Can I Really Double my Investments?
I have to admit, publishers keep finding ways to restate the same ideas each month their finance magazines and keep it somewhat fresh. Perhaps it is our own failure to take what they say to heart that keeps the message coming. Sort of like visiting a doctor and hearing them tell you to exercise more and eat less.
Some things are easier said than done and people continue to make a good living by reminding us to do the things we already know we should do.
Here is a quick summary of what I have relearned recently:
Smartmoney shows me how to double money in 5 years instead of the normal 10-15. Of course this means being aggressive. They do suggest some realistic steps. They don’t expect us to double our salary or win the Powerball but to instead:
- Invest in a more aggressive version of the Modern portfolio theory. Use low cost ETF to split your risk between biotechnology, water technology, microchips, small companies and emerging markets.
- Invest in rental real-estate, a simplified scheme of investing in something small you can manage yourself and take advantage of the preferential tax status of real estate
- Start a business, not just any business but an Internet business/blog. With the Web’s omnipresence and falling prices the barriers to entry are low but the competition is high so focus on skills an knowledge that give you an edge.
- Save more and spend less but instead of nickel and diming your way focus on big ticket items, think houses and cars where a 1% change can add up to a significant amount of money.
- Live a healthy life and save money on doctor visits. There is a known health-wealth correlation some of which is due to the fact that healthy people tend to have better social networks for support and advancement in life.
Nothing earth-shaking but I was surprised to see a financial magazine mention real estate as good investment. It seems that most of the mainstream finance magazines are quick to point out the time and money you have to put into being a landlord and minimize the positives.
Currently for us, the quickest way for us to double our investments will be to keep our saving percentage high. We haven’t set any fixed goals for 2007, but instead make a meaningful effort to save as much of our salary as possible. After this year we should have a better idea of a realistic savings percentage and any changes in net worth we can expect.
