If someone tells you about an investment, your guard should immediately go up.
There are two scenarios which make their advice questionable at best: (1) They make money if you put your money into the investment or (2) they’ve already put a significant amount of money into the investment and are hoping you join them so they don’t feel like a fool.
Good investment advice requires these characteristics: (1) zero financial incentive for you to also invest, (2) a logical argument for why the investment represents good upside potential with limited downside risk, and (3) a history of good performance.
In almost every case in which someone earns commissions investing your money, you should avoid putting your money into the investment.
Studies of actively managed investment funds that have shown, multiple times, returns fail to meet passively managed index fund investments such as a basic S&P 500 index fund.
If someone ask you to put money into a new business, real estate investment, private equity fund, or any other exotic sounding opportunity, pass.
Put money into your own education, your own business, and into simple, easy-to-understand, investments such as index funds.
You’ll sleep better and will be far wealthier.