Many Americans feel anxious about investing their money because many aren’t sure how to choose the right investments. Still, the pressure on people to invest is high. It can seem like no matter where you go; you’re surrounded by messages telling you to put your money into certain stocks or funds. Despite the confidence of such assurances, not all these investments end up growing in value. As a result, many people experience uncertainty when it comes to making investment decisions.
A certain amount of risk should be expected when investing your money. After all, the nature of investing relies on making guesses about how certain assets will perform over given periods of time that have yet to elapse. People attempt to make educated guesses to maximize reward and minimize risk, but it doesn’t always work. There is always a chance that you’ll win big, and there’s always a chance you’ll walk away empty-handed.
I have seen both the positive and adverse outcomes of investing up close. I am a businessman in Colorado Springs and worked as a securities representative with Park Avenue Securities before advising wealthy individuals. I have tended to emphasize security when giving advice to clients, but I doesn’t believe that the most common strategies are always the safest or most predictable.
Popular Doesn’t Always Mean Reliable
Look at the Enron scandal of the early 2000s as a perfect example of how trendy investments can seem safe but wreak havoc on the lives of the people who buy into them. Many Americans lost vast amounts of money when Enron went bankrupt, but those who saw the disaster coming did little to warn them. Instead, the company told investors to stick to their guns and spend even more on company stock—all while top executives scrambled to sell their own before it became worthless.
Examples like the Enron disaster and the collapse of the US housing market illustrate a principle I would like to see more investors understand: Wall Street doesn’t always care about what happens to individual investors. I see traditional investments such as stocks and mutual funds as carrying more risk than most people realize. I am particularly critical of long-term options like 401ks and IRAs that rely on these investments to grow money. Misunderstandings about how they work convince people to be passive investors and to lock up their money until old age. These instruments often produce less wealth with more risk than investors are led to believe.
I recommend investing in smaller ventures located closer to home, such as local businesses. I have enjoyed being an investor in my community and an entrepreneur. I developed several businesses in Colorado Springs, with the help of other investors. These businesses provide an estimated 230 jobs to the area and I take immense pride in the quality of their offerings.
How to Invest in Secure Local Ventures
For many people, these kinds of investments are made possible by self-directed IRAs. Regular IRAs typically grant investment opportunities through mutual funds and stocks chosen by a custodian, but self-directed IRAs come with far fewer restrictions. They allow for investment in anything other than what is considered tangible movable property: coins, stamps, gemstones, alcoholic drinks, collectibles, and life insurance.
You might not be able to open a self-directed IRA for antique furniture, but you could easily open one to invest in real estate or a business in your community. That is what my partners and I do. We pool our money and build projects that earn revenue. I feel this offers me benefits over conventional investment techniques.
Real Money vs. Theoretical Money
Investing at the local level results in money you can see, touch and spend—whereas playing the market turns money into a theoretical concept; a figure that only manifests as a real asset when and if you get the chance to cash in on it.
Look to The Pinery at the Hill as an example of these principles. The Pinery project was an idea that I brought to a small group of investors in the mid-2000s. this was a period of financial upheaval for many across the nation. However, many of the investors who joined us for the duration of the project saw their money grow while those around them had losses. The Pinery became one of the area’s most sought-after wedding destinations and special events venues.
Giving Back to the Local Community
My success comes from a desire to help grow the community where I live, and I endeavor to give back a portion of my wealth. In addition to supporting more than 80 NGOs and charities annually, we host citywide events for organizations such as the Memorial Hospital and Children’s Hope Chest. I also authored a book, entitled Reunion, about the importance of making empowered investment decisions. In it, I wrote about how taking greater control of one’s finances can offer increased prosperity and more protection for themselves and their dependents.
Creating Value All Around
One of the most important pieces of the puzzle is to make sure his businesses provide as much value to their patrons as they do to their investors. You need to be active by paying strict attention to the policies at these businesses. My restaurants, like the award-winning Garden of the Gods Market & Cafe, use fresh ingredients and practice excellent customer service always. This also helps to support local farmers and stimulate the region’s economy.
Investing doesn’t have to be complicated. I watched what happened to good people who had entrusted their savings to traditional investment programs and I knew there was a better way.