Commercial real estate investment in mainland China reached a record RMB 463 billion ($68.5 billion) in 2018, although growth compared to the previous year
What is the fastest way to double your money besides folding it in half and returning it to your pocket?
Congratulations, you already think like a wealthy person.
The fastest way to double your money is to take risk.
This makes sense because one of the key principles of investment is “the higher the risk, the higher the expected return”.
When an investment vehicle offers a high rate of return in a short period of time, investors know this means the investment is risky. No one ever said moonshots are safe.
For you, risk is a requirement because you have a required return to meet your goals, which is doubling your money fast. If your assets based on the conservative assumptions about what the markets are going to give you over a certain period of time aren’t enough to allow you to meet your goals, you’re going to need to take more risk.
How much do you have btw? I would assume you have $50M or so and are based in the US.
1. Live it up in Las Vegas or Macau
Master gambling secrets and try your luck at the tables. You can make (or lose) millions of dollars in cash in just one night. (Don’t gamble if losing $100 is going to piss you off)
2. Invest / Trade
The first step is to understand your relationship with money.
See money as a tool, not as a status symbol.
Rich people are not rich because they spend money all the time. They are rich because they spend money wisely and that money ends up working for them. Don’t work for money, make money work for you.
The best money to invest is other people’s money. Make other people’s money and the smartest people work for you. Leverage your connections. Learn how to network and build relationship with successful people. Try to create a real connection. Ask them for some advice. Don’t feel shy. Convince them to believe in you and give you their money to invest and refer you to a few other well-connected people. You only have B amount of money…if you can convince 10 people and each gives you A amount of money to invest. You can make a lot more. Sell an idea and make a lot of money out of it. Bigger pool, more support. If someone gives you their money to invest, they would do XYZ to make sure you will make money.
Next, take risk.
Take risks you understand, don’t try to understand risks you are taking. Risk education should not aim at impressing a regulator but developing real-life competence.
Learn to manage risk. Calculated risk is a unique type of risk that requires you to do your homework. As important as it is to take risks to accumulate wealth, it’s equally important to be smart about risk-taking. Blind risk won’t get you anywhere, but intelligent risk — in which education and experience play a key role — is the mother of reward.
Always do the math. What’s the opportunity? What are the risks? What’s it going to cost you? What’s the revenue potential? Basically, is it financially sound? These are basic questions you need to answer. It’s okay to take risks. You’ll need to. But fundamentally any business model you engage with must be sound and the only way to determine that is through your own analysis and evaluation.
To win the game you have to stay in the game. Take calculated risks, mitigate your downside, avoid risk of ruin like the plague. There’s plenty of time left to play.
The further out the returns, the more they compound. The further out the risk, the more dangerous it becomes. Take short-term risks for long term gains. Never the opposite. Don’t be on the wrong side of exponential growth.
Establishing a company or putting your money in a low-risk fund and making 5-7% a year takes long time in regards to safety and return, because it’s all about getting wealthy over the long term. So, it’s definitely not fast at all. Don’t invest in any capital assets: don’t buy any long-term liabilities (planes, yachts, etc.) until you understand your cashflow situation and exactly how much these things cost to maintain.
✿ Private equity, Angel investments
Starting your own business can be a risky and slow move, but if everything goes well, it can certainly pay off. Another way to reap the benefits of a successful new startup without the stress of getting a company off the ground is to become abut doesn’t handle any of the day-to-day operations.
You will run the risk of financial loss if the venture tanks. However, you have to take risk and gain access to private deals if you want to grow your money fast. With $50M, you will have investment opportunities that the average Joe with a Fidelity/Vanguard account doesn’t have. You will have opportunities to invest in private transactions where you dictate the terms. You will pay lower fees because people want to earn your business. You will get a free look and analysis on a bunch of opportunities for you to select. And remember not to invest in leisure businesses like restaurants or sports teams.
The prospect comes with. You won’t have any say in how the company is run or the daily decisions active employees make. But you’ll earn a cut of any profits the business makes without putting in any long hours.
✿ Leveraged Oil ETFs
They are typically subject to high-volume trading activity and are known for high levels of volatility. For these reasons, the ETFs can offer investors exponential returns or losses if trades are made due to pesky emotions. The price of oil can be equally volatile, and for this reason, trading activity reflects an amplified level of volatility in its prices.
