With the current state of the world with the COVID-19 pandemic rocking the world, the equities market has taken some wild swings in the last few weeks. That said, if you are a day-trader that could have made you a boat load of money! For most investors however that are passively invested in mutual funds in their RRSP, TFSA, 401K accounts…that market drop could have erased a lot of your returns that have been built up over the last decade or more.
I strongly believe there are 3 pillars to wealth:
- Business Investments
- Real Estate
Naturally, one would think I tend toward real estate and have a bias for that, and you would be correct! The reason for that is that I understand real estate the best – and warren buffet teaches us that you should pick things you understand to invest in. While real estate is IMO the most reliable way to generate wealth it is also the slowest, and takes a lot of management to do properly (which is why most people don’t do it).
Stocks are a great investment over time if managed, unfortunately a lot of RRSP investors do not manage their portfolios – and now they could be staring down the barrel of a retirement that is no longer certain. I was recently on a webinar with Kevin Harrington and he has some great advice for those worried about their retirement: “if you have got your investments wiped out in the market and you are close to retirement, start a business. You can’t earn that money back you will run out of time” Brilliant advice, I think everyone should have category 2 investments.
Even if you are not the business type, you can partner with someone who is experienced in business and gain all the advantages of starting one yourself. Something to consider for sure, also this could be a time to look at your portfolio and re-balance for the longer term into real assets such as real estate or others like precious metals.
To you success,
Respect The Hustle