I often write on Quora.com, where I am the most viewed writer on financial matters, with over 253.9 million views in recent years.
In the answers below I focused on the following topics:
- What are the biggest delusions that beginners have in the stock market, apart from the idea that investing is either very risky or a get-rich-quick scheme?
- Is working hard the key to being rich, or something else like working smart and being persistent?
- Is being a millionaire easier in China or Iceland, or is the question misleading?
- Is making money online in 2021 really that easy?
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It depends on the person.
Some of these things are actually contradictory:
- Some think the stock market is risky even if you are long-term, and even if you avoid stock picking, market timing and speculation in general. People like this are usually surprised to know that the S&P500 and other key indexes have never been down over a lifetime of investing. Other people are on the opposite side of the extreme and think investing is a get rich quick scheme.
- The media is a good source of information for stocks. Usually, the media make money from clickbait and sensationalism.
- That capital values are all that matter. Even many intermediate learners think that the FTSE has been stagnant for about twenty years and the Nikkei in Japan is down on its peak. It is down, but not adjusted for reinvesting dividends. Likewise, the FTSE is up nicely if you adjust for that.
- Investing is only for the rich. Most people who get wealthy investing started out at a young age and just compounded. The world has also changed since the 1950s, when it was mostly the rich who invested.
- It is easy to predict the future in markets.
- This time is different. Many people say this expression even after they learn you shouldn’t time markets. “I know nobody can time markets, but this time is different due to Trump maybe getting elected”……or we could put Covid or many other events here.
- The most important thing is knowledge. It is important, but emotional control is even more vital. I have met many knowledgable people who do worse than the average in investing! This quote sums it up.
8. Markets and certain events are correlated like unemployment, GDP, virus, government shutdowns etc. Every time markets go up when GDP is going down, or during an uncertain event, Quora is always full of bemused people. Yet historically, it is quite normal that these events won’t affect markets that much.
9. That markets going down is something to worry about. If you stay calm and just keep putting money in, you will benefit from the falls. Imagine how much money you would have made if markets had stayed at March 2020 levels for ten years, and you had invested more!
10. That certain assets, such as gold, usually outperform stocks. Most people assume, for example, that property usually outperforms even net of charges and taxes. We know that isn’t the case.
11. You should be 100% in stocks forever. Having some access to bonds and REITS also makes sense in a wider portfolio.
You can, because there are people who have done it before, and continue to do it.
There is a correlation, moreover, between conscientiousness and income:
Of course, conscientiousness isn’t just about hard work. It is also about trying your best, having attention to detail and so forth.
People who are conscientious are also more likely to work smart and find better ways to earn more, for doing less.
That isn’t being lazy, it is just rational. Many people work out that a penny invested, is more pennies you don’t have to work for in the future.
This leads me onto something though. Hard work, in isolation, can be silly in certain situations.
Conscientious, naturally hard-working people, if they are smart, eventually learn that.
Let me give you some examples
- What makes more sense? Save in the bank and lose to inflation, which means you need to save even more to break even on that lose, or invest in a sensible long-term fashion, which isn’t based on speculation? Let me give you a mathematical example. If you had inherited $100,0000 in 1990 (30 years ago), it would be worth $0 if you spent it. In comparison, saving it would be worth about $250,000 today as interest rates used to be higher. Finally, if you had invested it in just a plain vanilla index like the S&P500 or Dow Jones, and reinvested dividends, it would be worth about $1.5m today. Over a $1m extra yet that decision could have taken you ten minutes to make.
- If two people both invest the same amount of money, but one person starts out sooner, that person could become millions richer at 65, just because of compounding.
- What is more sensible in this day and age in business? Spending 12 hours cold calling every day or a few seconds promoting ads which have previously worked?
- If you are working long-hours, doing a job you hate, it might not make sense to try to work 120 hours a week, as it will destroy your health. Instead, it could make more sense to do something else in your spare time, and then make a career change.
- Taking advantage of luck can cost you seconds, but be worth millions. As inheritances get bigger, we will see that more and more. Some people will reinvest and others will just spend it. The same thing if somebody pays over the odds to buy your business. Some people get complacent, others take full advantage and use it as a springboard to other things.
