Let’s start this conversation with as of October 17, 2019 that US and Canadian central bank interest rates are below 2%. 

This is known as the risk free rate.

Premiums are built on top of this.

Liquidity, credit risk, volatility in revenue, tenure, experience, time, country, industry and other types of risk will cause the required compensated return to go up.

I start the conversation with the rule of thumb that over the last 100 years stocks have historically returned around a 6% return before fees.

Presumably things with less risk will have a lower return and things with a higher risk will have a higher return.

You can take a lower risk asset, add leverage and get a higher return in some cases but now you’ve added risk.

Let’s never forget that your ability to save money is the single greatest contributor to your ability to grow your wealth.

My job comes in the form of optimizing and helping you use that money to make more money.

In this podcast I look at stocks, bonds, cash, real estate, alternate investing such as hedge funds, private lending, participating whole life policies, your own company and yourself.

The point is that you should look at each of your options and make a non-emotional decision.

If you run a company you are a special case and I get into that in this podcast.

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