An example of this can be seen in the ProShares UltraShort Bloomberg Crude Oil ETF with a one-year return from 2014 to 2015 of 193%. Alternatively, the ProShares UltraShort Oil & Gas ETF has a five-year loss of 26%.
Options offer high rewards for investors trying to time the market. An investor who purchases options may purchase a stock or commodity equity at a specified price within a future date range. If the price of a security turns out to be not as desirable during the future dates as the investor originally predicted, he does not have to purchase or sell the option security.
This form of investment is especially risky because it places time requirements on the purchase or sale of securities. Professional investors often discourage the practice of timing the market, and this is why options can be dangerous or rewarding.
✿ Real estate Trading / Investing
For new investors, getting into the business of buying, selling, and renting homes may seem pretty ambitious. If recent history has taught us anything, it’s that housing isn’t a guaranteed investment.
But like any other area of personal finance expertise, real estate investing boils down to some simple basics. With the right strategies, patience, and a willingness to learn, it’s a discipline that can help you make strides on the path to financial independence.
That said, if you have the available cash and risk tolerance, investing in residential or commercial real estate may be a good fit.
There’re basically 4 strategies when it comes to real estate investing: Lipstick Flips (house flipping with minimal cosmetic improvements and repairs), Buy & Hold (buy and rent properties for ongoing income), Wholesale (flipping contracts for fast cash), BRRR&R (Buy, renovate, rent, refinance & repeat).
The key to success with rental properties is buying smart. Not every property is going to provide a good return or prove to be passive. Understanding is incredibly important. As the old adage goes — you make your money when you buy!
Investing in real estate is two-pronged: You could consider buying a single home to live in to be an investment, or you could invest beyond your home, into land to sell or stores . Branching out beyond your own home “depends on your market and the appetite for rental real estate,” In most markets, if you can handle the headaches and there’s room, it’s an option.
Investing in real estate is a worthwhile endeavor if you play your cards right. Here’s why:
- Cash flow: Rental properties are highly desirable for their ability to generate positive cash flow. One of the benefits of investing in rental properties is the loan pay down. If you obtain a loan to buy the property, each month your tenants are paying off part of the loan. Once the mortgage on the property has been paid off, your cash flow will increase dramatically, allowing your mediocre investment to skyrocket into a full-fledged retirement program. This means after your mortgage and other housing-related expenses are paid off, you have extra profit. Lots of people are even turning their primary residence into by renting out a bedroom or extra space.
- Appreciation: While not always, generally speaking housing values tend to appreciate over time. That means the longer you own a property, the more it should be worth. This is why many people refer to a home or a piece of real estate as the ultimate nest egg.
- Leverage: A lesser-known advantage of owning real estate is using the property as leverage. By consistently paying down the mortgage you have the opportunity to tap the equity you have built up. Talk about the ultimate rainy-day fund! If you own multiple buildings or buildings with several units under one roof, you have the option to cash out at any time.
- Tax advantages: Landlords have a few tax advantages over regular homeowners. They get to deduct items such as interest, insurance, maintenance, and even depreciation over time as business write-offs. Plus, when an investor sells a property and exercises a to reinvest the proceeds into a new property, the person can defer all capital-gains taxes.
What I love about real estate is that you can build your own strategy.
But in the spirit of diversifying your assets, bear in mind that many homeowners already find real estate to be the largest asset in their portfolio, and cautions would-be real estate investors to be wary of weighting their portfolios too heavily toward one kind of asset.
Once you have a property that is established and fully rented, it’s mostly a matter of managing the property and keeping it performing well.
Additionally, there are professional property managers who can manage your property for you, usually for around 10% of the monthly rent. This professional management can make the investment much more passive, but will take a bite out of your cash flow.
* Here’s a few thoughts about how to take advantage of the situation if your home value has increased by 50% in two years:
Remember, value, like the concept of heat in chemistry, exists only in transfer. Things are “worth” only what someone will pay for them – and only at the moment that they do pay for them. Selling it at a price you believe to be above its intrinsic value is the only real way to capture that inflation. And you would do that if and only if you planned to buy something more reasonably-valued somewhere else.
