A few years back I decided to take the plunge into investing.
My wife and I had accrued a small amount of cash and we felt that the time was right to try our hand at investing.
Here in Japan the interest rate is .1%. That means I kept $10,000 in the bank for a year I can earn a whopping $10, yippee!
Staring the fact in my face when I looked at my bank book (super convenient I must admit) I thought there’s got to be a better way to make some money.
At first I figured oil might be a good investment so I started reading up on it and keeping my own tabs on things.
Then I added currencies to my “watch-list” and then various companies that I thought might do well.
In case you’re wondering what companies I was looking at – I just went with companies I knew and liked (like any new investor does).
I read a little each night from various sources on the web and slowly got a general idea of things.
After about 6 months of study I felt confident in my findings and shared them with my wife. My weapon of choice – silver!
She was hesitant at first and said she wanted to look into it herself before making any decisions.
She read up on it and finally agreed so we took our money out of the bank and bought silver at $16.
I later told my friend that what we had done and I clearly remember him saying, “So you’re speculating.”
Speculating and investing are often interchangeable because most of the people who invest are actually speculating.
What’s the difference? Investing is the study of evidence to form an opinion, while speculating is more like guessing.
I tried to share what I learned with my friend but he didn’t listen.
To him, I was speculating.
Since that time I have tried to tell people what I’ve found out but most are like my friend.
They like to save money and possibly invest in blue-chip companies.
They believe in the old vehicles that had worked for so many years.
I looked at all I read and felt that now it was time for commodities.
Today, 4 years later, silver is now at $40. And the stock market still is 20% lower than it was in 2008.
Will I sell? No. I’d actually like to buy more, if the price is more attractive.
These days I no longer track oil like I used to, nor try to figure out F/X (foreign exchange), I chose to focus on those things that I understood and suggest you do, too.
There’s no faster way to lose the shirt off your back than to invest in something you just don’t understand.
Take the time to educate yourself first, don’t keep all your eggs in one basket, and have something as a back-up plan are all parts of a sound economic plan.
With one, you’re in with a fighting chance. Without one, may the force be with you.