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Your Best Investment

A great investment: traveling to India and visiting the Vivekananda Memorial at the southernmost point

The financial markets work in ridiculous ways. It’s impossible to predict what is going to happen in the markets, and I think that age-old wisdom to “buy and hold” is completely ineffective in today’s economy. I wholeheartedly think that investing in the traditional equities market is a sucker’s game, and I’ve put my money where my mouth is.  I started investing when I was a kid (really) and stopped a few years ago after realizing that investing in stocks was no different from gambling.

There are people  – who are far smarter than me, with more  money and more powerful computers and better mathematical models – that are spending inordinate amounts of time trying to game the market and make a quick (and sizeable) buck. How to compete with that? Do I even want to?

100% of my assets are in cash-like assets (CDs, short-term bonds).

If you see what is happening to the stock market over the past week you’ll see a seeming return to bull-market glory over the past year peter-out and head south in a hurry. I think we have yet to see the real market correction, despite the massive drop we saw a while back (requiring a massive trillion-dollar bailout).

I do believe that there are other investments that make sense. For example, investing as an angel investor or in some other capacity where you actually have a say in the company direction. There are also cash or cash-like investments like CD’s, treasury bonds or annuities that can make sense (corporate bonds do not count, they can crash just like stocks!).

A  no-brainer way to earn a solid return on your money – that most people totally overlook – is to cut spending. Cut your expenses by 10% and you guarantee yourself a solid bump up in your savings. It’s totally within your control. Do it.

However, the most powerful long-term investment is to invest in yourself. Put your money into your own education and personal development – through training seminars or other skills development programs. Attend a TED Conference, a Tony Robbins seminar or a night class at a local university. Buy books by the truckload (or Kindle them) and actually read them! Explore the world and learn about historical monuments and locales by actually visiting them. Your most powerful investment is to invest in yourself.


  1. Shree says:

    What about inflation? Cash is quickly useless if interest rates are super low and high inflation kicks in.

    Saving 10% doesn’t work if its compounded year over year. Very soon I’ll have to live on $500 per month (which doesn’t work in US 🙂

    • YogiRavi says:

      Hey Shree, I’m more worried about deflation than inflation at this point :). It’s a long story, and I could be wrong, but with aging demographics and resultant weak demand (especially given that we are a net importer of good)…I think the next decade will see more deflation than inflation. There are also inflation adjusted treasuries (TIPS) if that is a big concern. At any rate, this will be a fun topic to discuss over some beers one of these days!

  2. Abdul Jiwan says:

    I am shicked to hear you say you are worried about deflation. At the rate at which the central banks, especially Mr. Bernanke, are printing money, you should very much be worried about sky-rocketing inflation. They are monetizing government debts and America’s debt is at 80% of GDP and climbing at 10% per year. In 10 years, the US Govt Accountability Office says that 93 cents of every dollar of federal revenue will be spent on major entitlements and interest costs alone.

    There is a reason that gold and silver prices are sky-rocketing and that gold was the number one investment of the past decade. In the next decade, you should be extremely worried about inflation.

    TIPS do not help because the government reported inflation stats are not valid and have been dramatically manipulated by Alan Greenspan and other central bankers over the years. The government stats vastly under-report inflation. Bill Gross at PIMCO has written extensively about this.

  3. Ali says:

    Hey Ravi!
    I am intrigued by this concept. Avoid getting carried away with others’ notions of wealth and theories about value.

    My friend Christy was showing me her pics from Level 1 and I recognized you! I was like, I love that guy’s blog!! Ah, to live in a future of extreme connectivity.

    Happy Tues

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