First, always follow big money.
Second, when it comes to life and money, I always try to do the right things in the right way the first time. And I recommend you do the same. Otherwise, you will have to spend more time and money later to either fix things, or redo them – in both cases it will cost you.
Third, remember to never work for free, otherwise you will regret being exploited by others. Also remember that there is no free lunch in this world. If somebody is offering you something for free, there are always hidden motives.
Where is the big money hiding?
Here are a few examples:
- Highly-paid full-time job. Find a highly-specialized stable job. That includes working as a doctor, lawyer, architect, corporate executive, computer engineer, investment banker, international school principal, pilot, notary public, accountant, etc.
- Own business. Start your own business and sell your own products under your own brand.
- Real Estate. Invest in residential and/or commercial real estate. The commercial real estate market is riskier, more complex and requires higher amounts of capital.
- Stocks. Invest in companies on the stock market. I always recommend investing in dividend stocks of multinational companies with predictable earnings and strong balance sheets (lots of free cash flow and low debt). There is only a handful of great companies out there to focus on. If you do not have time or expertise to pick individual stocks to invest actively, invest passively by regularly buying into an index fund that tracks either S&P500 Index, NASDAQ or the total stock market. And you are all set.
- Wealth management products. Keep track of decent fixed income financial instruments offered by banks. Open a solid savings account at a credible bank. Build the snowball allowing your numbers to grow exponentially over time. Just wait long enough and your patience will finally pay off. You may also consider riskier bonds such as treasury bonds or municipal bonds paying coupons on regular basis. But, stay away from the riskiest corporate bonds with CCC, CC, C or DDD, DD, D ratings as these represent high default rates and insolvency. Remember that a bond is a debt security, while a certificate of deposit (CD) is protected up to EUR50,000 in the EU and RMB500,000 in China. In the US, CDs are insured as high as up to USD$250,000 by Federal Deposit Insurance Corporation.
Ultimately, the best way to ‘follow big money’ is to develop your own investment or trading strategy based on your risk tolerance, goals, and knowledge. You can use the information from various sources mentioned above to inform your decisions, but remember that there is no one-size-fits-all approach to success.
