September 13, 2018

Ask IH: What other investment do you make?

I know this platform is about building products and businesses, but I'm curious if people here have other investment portfolio such as;

  1. Investing in other startup projects

  2. Buy Treasury Bills

  3. Buy stocks in existing business that are public. etc.

I know building your own business is the best investment you can make, I'm just wondering what other part to wealth you're taking beside building your business.


  1. 3

    Stocks.

    (And some cryptos, but I don't wanna talk about that. Sad story xD)

    1. 2

      I can feel your pain on the crypto :-)

    2. 2

      I understand the crypto market is volatile and one needs to be very careful before making huge investment. However, I want to know how your stock investment is performing? Do you have it in mind to sell them soon?

      1. 2

        It's performing well. I invest in Spanish blue-chips (I'm from Spain). I don't want to sell because for me they are long-term investments. I don't have time to study the market so I can't speculate, but I buy safe-bet stocks to get dividends. It's like having your money on your bank account but earning more money.

        1. 1

          Hey. As of recent I got interested in adopting the same strategy. I know very little about stock investments, but I am reading up.

          Could you recommend any books, articles or resources for learning more about dividend models and investing in blue chips?

          I'd really appreciate that :)

          1. 1

            I've learned the basics with two Spanish books (from a Spanish author). I could share with you digital copies of them, but I don't know if you can read Spanish 😅

            1. 1

              Ah to my regret i do not speak Spanish. Would it be too much to ask you for 3 bullet points of your 3 key learnings?

              It would help me a bunch to figure out what i need to look for in terminology. Literature on investments is quite overwhelming :).

              1. 1

                This is what I remember hahaha

                If your thinking about buying for the long-term investment, don't buy tech stocks. Technology changes very fast and one day a company is at the top, and next year is on the bottom. Think about energy companies, telecommunications companies, infrastructure companies... let's face it, these kind of companies are going to be here FOREVER (more or less), so the earnings are fewer but safer.

                If your thinking about the long-term investment, your goal is to earn money with dividends. So first study and observe the amount of money that the company paid with dividends in the last years.

                If the market goes down, DON'T PANIC. It's natural. And we're here for the long run, we're not here to buy cheap and sell high. In fact, if the price market drops you can take advantage of that and buy more stocks (if you're happy with the company profits). And we're talking about blue chips, they aren't going to bankrupt.

                Control yourself. At the beginning maybe you're dying to buy some stocks (because you've studied the market and past dividends and you think buying these stocks are a good bet). Don't hurry, wait for the best moment. If you feel that the price market is too high, just wait. Make a "wish list" and buy when it's appropriate.

                1. 1

                  Wow, this is very useful. Thank you :) Good luck with your investments!

  2. 2

    I think this is a great question! Building your own business is actually a high risk investment!

    I love the FIRE (Financial Independence/Retire Early) movement, and I think it meshes well with indie hacking. If you prepare yourself with FIRE, it's much easier to have a side project because you can enjoy what you're doing and have a stable base.

    I'm semi-retired with a lot of stock in a company I worked for, plus a large 401k (and yes, that means 10% fee for me). But I'm not FIRE-ready - for that, you should be around $1mil, depending on your spending habits. I think 1mil gives you around $40k/yr safely. I live by the low-expense index rule.

    1. 1

      Nice one @AndrewV. Good to know you have gotten hold on this one.

  3. 1

    I have a mix, I put money into my 401k, I have a handful of managed ETFs, and then some self managed stock funds that's primarily focused on blue chip divided yielding stocks. A good amount of diversification and risk management.

    1. 1

      Nice one. Good to see you're diversifying your investment beyond building a business. What is your expected returns say in 2 - 5 years in these investments?

  4. 1

    Real estate (lettings)

    1. 1

      Ok. Quick question, are you actively involve in this business such as flipping or you invested in building real estates and then started letting it out.

  5. 1

    A combination of index funds and stocks. Mostly index funds.

    1. 1

      Hey @dhruvg Do you have a background in investment? Actually this is my first time of hearing about index funds. I just did a bit of Google around it. Looks interesting

      1. 2

        Financial advice is really tough. The companies making large amounts of money are generally pretty manipulative, and it's easy to trick people into thinking they're going to get returns twice what everyone else is.

        Passive index funds generally perform as well as active funds, and active funds can destroy your investments during down years, because they will still take their 2% or so of your money.

        I'm not a fan of Scott Adams (Dilbert comic creator), but I think his investing advice is pretty common as the most legitimate and sound strategy.

        https://www.mattcutts.com/blog/scott-adams-financial-advice/

      2. 1

        I have zero background in investment and I don't trust my abilities to pick stocks nor do I want to spend time learning.

        Index funds are lower risk (you are basically investing in a basket of companies that share a common theme -- technology companies, S&P 500, emerging markets, etc...) and less volatile. Naturally, the growth rate is also less than if you were to intelligently pick Amazon or Apple at the right time. But given that I have put near zero effort in investing my money, I am happy with the return.