Billionaire Investment Tips Cause More Failure Than Success
- Author: William Asher
- Posted: 2024-06-14
A sad fact in life that you may have to face is that most people do not retire with a nest egg to live off of. Instead, they retire with a modest 401k and have to draw Social Security from the government in order to survive. This is because most people's investments do not pan out. In fact, most investments in general do not pan out. A majority of people end up either losing all the money they invest, or they don't actually accrue capital on it at all and it stays stagnant. Even with that information readily available, people who have made a ton of money in their lives love telling everyone else how to invest. Should these billionaires be taken seriously when they offer their advice? Generally speaking, rich people offering financial investment advice to poor people is a recipe for disaster.
Billionaires' advice fails primarily due to the old "It takes money to make money" adage. See, you have to consider something that billionaires never have to consider. You have to consider that you can only invest excess capital, and that (a) will not be much money at all, and (b) the investment opportunities will therefore offer less of a return to begin with. Take something tried and true like gold, for instance. It's one thing for a billionaire to purchase $20 million worth of gold. If it goes up $10 an ounce, they've made millions upon millions of dollars. How much gold did you buy? Maybe two ounces? So your return is only $20. You don't cash that out, of course; you sit on it and hope and pray. Over time, if that market dips by a few points in the opposite direction, you've lost your investment.
The point here is that billionaires offer this supposedly sage advice without realizing that normal people are limited by how much capital they can actually invest. When you invest a whole lot of money, you can turn a fantastic profit off of a few points of positive change, get your money out, and eliminate the risk. When you're investing lesser amounts of money, you have to keep your money tied up so long that you run more of a risk of losing everything.
This is why personal investments should go through investment brokers who know and understand your finances and your desires. Many people have listened to the advice of rich people, and they've ended up losing their money. Elon Musk could afford to buy $100 million in Bitcoin that worked out to billions upon billions in profit. Even if you purchased a few whole coins, and they doubled in price, you still wouldn't be close to a nest egg to live off of. You'd have to keep your money in the market, and everyone knows how that went for crypto.
Normal people cannot invest like rich people can. When you personally invest in something, it's likely going to be something that offers a very minimal return, yet offers even less of a risk. The idea being that when you're older and ready to retire, you hopefully have enough of a nest egg built up so that you can survive on it, not necessarily something to make you rich. That would require far too large of an up-front investment, and you would be running way too much of a risk.
After all, the Warren Buffetts and Bill Gates' of the world don't like telling you about all those investments that failed, do they?
For Most, It's a Game of Loans
Billionaires always love to act as if they were self-made and that their advice is golden, and you can follow their success starting from zero. What they never tell you is Donald Trump was loaned a million dollars to invest when he started. Buffett had multiple investors dumping money into his lap. Bill Gates had government contracts and a state-enforced monopoly. Elon Musk also initially became rich from government contracts and investments. On and on these stories go for all these wildly rich individuals wishing to give you sound investment advice. Of course, no one is saying that you should never, ever listen to a rich person's advice on what to do with money. There's some utility there due to the fact that these people manage money well. Though to think that they started with $20 in their wallet and made wise investments is just ludicrous. Most received loans and investments in some form of another.
For your own personal investing, get a broker that you build a relationship with and don't listen to the advice of rich people you've never met.
