Nathan Sykes

April 13, 2021

There's Lots Of Money Sloshing Around

This thing we call finance is quite a beast. $5,100,000,000,000 (that's $5 trillion dollars) is traded between folks each and every single day, according to the Bank of International Settlements. There's so much money sloshing around our systems each and every day, that we've had to create brand new asset classes to handle it all. And with everything sloshing around, I hear from folks almost every single day who have trouble successfully investing in one of these assets. There are plenty of examples, but day traders are the most jarring - 80% lose money over the course of a year, with a median loss of -36.30%.

Most recently, NFTs come to mind! I still don't know exactly what they are, but Saturday Night Live was very nice in trying to explain them to me. According to Slate, folks are already losing money on them!

I don't understand why folks just don't go back to basics. There was a time when all of these asset classes didn't exist. People still lost money, but it was more frequently tied to financial crises than them trying to take hold of their financial future by themselves. Index funds and treasury bonds don't have to be the only asset classes I'm talking about (though they are the most low-risk). Private equity, real estate, and investing in riskier stocks are perfectly reasonable as well.

Things like this aren't flashy or trendy, but it'll help you build generational wealth. They wouldn't have survived so long if they didn't work! They might be slower in the short-term, but they should pay off over the long-term. As a side note, I'm not trying to diss any specific new asset class! I'll never advise anyone to invest in trends like we're seeing today just because of volatility, but I understand why people do. People want to be involved with the next big thing, they want short-term gains, or they believe in the infrastructure. I truly believe that crypto currency will one day change the way we approach finance. I have a few hundred dollars in it just to see what happens, mostly for fun. But I'd never put any size-able portion of my portfolio into an asset class like Bitcoin.

If the trends or recent asset classes aren't working for you, I'd recommend going back to basics. Even if the stock market is too "tame" for you - there are plenty of other fish in the sea. Real estate is becoming a big one (and consistently has a lower cost of entry due to real estate investment funds like Cardone Capital), and I always need to shout out my preferred asset class of acquisition investing, like I do through PE.

They won't get you rich overnight, but they'll help you build real wealth!