How is the average person supposed to know what the #1 investment ideas are versus the catchy and effective sales pitches peddling false hopes and results? If you didn’t go to college and pick up a degree in finance then investment ideas can vary by quite a bit, and it can be extremely hard to figure out what exactly your best options are actually going to be. There are many different investment ideas out there, but that doesn’t mean they are all worth checking out. So to go with the old metaphor, how do you separate the wheat from the chaff?
First Understand That Nobody Knows
No matter how confident a person is in predicting future market trends, and no matter how many fancy degrees they have or how many hours they’ve studied, no one knows for sure what the future holds. Granted, people with more real-world experience and education often have a better idea of what can be done, however there are always changes in world politics, unexpected events, and technological advances that can completely change the game for everybody involved.
Safety of Original Investment Matters
One of the great finance and investment books of all time is titled “The Richest Man in Babylon.” This book by George S. Clason gives amazing financial advice that holds up even nearly a century later. One of the first things it recommends is making sure your principal investment is always protected. While taking advantage of stocks, 401(k)s, and Roth IRAs do require a little bit more risk than he would have liked, even among stocks you can diversify to make yourself safer.
This means staying away from investment ideas that are based on putting 100% of your money behind a hot stock or current hot hand. Remember that for every story of someone who somehow “knew” that Google was going to take off, there were thousands of people who lost everything because of Enron, the Lehman Brothers, or Washington Mutual.
You Need an Investment Plan You Can Stick With
In many ways investing is sort of like dieting. There are many different plans for how to get there, and it’s actually possible for many different strategies to work perfectly for the individual dedicating themselves to improving their life. With this analogy, it should become obvious that the #1 investment ideas are the ones that you can actually stick with. Make sure any long-term investment strategy you embrace are strategies that fall within your comfort zone for risk. Because if it doesn’t, it doesn’t matter how good it is, you’ll cut out with the loss before that big rebound.
There are many different investment plans out there and finding a good long-term plan is critical to pulling off your end goal. After all, you would rather have retirement years that are fun and full of joy and excess (or at least the ability to enjoy a small little bit of excess here and there) as opposed to poverty and stress from not being able to even scrape by.