Last updated on May 2nd, 2022 at 04:59 am

What do all of the above have in common? Yes, they are all “investments” of a type. They are to some extent also methods of gambling. What do I know about “Bitcoin” and the dozens of new variants of cloud currencies? Not much.

I understand about as much or more than the average person who has yet to throw money after this new shiny thing. The news broke a while ago about people who jumped on Robinhood which is a platform for buying and selling equities (stocks etc.) and how they showed those Wall Streeters a thing or two.

And, everyone knows about gold. Lots of tv ads are being run about gold and silver because the government is printing money like they expect to run out of paper. To be perfectly upfront, I do own a couple of gold coins which I acquired many years ago through a previous business.

Holding gold has its risks

I have held them just because they have been too much work to sell. Yes, I have made some money. I bought the coins for about $400 each and now they are worth about $1,600 or something like that.

Buying gold is a risk. Playing with Robinhood is a risk. Buying bitcoin, it’s a risk as well without any physical backup. All are risks so why are people jumping into them in the last year or so?

I believe that people were stuck at home during COVID and wanted to have some excitement. They used for the most part small amounts to bet and play around. Others increased their bets and are either licking their wounds are waiting for the next big thing.

The typical “safer” investments such as Bonds, Money Market Funds, Real Estate, and Equities don’t generally offer a quick hit or that high you get when you win at craps.

Buying cryptocurrencies for a few cents and “hoping”

I know several people who are playing around with the new cryptocurrencies buying at five cents and hoping to hit several dollars per coin. This is all good as long as you are not playing with your retirement fund or funds that you can not afford to lose.

I have told my friends that they can bet on sports games with as much security or go to the casino and play blackjack if they want at least some odds tilting in their favor. The ability to make transactions using electronic means makes it easier to play with your money.

Other than the gold coins that I own, I have decided to put my money into more traditional investments such as equities in larger companies and real estate. I am just old enough to see things come back around several times. The stock market always recovers as does the real estate market. Not sure what happened to all that money when bitcoin lost about 40% value in one weekend. By the way where is all that money?

Playing with Robinhood

Playing with Robinhood or other equities platforms is also risky, you can make money but you need to keep your eye on the ball and fully understand the industries (spaces) that you are betting on. I know people who have been buying options and as I said, you can make money but if you get distracted with, for example, your job and forget to sell, you can lose your shirt, car, spouse, and house.

Since I do not risk my money in such ventures, I feel free to advise those who want to play with their money. First, as I said, do not bet with money you can not afford to lose, ever. Second, if you lose big, don’t try to regain what you lost by making larger bets, that’s a poor strategy. Third, take your winnings and bank some, never use them in the future until you can fully replace your betting money with the income you earned.

I could go on and on. Read about casino gambling, the same rules apply. Never take money from your retirement funds to bet on any of the above. This includes gold. There are also costs to trade these equities and in my opinion, the people making the real money are those who are charging broker fees for buying and selling for their clients.

Take a look at brick and mortar – Real Estate

If you want to make more money, look at real estate. I happen to be a real estate broker but that does not color my opinion, just the opposite. I was first an investor then became a broker. This is no different than what I have explained above about knowing your industry. If you become a professional or as close to a professional as you can in the industry you are investing in, the better you will do. Unlike all of the other types of investments (except for gold), you can put your hands on your real estate.

Buying and selling real estate can be fun but I have to admit, it is a very slow process with some risk if you don’t know what you are doing. Working in this industry does not give you a daily rush of winning (except for the days you buy or sell something).

If you need that rush, you should probably seek professional help or use a small amount of your excess capital to spend. By the way, do not use your credit cards to buy bitcoin or equities. I know it’s tempting but the interest rates are high and using too much of a card will impact your credit score.

All investments have risks

If you have learned nothing from this article except that all investments have risk then you have learned the most important thing about investing. In a few years, there may be some new shiny object we play with so for now good luck.