Back in the day, a fellow could stash his money under a mattress and sleep easy. No market crashes, no bankers speculating with his hard-earned savings, no fancy terms like “diversification” or “hedging.” Just a good night’s rest on top of a lumpy fortune. But times have changed, and so has the art of making – and losing – money.
Nowadays, you can double your money overnight, or lose it all before breakfast, depending on whether you believe the right salesman. But if there’s one thing that hasn’t changed, it’s this: If someone promises you easy money, you’d best count your fingers after shaking hands with them.
Let’s talk about risk and reward – the age-old dance between fortune and folly.
The Reality of Risk and Reward
Ever heard the phrase, “you don’t get anything for free”?
The idea of “the higher the risk, the higher the reward” suggests that if you want to make big money, you have to be willing to take big chances. You might invest in something promising a 12% annual return, and maybe it delivers—until the day it doesn’t. Or you can get 5% per day with “minimal risk” (a phrase that usually means you just haven’t spotted the scam yet).
You’ve probably heard the usual suspects:
- A “surefire” investment with guaranteed high returns.
- Bonds – safe, steady, and as exciting as watching paint dry.
- Gold – touted as a hedge against catastrophe but loaded with hidden costs.
- Currency trading – where your odds can be better than 50%, assuming you’re the house.
Each of these has its place, but each is also riddled with pitfalls, usually crafted by people who profit whether you win or lose. Investing isn’t about finding the one “perfect” asset; it’s about understanding how different assets work and how to avoid the smooth-talking sharks circling the waters.
Gold and Precious Metals: The Eternal Mirage
Gold, jewelry, and precious metals are often sold as “safe havens”—a store of value immune to economic swings. But the reality is more complicated.
You walk into a jewelry store and buy a gold ring for $2,000, thinking you’ve made an investment. The truth? The ring is likely worth closer to $800, thanks to a 200-300% retail markup. But that’s not even the worst part—because when you need to sell it, the buyer will offer even less.
Consider this:
- Your mother leaves you a gold bracelet bought when gold was $200 an ounce.
- She probably overpaid for it at retail prices.
- Now gold is at $2,900 an ounce, and you need to sell.
- The pawn shop offers you far less than its weight in gold, citing “market fluctuations.”
And that’s the game: Jewelers, brokers, and pawn shops control their profits by buying low and selling high. They don’t care about “fair market value”—they care about their bottom line.
If you think a gold broker is your friend, you might as well pull out all your teeth and hand them to the Tooth Fairy. At least she only takes them once.
So, does gold have a purpose? Sure—if you’re looking for a discreet way to store wealth or hide money. But if you think you’ll get rich from it, you’re in for a rude awakening. Emergencies force you to sell at the worst times, and when the bubble pops, gold drops like a rock. It’ll never be worth zero—neither will a chicken—but that doesn’t mean it’s a good investment.
The wealthy buy commodities from the poor and sell them at a premium to those desperate enough to believe in the next big surge. If they truly thought gold was heading for $4,000 an ounce, they’d be hoarding, not selling.
The Truth About “Value”
Nothing has inherent value—only what we collectively agree it’s worth. Money, stocks, gold, and real estate don’t have absolute value; they fluctuate based on perception. That’s why they’re great for trading but not necessarily for long-term ownership.
Think about it:
- A stock is only worth what the next person is willing to pay for it.
- Real estate fluctuates with interest rates, demand, and economic cycles.
- Gold may rise in price, but it doesn’t produce income—it just sits there, waiting for someone else to believe in it more than you do.
In the grand casino of life, the house always wins—unless you learn the rules of the game. Every investment carries risk, and the ones promising no risk at all? Those are the ones most likely to take you to the cleaners.
You can make money in any market—stocks, gold, real estate, or bonds—if you’re patient, informed, and not suckered in by get-rich-quick schemes. But if you believe the pitch of the smooth talker selling you “guaranteed” wealth, well, there’s a bridge I’d love to sell you.
So before you bet the farm, ask yourself: Do you really know the game, or are you just another player at the table, hoping luck is on your side?
Because if it’s the latter, you might as well hand your wallet to the nearest gold broker and save yourself the suspense.
BTW, when I first wrote this post about 3 years ago gold was $1,400 and I owned no gold.
Today, March 2025, it is close to $3,000, and I have most of my money not in stocks but Gold Etfs since I believe inflation will be blossoming for a bit, and the stock market is tanking . I sold almost everything after Trump was sworn in. This is not investment advise or a sales pitch of any kind. By the time you read this I may have sold everything again.
I typical do the opposite of what most people do, and in today’s world you have to be fast.
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