Certainly, but many assets/activities will require more work to manage risk and generate returns. Look no further than real estate. You can make a great income and build a property portfolio, but you either have to manage it yourself or outsource that (at a big cost). Another avenue is owning your own business – that has huge growth potential but once again, it comes at the cost of time and effort.
In the end, owning bits and pieces of thousands of global companies is the best path to long-term wealth with little effort. The cost is being able to stomach the inevitable 50% drawdowns and needing cash at precisely the wrong times. Having the right risk management strategy is critical!
Thomas
2 years ago
I don’t think there is an alternative that is as simple to understand and doesn’t require any skill to invest in. However, for those willing to work harder for potentially greater returns (or additional diversification), there are other options. This article by Nick Maggiuli describes a few alternatives and their relative pros and cons:
Investment properties
REITs
Farmland
Small businesses
Peer-to-peer lending
Royalties
Your own products
As for me, I’m going to stick with stocks for the time being.
Catherine
2 years ago
I imagine many a person rues the day their parents threw out a baseball card collection with the debris of childhood past. Might have had an awesome rookie or two in there. Of course, nearly all old cards are of little value and that’s the rub with “collectibles.”
Rick Connor
2 years ago
I know several people who have built wealth through real estate. They have made this a full, or at least part time job. I’m not talking about rapid flipping of properties. I’m talking about owning 10, 20 or more rental properties and generating positive cash flow form each. This can be monthly rents, or VRBO-type rentals in a popular location. Either way involves a lot of work to build and maintain a portfolio. Searching for properties, understanding financing options, collecting rents, and maintenance can take up all your time. If you are very handy and like fixing things, it can be a viable way to build wealth.
John Goodell
2 years ago
Owning a successful small business that is growing/compounding or being a silent partner in one can be much more profitable than owning common stocks; however, access to those opportunities is difficult for a number of reasons. I believe most investors would be best served owning stocks for the long run.
Certainly, but many assets/activities will require more work to manage risk and generate returns. Look no further than real estate. You can make a great income and build a property portfolio, but you either have to manage it yourself or outsource that (at a big cost). Another avenue is owning your own business – that has huge growth potential but once again, it comes at the cost of time and effort.
In the end, owning bits and pieces of thousands of global companies is the best path to long-term wealth with little effort. The cost is being able to stomach the inevitable 50% drawdowns and needing cash at precisely the wrong times. Having the right risk management strategy is critical!
I don’t think there is an alternative that is as simple to understand and doesn’t require any skill to invest in. However, for those willing to work harder for potentially greater returns (or additional diversification), there are other options. This article by Nick Maggiuli describes a few alternatives and their relative pros and cons:
As for me, I’m going to stick with stocks for the time being.
I imagine many a person rues the day their parents threw out a baseball card collection with the debris of childhood past. Might have had an awesome rookie or two in there. Of course, nearly all old cards are of little value and that’s the rub with “collectibles.”
I know several people who have built wealth through real estate. They have made this a full, or at least part time job. I’m not talking about rapid flipping of properties. I’m talking about owning 10, 20 or more rental properties and generating positive cash flow form each. This can be monthly rents, or VRBO-type rentals in a popular location. Either way involves a lot of work to build and maintain a portfolio. Searching for properties, understanding financing options, collecting rents, and maintenance can take up all your time. If you are very handy and like fixing things, it can be a viable way to build wealth.
Owning a successful small business that is growing/compounding or being a silent partner in one can be much more profitable than owning common stocks; however, access to those opportunities is difficult for a number of reasons. I believe most investors would be best served owning stocks for the long run.