Chasing Trends?
Some investors will tell you that you need to follow the trends of the future and forget the winners of the past because history has taught us that nothing is guaranteed.
And somehow everything else will fall into place.
I don’t know if that is true or not because I never follow that advice.
I’m sure it happens to some people but that feels more like luck than anything.
It’s easy for PewDiePie to say that he saw the trends of live gaming commentary when YouTube just started out because retrospection is always 20/20.
But how many people are still live streaming themselves (now the trend is on Twitch) while playing League of Legends in their parents’ basement and still trying to keep the dream alive?
In a similar vein, every finance YouTuber is talking about their latest investments in cryptocurrency or NFTs.
Why?
Because it is hot.
Because it is the future.
Because it will be going to the moon.
I can’t say for sure that these are valid, but they are “reasons”, by definition, why one would invest in an investment vehicle.
In the process of deciding what investment vehicle to invest in, it is critical to ask yourself:
Why are you investing?
Why invest?
More money.
OK.
I get it.
But why do you need the money?
That is the real reason for investing.
I invest for two reasons:
- To support the lifestyle that I want
- To make time for more important things in life (family, hobbies, adventures)
Neither of these things has anything to do with what’s trending in the world right now.
Don’t get me wrong.
If I could predict a trend of the future and get crazy rich investing in that trend I 100% would.
Instead, I choose investment vehicles based on whether or not others have found success within them.
Does it make sense to test the waters of a brand new investment vehicle or dive into one with a track record of rewarding investors with a consistent income stream?
(Special note: having an investment vehicle that will payout a consistent income stream is going to play an important part in your investment portfolio’s success. We’ll discuss that later.)
I choose the latter over the former every single time.
It’s why after more than 10 years of investing, going through different types of investment vehicles and different sectors within each investment vehicle, I have always come back to dividend growth stocks.
My goal isn’t to invest for years on end and then reap the rewards when I’m 65 and old and wrinkly.
My goal isn’t to invest for a fraction of a second and hope to hit it big once and for all either.
I want to get an investment portfolio up and get to the money-making AND money-spending part as quickly as possible.
I want my portfolio to send me a regular paycheck month after month just like my 9 to 5 job, without me having to put in that 9 to 5 work.
I know that you’re thinking the same way.
But don’t get your expectations wrong.
This isn’t a get-rich-easy financial-guru program. (We’ll get to the not so easy part later.)
I’m not about to show you a picture of me with the rented Lambogini and private jet that I got with the course money that you paid me.
Because I’m not talking about a fat, vice-president-of-an-multinational-company type of paycheck.
I’m talking about the kind of paycheck that is just enough to get by your daily expenses.
The kind of paycheck that sends your kids to a decent school, buys your wife a lovely rose and perhaps brings your family on the occasional outing.
The kind of paycheck that puts the bread on the table so that you can tell your boss to piss off as you don’t depend on his paycheck.
The kind of paycheck that allows you to pursue what you want to do and not what you need to do.
You see, freedom, dreams, and security are why I invest —
— as much as it is about money.
The 4 Nucleotides of Investment Vehicles
If you really want to improve your odds with investment success then I suggest only looking at the 4 Nucleotides of Investment Vehicles.
Yup, I made that term up and I love it.
What are the 4 Nucleotides?
- Stocks
- Bonds
- Real estate
- Foreign currency exchange
Before you freak out it’s important to understand that these aren’t the only investment vehicles you can make money in but they are the ones that give you the best chance.
The reason is that all four of these investment vehicles are valuable because they represent a valuable real-world asset.
Did you think it was a sheer coincidence that the famous investors all happen to be invested in stocks?
If I can’t connect an investment idea that I have for a portfolio to one of the 4 Nucleotides of Investment Vehicles, then I won’t touch it.
It’s not that I can’t build it up to be successful, but is it worth the effort?
Of course, each of these very large categories of investment vehicles can be broken down into smaller ones.
So if you’re interested in real estate, you don’t have to invest in residential housing only.
You can invest in office spaces, shop lots, farmland etc.
Just because there are only 4 investment vehicles in this list don’t believe that your options are limited.
The world of investment is way too big for the word “limited”.
Which is why you should be picky all the more.
There’s Nothing Sexy About Real Investing
I know what you are thinking right now.
Why are you talking about investments of the last decade?
I’ve come here to hear about 2% per day returns to 10X my net worth!
It’s not just about money — I’m also about investing at the cutting-edge of technology.
You know, the blockchain technology underlying Dogecoin and Pudgy Penguins.
Let me tell you this.
If your true goal of starting an investment portfolio is to quit your job, support your family, travel the world, or do something better with your life then why make things more difficult by jumping into an unproven investment vehicle?
