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Passive Investing is a Luxury!

While Thrive’s primary investment focus is on the stock and bond markets, we often entertain questions about investments in other areas – individual stocks, real estate, private equity, franchise ownership, collectibles, wine, gold and other precious metals, cryptocurrency, and more. This list could go on.

All of us want our money to grow, but some of us have an especially strong desire to continuously seek out new ways to get the most for our money.  This article if for the latter group. As investors, it’s only natural to keep an eye out for opportunity, but there comes a point where “keeping an eye out for opportunity” becomes a frivolous pursuit of a higher return.

We thought it would be helpful to offer a reminder as to why the markets are the preferred investment option for the vast majority of Americans, and our preferred investment option at Thrive.

Low Maintenance

  • Your portfolio will not call you at 3AM with a plumbing issue, get lost or damaged, or require highly specialized knowledge and research. Everything is handled by the investment manager of the fund itself.
  • There is nothing wrong with real estate or other forms of hands-on investment, but most hands-on and private investments require a great amount of up front education and work. For the average full-time employee, taking on an investment property can add as much work as a part-time job. While it’s possible to achieve higher returns, it is critical to weigh the value of your time against the returns generated.
  • Individual stocks, marijuana stocks, cryptocurrencies, and options are all investment options that have come across our desks. While there isn’t any harm in investing a small portion of a portfolio into some of these more speculative investments, it’s important to understand that you have to actively manage, track, and do consistent research if you want to make a profit. In the same vein as real estate, remember to weigh the value of time spent researching a speculative investment against the possibility of higher returns.

Fully Liquid

  • Investments are accessible at any time! There are age limitations with retirement accounts, but aside from that, funds from an investment account can be available next day in most circumstances. Real estate, gold, collectibles, and other private investments do not have a readily available market to retrieve funds.

Low Commitment

  • Your portfolio is intangible, and therefore it can follow you wherever you go. The same cannot be said about an investment property, wine collection, or a safe full of gold. This flexibility allows more time to adjust to opportunity in today’s short-term job market. Job flexibility is an investment in and of itself, allowing a greater ability to achieve higher salaries earlier than employees tied down by physical investments or commitments.

Track Record

  • The markets have a proven history and track record of success over the long-term. No other investment has been studied to the same extent. The history and data behind the markets explains why investing is not speculative gambling, but rather a proven means to long-term success.

We love to hear about new investment opportunities and will gladly discuss any trending topics, but at the end of the day, please remember that passive investing is a luxury!