However, it’s worth doing one calculation. Take a look at the purchase-to-rent ratios of a few very-comparable properties to get a sense of what you’re looking at in the case of your specific house (some Case-Shiller numbers may help, if you want to do a little homework). Basically, figure out whether it makes more sense to rent or to buy within your area right now. That’s a decision that varies by city/region and changes over time. Your calculation is, is the effective monthly rate of paying a mortgage on a property (taking into account the average tax impact of mortgage-interest deductability, as well as insurance and taxes), higher or lower than the asking rent of very closely-comparable properties? That’ll tell you whether it’s cheaper to rent or to own right now.
Having answered that, you’ll want to look at the pace of housing construction starts within your area, and regional immigration/emigration, to figure out what your market is likely to do in the next 3-5 years. Don’t listen to opinions that aren’t backed up by hard numbers and comparative analyses, because all real estate people are always trying to hype their own areas or projects. Run the numbers yourself, relative to some other areas, and come up with a well-considered hypothesis.
Having done this, your moves are as follows:
- If it’s cheaper to rent than to own, and you expect prices to stay roughly flat, then you should sell your property, capture that inflated value, and rent a place nearby.
- If it’s cheaper to rent than to own, and you expect prices to increase (a rare combination), then you should probably do nothing and wait for prices to hit a higher point of inflation.
- If it’s cheaper to own than to rent, and you expect prices to stay roughly flat, then you should rent your place out (which ought to more than pay for the mortage + taxes), live somewhere as cheaply as you can for a while (likely renting, so as not to tie up your home-ownership capital with a down payment on your own living situation), and look to buy more places with your profitable situation which you can then rent out.
- If it’s cheaper to own than to rent, and you expect house prices to increase (i.e. to balance out the own-vs-rent numbers), you might consider borrowing against your equity capital in order to buy additional places nearby, such that you can rent them out. This is a process fraught with perils, but if done right can earn you all sorts of good returns and unearned income in the form of net rents (above your mortgage, tax and maintenance costs). As house prices increase, more people will choose to rent, driving up rents that you can charge, increasing your margins.
Moderately leveraged (70-80% LTV), in a mix of geographies, managed by local property managers. Aim for 8-10% ROE assuming 90-95% occupancy. Buy new (direct from builder) when you can. Consider holding the largest properties directly as an individual (rather than, say, through a trust) in order for the depreciation to be deductible against other income – depending on tax-structuring advice.
This of course assumes your only considerations are to maximize your personal rate of return, and ignores things like “it’s annoying to have to move”, “places I could move to aren’t as convenient for work”, etc.
Let’s say that you want to invest in real estate, but do it in a truly passive way. You can do that through a real estate investment trust. This is something like a mutual fund holding various real estate projects. The fund is managed by professionals, so you never have to get involved.
Real estate investment trusts (REITs) offer investors high dividends in exchange for tax breaks from the government. The trusts invest in pools of commercial or residential real estate.
One of the big benefits of investing in REITs is that they typically pay higher dividends than stocks, bonds, or bank investments. You can also sell your interest in a REIT anytime you like, which makes it more liquid than owning real estate outright.
Due to the underlying interest in real estate ventures, REITs are prone to swings based on developments in an overall economy, levels of interest rates and the current state of the real estate market, which is known to flourish or experience depression. The highly fluctuating nature of the real estate market causes REITs to be risky investments.
Although the potential dividends from REITs can be high, there is also pronounced risk on the initial principal investment. REITs that offer the highest dividends of 10 to 15% are also at times the riskiest.
✿ High dividend stocks Trading / Investing
By building a portfolio of high dividend stocks, you can create regular passive income at an annual rate that is much higher than what you get on bank investments.
Just as important, since high dividend stocks are stocks, there is always the potential for capital appreciation.
In that way, you can earn passive income from two sources — dividends and capital gains.
You will need ato purchase these stocks and complete the research needed.
✿ High Yield bonds Trading / Investing
Whether issued by a foreign government or high-debt company, high-yield bonds can offer investors outrageous returns in exchange for the potential loss of principal. These instruments can be particularly attractive when compared to the current bonds offered by a government in a low interest rate environment.
Investors should be aware that a high-yield bond offering 15 to 20% may be junks, and the initial consideration that multiple instances of reinvestment will double a principal should be tested against the potential for a total loss of investment dollars. However, not all high-yield bonds fail, and this is why these bonds can potentially be lucrative.
✿ Currency Trading / Investing
Currency trading and investing may be best left to the professionals, as quick-paced changes in exchange rates offer a high-risk environment to sentimental traders and investors.