Therefore, I find that when work hard is combined with smart work, it is perfect.
This is especially the case if it is done persistently. Many people give up working hard, or smart, if things don’t turn out well for a number of years.
Sometimes it takes time for the results to show up. In the aforementioned example on the inheritance, that person would have experienced many a bad year, despite the general trend being good.
Remember as well that in a digital world, working smart will only become ever more important.
That is because the end results won’t be linear. One post, which becomes huge on Instagram, could change somebody’s life.
So, hard work in isolation is less useful than combining it with smart work.
It is an interesting question. Believe it or not, many studies have shown that the Nordic countries are good places to become wealthy.
In fact, they can be even better than places like China and the US according to some academic papers.
We perhaps shouldn’t be surprised then that the number of millionaires and billionaires per capita is quite high in the Nordic countries, and wealth inequality is high even if income inequality is quite low.
Most people, liberals and conservatives alike, assume the opposite, but it is complicated.
However, by the sounds of your question, you are not a local.
Therefore, you have to factor in some things such as
- The number of people speaking English until you learn the local language. There are more in Iceland as a percentage of the population.
- How easy it is to get a visa. It is easier to get a visa in Iceland if you are European
- What industry you are in. If you are targeting volume, the mass market, then obviously China is better, due to the larger population. Moreover, in the modern world, you don’t physically have to move to Iceland or China to do business, especially if you are in the online service industry. It would therefore make more sense to be in an area where you can sell not only to both countries, but also to almost every country globally.
- How easy it is to get a well-paying job, if your plans aren’t to start your own business. If so, China has more opportunities for expats considering the size of the population. If you reinvest this money, you could become wealthy. Again though, it depends on your industry. According to numerous surveys, including HSBC, China has some of the highest paying expat salaries in the world in some industries. In comparison, the opportunities in Iceland are more limited.
- Ultimately, the fundamentals of wealth are similar globally – live below your means and invest the surplus well, create value if you start your own business and learn how to market it etc. There are some countries which make it easier to make money, but some of the core attributes are the same.
- Of course, it also depends on your family situation. If you have a relative who is local, or some heritage, it can make it easier to make money. For instance, when I was in China, I met many Americans who came from Chinese heritage, who made a lot of money. Many spoke conversational Chinese before they landed, then improved it, and have good cultural understanding.
Either way, in a modern, digital world, I wouldn’t just focus on two or three countries.
I also wouldn’t only focus on income. The key to wealth is to use a percentage of your income to buy assets, which go up above the rate of wage inflation growth.
Compounded over time, that is what drives wealth, regardless of income levels or where you live.
Firstly, nothing valuable is ever completely easy. Making a lot of money online or offline has never been easy, otherwise everybody would do it.
Making money usually requires one of the following things
- Certain personality traits like persistence, hard work or some others.
- A high-level of skill which can’t be easily duplicated
- Or a mid-level skill in something like online marketing which can be duplicated but not by everybody.
Having two or more of these is ideal, but at least one is usually essential.
For example, if you are a qualified and well regarded teacher, getting an online teaching side gig which pays well is quite easy.
Likewise, if you are a well-regarded graphic designer, there are many opportunities on freelancer websites.
If you are a well-regarded teacher or graphic designer who also happens to have capital and a digital marketing skill, it will be much easier to make more money.
For others, it can take time to build up an online profile. So, it all depends on the situation.
Making small amounts of money is easy. There are literally hundreds of ways to make cash doing odd jobs.
An example is doing surveys or something like that. For students and people looking for a small side-income, it is therefore very easy.
We are also seeing an increase in companies offering these kinds of opportunities. Just a few days ago I was watching an episode of Dragons Den.
The founder of the business has a model where if people install his software
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 253.9 million answers views on Quora.com and a widely sold book on Amazon
In the article below I spoke about:
- It is easier to be a millionaire now more than ever. Why aren’t there more millionaires out there? What was my response to this question?
- What financial mistakes will keep people poor regardless of income levels?
- Can you start a business with close to zero funding?
- Is now a good time to own post-Covid stocks?
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