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What are the top five investments for new graduates or fresh grads to invest in and to start to accumulate?
Marvin: If I’m a fresh grad, I’d still do stocks and I’d still go into business. That’s it. I don’t know if I’ll do bonds if I’m a fresh grad. I don’t know if I’ll do it. Anything that has maybe a high degree of risk, I will try it earlier on. So I think that’s how I will look at it. Anything that they understand that will give them larger upsides since they are still young, I think that would be better for them. So I suggest that they study. Look for investments that make sense for them, and then what they understand, what they think they can grow with, and then what they think will work for them. That’s what they should focus on.
But for me, I always tell them, start businesses as early as they can. And then when the businesses start making money, put them on the stock market. And then when the stocks make money, buy preferred shares, buy REITs, buy bonds, or later on, they can also buy real estate. So many of those.
JC: As Marvin said, what makes sense for you? Honestly, it depends per person on what opportunities you see, what is allowed for you. My situation is different from Marvin’s. My situation is different from my cousin. So It depends. You just have to honestly compare the different investments. A lot of the challenges with young people that I see, keep talking about it. They don’t actually put in the time and try, oh, how much is it going to cost me to buy a single-family home? How much is it going to cost me to, how do I compute the tax for that? How do I find out the HOA – homeowners association- fees? All of that. If you don’t put in the time to actually try to even check if it makes sense, then you’re never going to start. But for me, based on my background, I’d really go with the business.
Marvin: Business is really amazing. If I didn’t do stocks, I’d really do business because that’s one of the best ways to do it. Businesses will add money to you while stocks, help you multiply it. Here’s the difference between business and stock. With business, when you go home, you also take home the headache, especially if it’s a person you’re having problems with. But in stocks, there is none. When the market is closed, there is nothing you can do with it. But if you are a business operator, for example when you collect money from your clients but they don’t pay you, you bring that with you, and sometimes there’s even a feeling of resentment to it. Things like that. You bounced a check, or an employee steals from you, or how do you increase sales also, or do you have other competitors.
So there are so many factors that you can’t control. Unlike when you go into the stock market, after trading hours, that’s it, you’re done. You’re done. So I think that’s the difference. And I think it’s nice that when you’re still young, you start early for you to know what will work for you and why it also works for you. So that’s it. That’s just my take on it, I guess.
That’s the difference between being an employee and a business person. It’s true that you get to do what you want. But the flip side to that is, you also don’t get to do what you want. There are also cons in the stock market. The cons of the stock market are you don’t control it. In business, you can control it. Right? You can control it.
The misconception of other people is you invest to retire. That’s not true. You invest to do what you like if what you like makes money for you also. We’ve been brainwashed that if you’re an employee or retired, you should start your business. People think that being in a business is the end and all. There’s more riding in your shoulders. I’ve worked harder, longer, when I was no longer an employee compared to when I was still an employee. It’s more stressful.
JC: It really depends on you, again, on what pushes you, on what motivates you, if this is something you like. So Marvin’s advice is right. Do what really works for you.