I met up with a friend this weekend along with a group of his friends who I didn’t really know. When they found out that I write about money matters and personal finance, I received the question that I almost always receive: “So, do you have any hot investing tips?”
Now I know what they are looking for. They think that I might have an inside track on some company and that I will let them know which stock to buy. I also know that if I tell the truth on the best investments they can make, they will look at me like I’m a bit nuts. So in that instant I have to decide which type of mood I’m in and either brush off the question and move the conversation onto something else or give them my opinion.
Don’t get me wrong. The stock market is a great place to make money if you spend the time and do your research. It just doesn’t happen to be the place that the vast majority of people should begin to get the best returns on their investment.
If you want to get double digit returns on your money, before you look at the stock market or gold or bonds or any other of the “typical” investments, take a look at what you’re buying and how you’re buying it. Although that might sound strange, building a strategy to get the best prices on the items and services you purchase everyday is one of the best return on investments that you can make.
99% of the items you purchase you should be able to get for 20% or more of their retail price. Since that money is leaving your pocket, it is an instant return on your investment (no need to wait a year to get the return like in the stock market). The return on investment is tax free (you will need to pay taxes on all those gains you make in the stock market). The return on investment is 100% risk free (that gain in the stock market could also be a loss after a year).
Yes, in order to get these type of returns, you will have to be organized and spend some time plotting out a plan. To earn a good return in the stock market would take just as much time, research and organization if not more. The problem with this type of investing is that it isn’t sexy and it isn’t something that the guys can brag about to their buddies. I’m sure you’ve heard men brag something like “I picked this great stock that returned 17% this year” but when is the last time you heard a a guy say, “I got this great 25% instant return on my contact lense solution today.”
So even though I know that in most cases I will see eyes glazing over after a few minutes, I still usually give it a shot. And on ocassion, like this past weekend, one of them will seem to get it and I know that the energy giving a different opinion is worth the time and effort…