Guard Your Future
By Peter Rizzo
Last week I was reading this article about Kevin Garnett, one of the all-time great basketball players, and his lawsuit against some former advisers over the alleged $77 million fraud. I am not going to be judge and jury and decide who is guilty and who is innocent, but, it is sad that all parties would have to go through this. Some of you might think, well, that guy made $700 million, $77 million is just a drop in the bucket. Unfortunately, we hear stories like this every day about people who have turned over control of their investments and retirement to unqualified advisers or people that did not have their best interests at heart and have been subsequently disappointed with the outcome. They might not have lost $77 million, but may have lost a considerable percentage just the same. We all realize that there is risk in any investment, but, the prudent investor makes sure that they take as many steps possible to mitigate the risk. We do not give and cannot give financial advice, but we can pass along investment strategies and tips that our successful clients use on a daily basis. Take a look at the following and see if it may help you moving forward in the future:
1. Invest in what you know. Don’t be afraid to use your past working experience or education to guide you and your investing. Many of our clients use their work experience to find investment opportunities. One truck driver bought trailers with his checkbook IRA and will lease them to a truck company. He knows how much he will lease for and what the exact return will be. There’s also a pilot who bought a simulator and leases it out to other pilots to give lessons. These are just two examples of people using their work experience and knowledge to gain investment profits.
2. If you are going to invest in the stock market, become a student of the market or find someone who is willing to share the risk. There are many financial advisors who share in the games and losses. On your successes, you will pay more, but in the end, you have someone invested in your success rather than just the amount of trades.
3. Don’t fall for the hot investment unless you know about all the ins and outs. Today, real estate is one of the hot investments and we talk to people every day who want to sink significant dollars into real estate, but have never flipped a house or even owned a rental property. Don’t be afraid to partner with someone who has experience in that field. You can lend money to a flipper and participate in the profit, or even try some of the new crowd funding opportunities available for real estate. Biggerpockets.com is a great site to get some good real estate investment insight.
4. Lastly, if you are going to profit quickly, you could also lose quickly. Bitcoin and Cannabis have been turning some significant gains, but, also some wild losses too – be prepared for a wild ride, and, if you don’t like roller coasters, take a ride down the lazy river like Warren Buffet and other successful investors.
We hope these investment insights help you realize that the more you can control your investments, the less likely you will become a statistic like Kevin Garnett.