There are 2 rules when it comes to investing
Rule 1: Never lose the money you invest.
Rule 2: See rule 1
And it seems I forgot the rules because I think I have lost $50,000.
Bad news even at the best of times. But finding out when you already have a dodgy ticker is not ideal. But my dodgy heart was the least of my worries.
Because I dare not tell my wife. She may love me dearly and is a kind, gentle soul, but one thing I have learnt is if you take away the opportunity to buy shoes from a woman be prepared to pay for it. And $50,000 will buy a decent collection, which means torture of the type banned by the Geneva Convention was duly to come my way.
My crime? I decided to invest in slightly risky alternative investments.
But the disaster could have been an earthquake which could have ruined my reputation and all the values I hold dear.
Whenever financial planners or those that offer ‘you cannot lose’ type investments to me, I tend to walk away and let someone else be the fool. But this mob felt different. I was dealing with a person who had the same values as I. And the deal was not a quick rich scheme or promising outrageous returns.
So together we put forward few things for my clients to look at, but I never pushed it. I am one of those advisors who won’t push my clients into something unless I am sure it makes sense.
So, I bit the bullet and invested myself. If it worked for me then I would be happy to push it a bit more. In the meantime, some of clients were talking to them too, but for one reason or another, fortunately none of them invested. It turns out I was the only fool.
A few weeks back my contact called me to let me know that even he was taken for a ride. Things were not what they seemed, and the business may go into liquidation. And that is exactly what happened.
There is a chance I may get something back. But unlikely.
It’s been in the media too. Families that have put their entire savings into this venture are now crying. Many have lost their total retirement savings which must be frightening. And this is where I feel grateful. At least I am not one of those.
And this is the real reason you need to take advice from people who know, have experience and knowledge. A good financial planner or advisor will never tell you to put all your eggs in one basket. If they do, something is wrong. If they tell you to put all your eggs in alternative investments, then you know they are probably making a crapload somewhere along the line. And when the Sh*t hits the fan, they are not the ones with crap on their faces because they never put their own money in. They are the ones driving off in the sunset in the Ferrari you probably paid for.
So, while losing $50,000 and the torture that is sure to come my way, I am still content knowing that the bulk of my investment portfolio is safe because it is spread around in various baskets. Every investor, I know has lost money investing despite the rules above. It may be falls in the stock market (like now), a drop in the value of crypto (like now) or alternative investments. Sometimes it is big enough to drag them down for a while. For many it is sizable but not enough to derail them.
It is the risk every investor takes. And it is a risk every investor is prepared to take because without this risk there is no chance you will create wealth or get the holy grail known as financial freedom.
Investing usually means losing money somewhere along the line. But if you spread it around in different baskets it probably won’t be the end of the world. Unless you have a dodgy heart and a partner willing to ignore the Geneva Convention.
I will let you know if I survive, but if for some reason my blogs no longer reach your inbox you will know my fate.