Different people need different investment advice. There are three groups of people who each need their own different kind of investment advice, the poor, the middle class, and the rich. Maybe I'll do separate introductions for each of those groups.
A few posts ago I said if I had ten thousand dollars I would put a thousand into AIRI. It was an expression of confidence in the stock, and an attempt to describe that confidence in a measured way, but it urgently requires clarification. (It was also a time and price specific buy rating, so consider that if you are reading this after July, 2014.)
Virtually everyone has some kind of income, and pretty much anyone who has some income divides that income between various purposes, like food, shelter, transportation, recreation, security, say, and, maybe, investing. What I'm suggesting is, after you have distributed funds to each of the other categories, when you get your paycheck, when you receive income, try to end up with a little money to invest ... and invest it.
You know what food, shelter, transportation, and recreation are, but what is this thing, security? It's your rainy day fund, and your retirement money.
It can be useful to name certain things. Food, shelter, transportation, and recreation could be called living expenses. Maybe you could add something like family in there. Security is just security, and investing is investing. Taken all together, there's living expenses, security, and investing. Those are three separate categories. Security and investing are not the same thing.
When I wrote what I wrote, about having ten thousand dollars, I was writing about investing money. That's money you have available for investing after you have set aside money for living expenses and security. Do build up a reserve for security, do save for vacations and cars and houses, and do eat. With the money that remains after you have done all that, invest.
Make no mistake, what I mean here, when I use the word investing, is gambling. Your investing money is your gambling money. You are going to treat your investing money one way: you are going to take chances with it. You are not going to treat your security money that way. You would not treat your vacation money, or your family money that way. But why am I advocating so forcefully for treating some of your money that way? Well, it's actually your moral duty to do some gambling. It's your duty to share in, what? The risk of the new, on behalf of society. And, if you take on that challenge, with a little of your money - or a little of your blood, sweat and tears - well, that is the road to prosperity. In a sense, a very real sense, it is your moral duty to prosper.
Investing is gambling, always, and, in a strange way, gambling is a form of giving. You know you may not get your investment back, you know you may not profit from it, but you give anyway. There are forms of investing that don't involve money at all, giving of your time, maybe your wisdom, and probably, if you do those things, you will receive a return, so, even though you are giving, you are investing. But there are whole realms of industry, of endeavor, that are what's called financial, and finance and money are another equation. They are, like gambling and giving, the same thing. It is your moral duty, even if you are a monk under orders of the Church, to practice finance.
Financial investments, or bets, produce two kinds of benefits, or have that potential. One is a financial return, for the investor. The other could be called spinoff benefits, or, productions. Gambling at the casino is a form of financial investing. I think it would be legitimate to use some of your investing money, some of your gambling money, playing at the casino. You could learn something about investing by making a sincere effort to win. There are reasons to think you shouldn't invest all your gambling money at the casino, and very compelling reasons not to invest security money or expenses money at the casino (other than recreation money, if you've actually allotted it to that purpose, or, say, family money, if it's a chance to spend time with family). The reasons for not investing all your gambling money (it's like the words are playing) at the casino is, in fact, not the risk - if you are smart about casino gambling, you can win, and, if you win, it'll be fun, but there is a legitimate risk issue which is it could become a hassle - no, the reason is there are other kinds of financial investing which also deserve your attention. It is your moral duty to play the casino, a little, and not be some kind of moralistic poop head about it, and it is your moral duty to consider other forums for investing, as well. If you manage to build a truly diversified portfolio of partnerships in business, investment in startups, investment in big companies, philanthropy, real estate, craftsmanlike hobbies, intellectual pursuits, and social life, chances are you will lead a kind of charmed life, unusually free of trouble. Not that trouble is a bad thing. The charmed person probably seeks it out in some way.
If, then, you are going to seek out some trouble, by looking for a financial bet, an investment, perhaps you should first look around you for local entrepreneurs to partner with, or even just in your mind, for business ideas. That's an investing arena you should eventually participate in. But if you aren't sure about that - and, when investing, your job is become fairly sure of things - there is the stock market. In a way, it's a place to look for partners. It works so well it is absolutely huge, and right at the heart of almost all of enterprise. It is, in fact, your moral duty to participate in the stock market. That doesn't mean you have to do it. You should only do what you are inclined to do. That last is wisdom, and it is your moral duty to be wise. But, if you are so inclined, it is your moral duty to participate in the stock market. And, if you are so inclined, it is first your duty to learn something about the stock market. If you are poor, there is one way, perhaps, you should invest, and, if you are middle class, there is perhaps one way, a different way, you should invest, and if you are rich, a different way again. Behind all three approaches is one unifying theory, which reduces, perhaps, to "learning to play the game". Are you ready to take the field? It might be useful for you to watch the game a bit. It might be good to read some boring books that will teach you possibly nothing, or who knows what? It might be good to play a little. Is there an investing equivalent of catch? Maybe this blog is it!
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