But most, which is not to say 99.99%, if you don’t know how to make profit on forex so please don’t try this at home. If you make mistake, you will lose a lot.
Trading on the forex market does not have the same margin requirements as the traditional stock market, which can be additionally risky for investors looking to further enhance gains. If you make mistake, you will lose a lot.
The stock market is not a zero-sum game. Over time, companies receive capital at varying rates, and they invest this to build assets (physical assets, software, organizations…) which they can then harvest to make increasing profits. Some people do better, some people do worse, but in the long run you’re up 6–8% CAGR.
The FX market is a zero-sum game. For every winner, there is an equal loser on the other side, unless you’re a multinational corporation trying to rebalance its currency holdings. You can’t just buy and hold and expect an appreciation; the average expectation is zero change.
The factors that predict these changes are well-understood by the professionals in the FX business, such that if you do spot some trend, it has likely already been priced into the FX rate. There are hedge funds who have been running astrategy for literally decades. Your advantage here is negative; anyone who does have an advantage in the market is shifting your average expectation from zero into negative territory.
Those investors who can handle the added pressures of currency trading should seek out the patterns of specific currencies before investing to curtail added risks. Currency markets are linked to one another, and it is a common practice to short one currency while going long on another to protect investments from additional losses.
- Initial Capital: Like other asset class investing/trading, you’ll need a relatively large sum of money to begin with. Get a job to arrange a sufficient cushion of capital (at least $100K for trading). Open a forex account then deposit something into it every day, until the capital is large enough. Trade manually to grow your capital. Once the capital is large enough, pay a freelancer to automate your trading style from your salary. Reinvest until the profit reaches $1M.
- The returns: How much “could” you earn? I suppose you could get on the right side of some George Soros-esque attempt to break a currency peg or something, and make 10x your money, theoretically. But it would be totally dumb luck and astronomically unlikely.
Don’t do it. Stick to investing in stuff you understand, like Buffett said.
✿ CBOE Volatility Index — or VIX Trading
You can grow your net worth quickly by using one of Wall Street’s favorite trades: short— or VIX Trading.
It’s a trade that’s worked extremely well this year: The VIX has fallen 19% as investors have looked unperturbed by middling economic data and escalating geopolitical tension. The so-called stock market fear gauge even went as far as to hit a record low on July 21.
Choose your investment vehicles, they can be, e.g, the(VXX) and the (UVXY). Apply appropriate strategy to shorting them. Both are popular exchange-traded products used to bet on the VIX. The VXX is the biggest vehicle of its type, attracting more than $14 billion of inflows since 2012, according to data compiled by FactSet and reported by Dealbook.
If you own a company, you can also try these ways:
✿ Initial Public Offerings
Some IPOs, such as Box’s in early 2015, attract a lot of attention that can skew valuations and the judgments professionals offer on short-term returns. Other IPOs are less high-profile and can offer investors a chance to purchase shares while a company is severely undervalued, leading to high short- and long-term returns once a correction in the valuation of the company occurs.
IPOs are risky because, despite the efforts make by the company to disclose information to the public to obtain the green light on the IPO by the SEC, there is still a high degree of uncertainty as to whether a company’s management will perform the necessary duties to propel the company forward.
✿ Venture Capital
The future of startups seeking investment from venture capitalists is particularly unstable and uncertain. Many startups fail, but a few gems are able to offer high-demand products and services that the public wants and needs. Even if a startup’s product is desirable, poor management, poor marketing efforts and even a bad location can deter the success of a new company.
Part of the risk of venture capital is the low transparency in management’s perceived ability to carry out the necessary functions to support the business. Many startups are fueled from great ideas by people who are not business-minded. Venture capital investors need to do additional research to securely assess the viability of a brand new company.
✿ Foreign Emerging Markets
A country experiencing an industrial revolution or a new political regime that encourages development can be an ideal investment opportunity, as it has been for China over the past ten years. Spurts in economic growth in countries are rare events that, though risky, can provide investors a slew of brand new companies to invest in to bolster personal portfolios.
The greatest risk of emerging markets is that the period of extreme growth may last for a shorter amount of time than investors estimate, leading to discouraging performance. The political environment in countries experiencing economic booms can change suddenly and modify the free market or capitalist economy that previously supported quick growth.
