These days, there is no such thing as a secure job working for somebody else. My dad worked for Boeing for 40 years, starting after college graduation. It is extremely unlikely that I will follow a similar career path. Furthermore, I am convinced that by the time I am at retirement age, social security will be a joke, and employer-funded pensions will be a quaint thing of the past.
I have decided that the best way to work towards financial security is to try to become as financially independant as possible. This means a lot more saving than spending, and finding a way to make money that is independant of working for somebody else.
The Options? Well I though about several paths. Some of them are listed here. Only one really made sense for me. Real Estate Investment.
- The Stock Market. The big problem with stocks as I see it, is that you make an educated-at-best guess as to what a good investment might be, based largely on information those entities you are considering investing in want you to see, then hope for the best. People who are willing to constantly watch their portfolio and who understand the business-speak and all the market undercurrents can do well, but I have decided it is not for me. I just glaze over trying to read a 300-page prospectus. Also, with stocks, it is impossible to personally affect the value of your investment, unless you are Bill Gates.
- Mutual funds. These are better than individual stocks, if you find one that is managed honestly. At least somebody else has the job of constantly monitoring the portfolio. I do have some money in several of these (including my 401K) but I still don't have the ability to directly affect how well these investments perform.
- Real Estate Speculation. I define this as buying a property with the intent to flip it the short term and expecting to sell it for a profit without doing any work to improve the property. I ran into multiple real estate agents and others when I was looking for my South Park Triplex who tried to sell me on various schemes to get rich quick by stretching myself to the limit to buy multiple properties with the intent to sell them in a year for a 20% return. Well, if real estate prices were going to keep increasing at such rates indefinitely it might make sense, but that's just too risky for me. It's not really any different than picking stocks, except you have to plunk much more money down, and you have to do it on margin unless you are already rich. Yes, some people are successful doing this, but certainly many more have lost their shirts. And I don't look that good without a shirt on.
- Real Estate Investment. This is not the same thing as speculation. You buy a property because you can improve its value via remodelling. Or, you buy it because you can rent it out for income. Or both. Basically, you benefit financally from the property, even if appreciation rates are zero. Of course, if appreciation is at work, you gain even more. This is the route I have chosen, with my First House, and my current South Park Triplex.