August 30, 2018
All you need is sufficient cash-flow to support your existence.
The difficult part is obtaining the means to the end.
For my money, the most obvious solution is cash-producing financial instruments.
Initially, the allure of fast-money that only trading can bring seems appealing.
Success with leverage can delude one to think that’s the answer.
However, with time comes defeat. A gambler rarely persists.
Margin, futures, options, derivatives: They have their place but are too easily misused and abused.
They are not the solution and in my experience bring far much more trouble than success.
It’s hard to get lost on a well-traveled trail. Sticking with what you know for sure works may not be as glamorous as going out on a limb. The well-worn path probably is going to take you longer to get to the destination than going for the shortcut, but it’s also a hell of a lot less likely to get you killed.
The capital gain game, doesn’t make a lot of sense. This is because market movements are completely irrational. Humans have a knack for justification. It’s possible to find ways to justify everything you do. Life is strange in that nobody really knows anything. There’s no one true universal definition of truth. Everything is subjective to your own personal existence. Nobody knows what it’s like to live a life that is not your own.
There is risk in everything, but excessive risk when an investment entirely depends on the subjective valuation of others.
People love real-estate. Many have gotten rich through rent-seeking.
Real-estate is it’s own universe but it plainly distills the essence of wealth creation.
Assets and the return those assets bring.
There are constraints in life. We live in societies. People are average, normal for a reason. Evolutionary this makes sense. The further away from the norm you stray, the greater risk of ruin you face. We’re social animals, herds on the Savannah. Safety blending in. Those who stray face hyenas.
Risk is deadly.
Consistent cash-flow. That’s what we want.
My solution is a very diversified portfolio of high-yielding dividend paying stocks.
More on this later..
August 30, 2018
R. J. Sullivan IV