Everyone seems to talk about the best investments, which one, which type, which market and without a doubt the best investment you can make is in yourself.

Think about it, with all of the information out there on the net, you have better access to information than the best Analyst did just 5 years ago.

Granted there is a ton of info that is wrong and irrelevant but still, you have at your fingertips every bit of information that you need to make solid investment decisions.  My family has always been a big believer in self-reliance and who better to look out after you money than you?

Here is an illustration on what happens when you improve your rate of return by just 4% over a portfolio over a 10 year period.  This is a portfolio worth $100,000

At 8% compounded annually we end up with:  $278,474.45 

At 12%  compounded annually we end up with: $389,203.15

At 16%  compounded annually we end up with: $540,075.13

and finally at 20% compounded annually we end up with: $743,775.32

The payoffs can be very significant if you educate yourself on the various investing techniques and learn how to tweak your game even just a little bit as you can see.

I myself, never look at investment if I don’t have a chance at getting at least a 20% annualized return.  What is interesting is that you often get what you expect.  Frankly most of the time I far exceed 20% in many cases but even when I don’t, even if I fall short by 50%, I still do Ok.  But here again, it is all about what knowledge base you have and what you are willing to settle for, and what you expect to come out with.

The game is won over time and not with any one trade or investment.  So, you should play for the long haul with the preservation of capital being first and foremost.   Because if you don’t have any marbles you can’t be in the game at all.

So, perhaps take an extra hour or two a week put it into improving your investment knowledge and the payoffs can be large indeed.

You may just find that your best investment is yourself.

This entry was posted on Friday, January 25th, 2008 at 8:12 pm and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.