More and more people ask me what they should do with their money. How to invest. How to save.
Since we as digital nomads sort of live alongside society we often do not enrol in mandatory pension schemes (which I think is a blessing, but that is for some other day).
Let me first of all tell you that you have to be very, very careful going forward. 2016 Feels a lot like 2008 all over again.
Mid-Long term it would be very difficult to come up with a solid investment plan at this point in time. And I would be very sceptical towards people who say they can.
I would argue that central banking policies have basically distorted the market in such a way that a normal, conservative approach to investing and wealth building has become almost impossible.
Yes, people will make money (as always) but for now the traditional ways of doing so (putting money in a diversified stock and bond portfolio) are no longer viable.
THINGS TO AVOID:
* Banks. Western banks are particularly shaky. Most have capitalization issues. What is even worse is the sneaky bail-in legislation passed across the board. This means that next crisis they will use depositors (your) money to prop up bad loans and banker bonuses.
* Stocks. Stocks have been propped up by all the money pumped into the economy because of quantitative easing. But fundamentals are very weak and a correction seems likely at this point.
* Bonds. For over 30 years bonds have been a safe haven. Yields have gone down. They are considered safe by most people.
This is exactly why they are in a bubble. A gigantic bubble.
One day yields will go up again. This simply means that the only way you can sell the bonds you currently own is at a steep discount because people can simply buy a bond with a better yield on the market.
* Collective investment schemes. All traditional investment and pension schemes are heavily dependent on above 3. They are not creative. They are the big dumb money that will never find an early exit. Put your money in these funds at your own risk.
THINGS TO LOOK AT:
Now, I already mentioned I can not give you any specific investments. There will always be bonds, stocks and banks that will do great.
But what you probably want to invest in is in tangible investments. Things like real estate and cash-flow businesses.
Gold & Silver seem to have bottomed but if you ever buy it make sure you hold physical in your hand OR in an safe with ALLOCATED amount (specific bars with your name on it). Paper-gold at the moment is sold 500 times the physical in existence so when you buy it via your bank, 499 people will have bought the same piece of gold. It is criminal.
Do also think about alternative investments.
Invest in yourself. Your life. Your skills. Your relationships. Your experiences.
Everything you learn can never be taken away from you. While you can lose your gold, you will never lose your skills.
Once you have learned to make money, you can do the same thing over and over no matter where you are.
Get training in your job or doing business.
Get a coach who can help you forward and improve your network.
Let someone ghost write a couple of Ebooks that will give you authority and cashflow via Amazon.
Learn a new skill that will always come in handy (like building websites or writing advertising).
Build an email list of people who trust you.
And yes, learn to invest. Get a good foundation before you take the plunge.
If your not mobile you can improve your home and invest in energy generating (or saving) equipment like solar panels or isolation that will pay itself back in the long run.
Be a bit creative.
I am very very worried about the state of the world economy in the short-mid term future.
People need to be careful how they allocate their scarce resources.
But his should not hold anyone back from building momentum and trying to create bigger and better things for the future.
Invest in yourself.