere and stay consistent. Building your knowledge up in a specific area of real estate can go a long way in mitigating risk, which should always be a big concern.

The best way to create wealth with real estate is by buying rental properties. You can either buy single-family homes, multi-unit properties (2, 3 and 4 units) or commercial apartments (5+ units). You should only invest in real estate if you have both time, interest and are capable of networking and management.


Stocks can be good for people who have less time and more analytical skills. Real estate also requires analytical skills, but you also have to have interest and time to make money. The best choice for you depends on these factors.

Two Twenty-minute Tasks That Will Boost Your Financial Confidence

Most of the financially successful people we read about in magazines, books or see on social media are often portrayed as charismatic, energized, stage magnets. While a lot of them share many of these characters, what these men and women share more than any other trait is confidence. How did they get this confidence?

Confidence is often portrayed as something you can act or be or do. But while you certainly can “be more confident” simply trying to act this way won’t create the lasting change you’re looking for. When trying to build more personal confidence in yourself you have to be drawing this confidence from somewhere.

For example, while hosting at a sushi restaurant I have often heard fellow employees give me advice to “be more confident.” While I was certainly able to heed their advice and stand up straighter and with more confidence for short periods of time, I never was quite able to stick with it long term.

However the days I found it easy to be confident were the days I was diligently working, succeeding in customer service, and completing restaurant tasks with excellence. In a lot of ways it was a self-feeding cycle. I’d begin my shift with energy and confidence in my abilities and as the shift progressed my confidence would be reinforced by continuous action.

In our financial lives as well confidence can’t come from self-talk alone. Your mind has to feel both the emotional side as well as the logical side telling you to be confident. When you know that you are working hard, and have a plan it becomes easier for your emotional mind to reconcile the feeling of confidence with the logical one. Here are two major tasks you can do that each take about twenty minutes to complete:

1. Make a general (very rough) outline of where you want to be financially.

This doesn’t have to be complicated or long. Just take a piece of scrap paper out or grab your tablet and start brainstorming what kinds of things you really want to get out of your financially life over your lifetime. This task isn’t a one time event. You should be reinforcing this plan as well as refining the details of it, over the course of your life.

However this first basic exercise should catch the gist of where you’d like to be in the next year or two to help you get where you want to be with your long-term goals (5, 10 or more years down the road).

Organize your finances to see where you are

This step is just to catch a brief overview of where you money stands at this point. Get out your bank statements, look at your investment accounts, estimate the rough value of your home and the mortgage you have on it. Once you know your assets, liabilities, and the rough monthly budget you take in (income) and the expense you take out (expenses) you’ll have a very general picture of where you are.

These two, first steps alone will give you a sense of clarity about what really matters to you and where you are financially, thus what is needed to get you to the next step.

4 Aspects of Creating a Financial Forcefield

Who doesn’t like defense? We always talk about it when it comes to football, politics, war and most importantly our personal health. But how often do people talk about defending their finances?

Nearly all the financial advice is geared towards offense (how to make more money and make it grow) but hardly any time is spent on defending what we have. While nothing can ever be 100% safe, there are four steps or assurances you can take that will put you in the best financial position to succeed in your financial offense.

First though, what kind of things are their to defend against? There are three main groups that can sabotage your financial future: The government, other people/businesses and yourself. The four steps I will outline address each of these potential risks…

1. Documentation

While certainly the least exciting form of protection, keeping your records organized can go very far in keeping your legal, and tax responsibilities clean and clear.

2. Legal Entity or Investment Accounts Choice

Where you keep your money can be even more important than how you invest it. Whether you’re a business looking for legal protection (deciding between an LCC or C Corp.) or you’re an individual deciding how to protect your assets against taxes (Taxable Account vs IRA vs Roth IRA), deciding where to hold your resources can become increasingly important as assets grow.

Proper Reserves

Most people in the U.S. don’t have even a couple thousand dollars in case of emergency. What kind of protection do you think they have against unforeseen financial bumps in the road? Not much. Businesses need reserves as well. Setting aside money each month in what’s called a sinking fund (an account designated for a specific purpose) is a responsible step for any business or person.