When building wealth, choose direction over speed. If you’re pointed in the wrong direction, it doesn’t matter how fast you’re traveling. Inversely, if you’re locked on to your desired destination, all progress is positive, no matter how slow you’re going. You’ll reach your goal eventually.
When it comes to the goals that are most important to us in life, we tend to jump tracks the second we stop perceiving forward momentum. We’re choosing the illusion of progress over what really matters.
Take a little time now to study the map. And once you’ve charted a route that will get you where you want to be, stay the course. You won’t move forward all the time, but if you trust the process, you’ll look back and be astonished at how far you’ve come.
When building wealth, choose consistency over numbers. The greatest factor determining your success is how well you are able to maintain consistency in your efforts. You’ve got to have consistency.
It’s like you can’t go to the gym for 9 hours and get into shape. It doesn’t work. But if you work out every day for 20 minutes, you will absolutely get into shape.
Many highly risky ways may score you fast cash, but getting true, long-term financial stability is a deliberate process. The consistency just isn’t there in risky investing, especially if you’re not an investment professional.
Given enough time, many investments have the potential to double the initial principal amount, but many investors are instead attracted to the lure of high yields in short periods of time despite the possibility of unattractive losses.
There are no shortcuts or silver bullets. Don’t pursue any get-rich quick schemes. There are no get rich quick schemes. That’s just someone else getting rich off you. There are no shortcuts. NONE.
Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.
You have to sweat it out and do your homework to make above market returns.
P.S: This is not financial advice. I’m not a licensed financial adviser. If you want investment advice tailored to your specific situation, get a financial adviser or ask someone in the top 1%. While there may be some smart people here, your situation is different from other people. Don’t assume that what works for someone else will work for you.
If you’re a high net worth person, you will encounter a bunch of people who want to manage your money for a fee, but be careful and take your time. Talk to several firms. Don’t save money on a hiring a good lawyer, accountant and financial adviser. Get yourself properly setup and structured. You need to find an accountant who (A) knows this area well, and (B) whom you can trust. That combination is hard, and necessary. PWM groups are a good start for the right introductions. Specialty products (example:) might be appropriate in your situation – though I’m not an expert in any of these. But finding people who know the right structure for both tax and longer-term planning will be worth their fees to you right now, especially since, at your age, you have many years of compounding ahead of you. Not sure what your current situation is, but as F. Scott Fitzgerald said “The very rich are very different than you and me”.
But don’t trust anyone. Be nice to everyone. Be friends with a few. Trust one person: yourself. Listen to others but only trust your gut. Listen to that “gut feeling” and trust it. It is the light from within informing you. Your higher self guiding you. Trust yourself and your instincts, and make judgements on what your heart tells you. Your heart can pick up bad vibrations. If something deep inside of you says something is not right about a person or situation, trust it. When considering options, watch your heart rate. Believe what you see.
If you are considering investing in the market, any part of it, or if you are considering giving your hard-earned money over to someone else to manage, please, please read “The Number” first.
Success is entirely about making good decisions. Information may be power, but these days, everyone has access to the same information, so the playing field is level. It helps to surround yourself with the best people, but when you’re the boss, it’s your butt on the line. If you’re outside your circle of competence and still have to make a decision, ask experts HOW they would make the same decision not WHAT they would decide.
No one cares more about you than you do, but there are plenty of people who care about your money. Many of them want to turn it into their money and they are quite good at it. The less money you have, the more likely someone will come at you with some scheme. … Please ignore them. Always remember this: If a deal is a great deal, they aren’t going to share it with you. Be skeptical of anyone who does. If the person selling the deal was so smart, they would be rich beyond rich rather than trolling the streets looking to turn you into a sucker. Nothing in life is free. If you’re not paying for it; you’re the product. Others have good intentions but simply don’t understand how money works. One more thing I learned about people is that if they do it once, they will do it again.
Remember, one thing that NONE of the ultra wealthy does is DELEGATE investment decisions. They only invest in things they understand, after asking multiple questions and doing due diligence on their own pace. If you don’t take care of your money, no one will take care for you.
The only way to avoid being taken (one way or the other) is to know the basics of managing money yourself. You must know exactly where your money is going, before turning it over to someone. You can have the money but you may not have the education to manage wealth and maintain stabilities.
See, and for more information.
Hope it helps!