One of the Greatest Source of Wealth Outside of the Stock Market
As the new chairman of Investment U, I tried something new at the recent annual IU conference in Delray Beach, FL. Each speaker was asked to reveal to the audience their most profitable investments the most successful moneymaking technique they use for themselves. I called it, “Let’s get personal.”
I did this because I have learned over the years that what speakers say and recommend are not necessarily what they are good at themselves. Moreover, some so-called financial gurus are financially strapped. You would be shocked to hear some of their names.
I must have sparked some interest because the Investment U conference sold out with a long waiting list. (The conference is getting so big that we are moving it from Delray Beach to Phoenix next year – stay tuned for details.)
Today’s Most Profitable Investments Surprise #1: Is Your Own Business the Greatest Source of Wealth?
My own speech proved to be revealing. I shocked the audience by telling them that my most successful money-making technique was not in the stock market, although I have made one or two big wins, including a $2 million profit once. In the 30 years I’ve been filing a tax return, only once did I make more money from investments than my own business (publishing and writing).
I asked the audience the same question. “How many of you have made more money in your business than in investing?” Almost every hand went up!
The Forbes 400 Richest People in America survey confirms this truth. Only 10% of America’s wealthiest made their fortunes in the stock market. (Warren Buffett comes to mind.) Most became billionaires by creating a successful business.
Today’s Most Profitable Investments Surprise #2: Real Estate Is Better than Stocks
The audience also confirmed another truth about investing: Most people, including myself, have done better in real estate than stock market investing. Which is bigger? Your 401k plan or the value of your properties, including your home? I suspect for most people, the answer is real estate.
A well-known investment writer who I’ve known for 30 years is famous for recommending gold stocks and attacking real estate as high-risk speculation that could collapse at any time. But guess what? He’s made millions of dollars personally from his real estate holdings!
Real estate, prudently bought and held for the long term, has proven to be one of the most profitable moneymakers in anyone’s portfolio, including my own. It’s a forced saving plan in a real asset that has kept up with inflation.
The point here is not to suggest that you can’t make money in stocks. You can, and I have. But to make it big on Wall Street, you must be willing to put in the time and effort to become knowledgeable and wise in this unique business we call “Wall Street.”
Where to start? Read “The Wall Street Investor” chapter in J. Paul Getty’s How to be Rich. He states: “It is possible to make money – and a great deal of money – in the stock market. But it can’t be done overnight or by haphazard buying and selling. The big profits go to the intelligent, careful and patient investor, not to the reckless and overeager speculator The seasoned investor buys his stocks when they are priced low, holds them for the long-pull rise and takes in-between dips and slumps in his stride.”
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of Wall Street analysts.