The last of the four main lines of defense is insurance. Why isn’t insurance first on the list? Because by nature, insurance is meant to be a last resort. Using the first three steps and therefore not relying entirely on insurance is a fantastic way to secure yourself. However if all else fails insurance is a great last line of defense.


In each of these categories there are many specifics that I don’t have space to get into. However talking with your financial  or tax advisor about these things is certainly an overarching prerequisite to each of these forms of defense. Never take anything for granted. Finance is just as much defense as it is offense.

Can Debt Ever Be Good?

Most people have heard of Dave Ramsey. His financial advice has helped millions of people get out of debt and free up their financial inflow (their income). So is this simplistic advice the whole picture when it comes to debt?

The list of successful people who have made fortunes with debt says otherwise. When’s the last time you heard of a wealthy person who built a massive business without borrowing money in some sort of way? It’s not very common. In fact, the three richest people in the US, and the world for that matter (Jeff Bezos, Bill Gates, and Warren Buffet) have all built businesses or bought businesses that used debt regularly in their operations.

But why is Dave Ramsey so against debt? While I can’t get into his head, there are three legitimate reasons I can think of why he dislikes the idea of borrowing money entirely:

  1. Debt has to be payed back. While the future ability to pay off debt is uncertain, the requirement to pay it back is definitely certain. This represents risk.
  2. Debt gives control and responsibility of part of your financial life to someone else. While you are still responsible for taking care and utilizing whatever you purchased with the debt, you are no longer owning this thing altogether by yourself.
  3. Debt costs money and time. To borrow money it usually takes time and complications. On top of that there are costs associated with borrowing like origination fees, legal fees, and (of course) interest. While the rate of return you get on your money might be greater than the interest rate, you are involving more risk into your financial picture.

So, after close examination, do Dave Ramsey’s probable reasons and concerns for not using debt seem pretty well founded? I’ll leave that up to you. However they can be summarized in one word: Risk.

Debt represents risk. Whichever way you borrow money, whether for a home, real estate property, or college, recognize that debt is a risk that cannot be overlooked. While I believe debt cannot or should not be eliminated from our lives completely, taking a careful look at it can go a far way in eliminating pitfalls.

What Every Single Rich Person Has – And How To Get It

As the years roll by most people find that they continue to need to pay the mortgage or rent, buy food, and pay insurance. But There is a moment in everyone’s life, whether in college, after a life changes, or in old age, when the money coming in is less than the money that needs to go out.

Rich people don’t have this problem. While they certainly have their own financial problems coming in many different directions and flavors, lack of cashflow isn’t one of them.

However, no matter how much wealth, or how deep their pocket book, rich people all have one thing in common. This similarity runs through the tech titans, the real estate tycoons and the financial gurus. What is this key ingredient? Leverage.

Leverage, is actually a general term. There are many contexts in which leverage can be used and what it can mean. This kind of leverage to which I am referring is in the context of effort and resources – not necessarily debt.

In this context we use googles definition. Leverage is to: “use (something) to maximum advantage.”

You’re probably wondering what leverage has to do with Mark Cuban, Donald Bren, or Bill Gates. Mark Zuckerberg, for example, utilized the leverage of personal engagement to bring attention to his platform, in a way never seen before.

Leverage in the context of the rich is the act of utilizing resources in order to maximize and grow the results. The Rich in every industry have learned to use their effort, along with the effort of others to build great companies. Warren Buffet leveraged his money (in a non-debt way) to turn it into something bigger than he could have every achieved on his own by working a regular job.

So, how can you utilize this strategy of leverage? It starts with finding your “niche” or the thing that you believe you can provide the most value to people than any other. Pick thing one thing and begin building your skills and network in this area. As soon as you see some progress begin to leverage other people’s time, money, resources and connections in a way to build your brand.

Don’t make this one-sided. These should be give and take relationships in which you provide as much value or more to the other person. Often leverage involves borrowing each others skills in a net positive way. Begin learning about your area of interest and learn how best to use the power of leverage…