What I’ve come to learn is that I can become really committed to an investment vehicle once I start making money with it.
My passion is living a happier life and getting the most out of it.
This isn’t tied to what I invest in but because investing is meant to help get me closer to these goals then I need to focus on investment vehicles that produce results.
Otherwise, I’m just investing as a hobby,
Odds are that if you are reading this guide you have an idea of the type of investment portfolio that you want to start.
Now go out and find a couple of other investment portfolios on blogs or on Youtube or on Twitter that are making the type of money you are imagining.
If you aren’t sure then shoot an email to the portfolio owner.
They don’t have to give you the exact amount, but if you explain your story then most investors would be more than happy to let you know if there is money to be made.
Can you find any?
If you can’t that doesn’t mean it isn’t possible but why hasn’t anyone else done it so far?
If you can find some then that is a good sign.
Too often beginning investors are stubborn and believe that their newly-discovered investment vehicle is going to lead them to money.
“I am going to be the first investor to see the potential in this newly minted alt-coin (which is going to the moon, by the way) that will also donate one-third of the proceeds towards providing a home to abandoned Shiba Inus.”
That’s sounds great.
And when someone tells me they are going to start an investment portfolio like that I encourage them to do so.
You should be living at the edge of technology AND helping those poor Shiba Inus!
However, and I don’t say this to sound cold, is that type of investment portfolio going to line up with your financial goals?
Is it better to start a portfolio with an investment vehicle that you know you can make money in so that later on you can help even more people or does it make sense to start a portfolio with a hype investment that won’t make much money but will help some people now?
This is something you will need to ask yourself and you need to answer honestly.
When you come across an income report by an investor who you admire, did they get to where they are with some niche investments?
Probably not.
Sure, their past ten posts may be on Cryptocurrency or NFT or some new investments in the Metaverse, but that’s just to play along with the social media algorithm.
The investment vehicle that brought in the money in the first place was most likely stocks, bonds, real estate or foreign currency exchange.
That doesn’t mean the investors in weird niches aren’t making money.
Plenty of them are and they don’t need to show income reports because their audience doesn’t care about them.
But if you think of this as a game then you want to stack the odds in your favor and this is how I do it.
Should You Narrow Down?
- Know what you need
- Understand why you need it
- Prioritize what you need
- Covert that priority into money well spent
You should have those memorized by now.
Why am I bringing them up?
Because this is where you’ll have your greatest advantage to doing well in reefing.
Let’s think of it like this.
You want to start a reef tank with LPS (large polyp stones) corals.
There are 1000s of aspects to consider in building up this ecosystem and they all require equipment and equipment requires money.
However, most of these aspects are trying to get at an issue that only has a slight impact on the ecosystem as a whole.
They aren’t focused on a specific type of system that’s aiming to achieve a specific goal.
Why is this important?
Let’s look at a computer example.
The Compact Gaming Computer
Let’s say you want to build yourself new computer for gaming.
It has to be responsive to the millisecond and it has to be of high resolution.
There are no compromises there.
A number of computer dealerships hit you up to show you their computer components.
Unfortunately, they show you components of all functions and purposes:
Cooling fans, storage drives, USB ports, along with CPUs and graphics cards.
However, one dealership is different.
They ONLY sell you CPUs and graphics cards.
Nothing else.
That means they are the experts in fast, high-resolution computer systems built for gaming.
They can tell you everything about them and they’ll know the best built for your system.
You notice them because they know what you need.
You pay attention to them because they understand why you need it.
You trust them because they have prioritized what you need to help you make the decision.
You know it’s money well spent because their priority attains the goals of your system.
How does this apply to reefing?
If every reef tank is trying to cast a wide net and you decide that you’re going to focus on an LPS tank dominated by scolys in low flow and moderate lighting, then you should have an advantage when it comes to cultivating scolys in low flow and moderate lighting.
Why?
Because everything that you do can cater to that individual species of organism.
The lighting schedule that you set.
The flow pattern that you design.
The filtration that you plan.
You’re the computer dealership that only sells CPUs and graphics card.
Now before you say anything I understand your hesitancy to this idea.
It makes perfect sense, but you don’t want to create a system for just one species of coral.
That’s just freaking boring!
But notice I never said that this is ALL that you do over the lifetime of your saltwater reef tank.
I said this is where you start.
All that you’ve done here is started to work on your micro-ecosystem.
You still have many more to build.
Oh, that’s right.
You have no idea what an ecosystem is.
So I guess we should talk about that next.
Fine.
Let’s learn about ecosystems.
But before that, you need to know what fellow reefers focus wrongly on, rather than focusing on ecosystems —
— Water chemistry.