What Not to Invest In
Not everything that may hold or increase in value is actually an investment. Real investing is based on owning pieces of real businesses—corporations that produce goods and services people genuinely need or want. These companies create value, generate profits, and drive the economy forward. That’s what makes them truly productive.
Most of the ones listed below fails that test. These aren’t investments—they’re speculation.
Private Funds & Private Placements
These often get pitched as exclusive or sophisticated, but the reality is far less glamorous:
- Little to no transparency
- Illiquid
- Very limited regulation
- Complex structures you can’t easily evaluate
If you can’t clearly see and understand what you’re buying, you shouldn’t buy it.
Pre‑IPO Stock
Pre‑IPO shares sound exciting, but they are usually worth only one thing:
Whatever someone is willing to pay for them—which is often nothing.
They are:
- Illiquid
- Priced on hype, not fundamentals
- Nearly impossible to sell
Until a company actually goes public, those shares are just paper. My experience has seen dozens of companies give worthless Pre-IPO shares to employees as compensation and then they never go public.
Anything You Don’t Understand
If something feels confusing, overly complex, or intentionally vague, that’s not sophistication—it’s a warning sign.
A simple rule that protects people from disaster:
If you can’t explain it in plain English, don’t invest in it.
Art
Art can be beautiful and meaningful, but as an investment?
- Prices are subjective
- Markets are thin
- Liquidity is low
- Valuations are unpredictable
Buy art because you love it—not because you expect it to fund your retirement.
Collectibles
Coins, cards, watches, memorabilia—these can be fun hobbies, but they are not investments.
Their value depends on:
- Trends
- Fads
- Condition
- Rarity
- Finding the right buyer at the right time
That’s speculation, not wealth‑building.
Insurance Products
There are a lot of people selling "Guaranteed Performace" products.
- You pay extra to get below market performance
- The Guarantee is generally worthless. Assets help over time will perform well, you don't need to insure against that.
- It’s expensive to maintain
- It’s highly illiquid
- It concentrates your risk
- It doesn’t reliably outperform inflation
- Produce no income
- Don’t compound
- Can be volatile
- Often underperform stocks over long periods
Avoid these unless there is a very, very specific need to use them. Those needs are very rare.
A House (as an “investment”)
A home is a place to live, not a guaranteed financial win.
Yes, real estate can appreciate, but:
Your primary residence is a lifestyle choice—not a retirement strategy.
Gold, Silver, Platinum
Precious metals have a role as a hedge, but they are not productive assets.
They:
They might protect wealth; they don’t build it. Of the three, the only one that has fairly consistently held up to inflation has been gold.
Real investing means owning productive assets
Businesses that create value in the real world. If something doesn’t produce anything, doesn’t generate cash flow, or relies on hype, scarcity, or finding a “greater fool,” it’s not investing. It’s gambling.
My goal is to help you build real, lasting wealth by focusing on what works and avoiding the traps that don’t.
If you want help building a smart, sustainable investment plan, I’m here for you.