We are not going to advocate for single name stocks. Ever. Not, freaking, ever.

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Why? Because there are professionals out there who are paid millions of dollars (with massive teams and budgets) who devote their entire careers to trying to beat the market. And you know what? They aren't always right (no offense to any Portfolio Managers out there).

 

That's not to say these investment professionals aren't amazing at their jobs, insanely intelligent, or extremely hard working. It's just an unbelievably difficult task to try and beat the market. Unless of course you have private information that the public does not have, and in that case we highly suggest you get used to sitting in a jail cell.

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So, that being said, unless you devote your life to valuing and picking stocks, we suggest you stay away from trying to beat the market.

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*CONTRADICTORY CAVEAT*

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Okay. so we lied a bit. You can pick some single name stocks. But we caution you to pick companies that you believe have long term value in them so that you can hold onto them for a long time and watch your investment grow.

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So now you're probably thinking, "okay Polymath, what do you like?". Or probably more likely (and more bluntly) "can you actually give us some direction already". 

 

Great question.

 

We like index funds. Not all of them, but they are out there. A quick Google search will point you in the right direction.

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"But what should I look for?" 

• Index funds linked to the S&P 500 or other indices you like (real estate, industrials, etc.)

• Low expense ratios (why pay more when you can pay less)

• Notable name companies

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That's it. That's the tweet. Put a little money (or as much as you comfortably can) into it every month and watch it grow. Sure, some days/weeks/months/years might not be great. But the market has historically gone up and we like those odds.

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Footnote:

It probably feels like we didn't give you a whole lot of information to work with. That was done on purpose. Investing is extremely complicated and social media likes to pretend like it's not. Our goal is to simplify it in a way that makes sense for the average investor. If you feel you want to take a more sophisticated approach, we applaud you! We do suggest that, unless you have a strong financial background (education, work experience, or self-taught), you work with a professional to help you meet your goals. No, we do not have any suggestions for who to work with. But if you do meet with someone and want a second opinion, ask us here! Either book some time with a consultant or send us an email. We are happy to provide an unbiased, second look at your financial plan. 

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Real Estate

Okay, so we don't really give you much about the stock market. As mentioned before, that is strategically planned. However, we do feel we have some pretty good insight on real estate investing and would like to share our thoughts on that.

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When it comes to investing, there are many options out there., and real estate is one of the more popular choices (for good reason). For starters, investing in real estate can potentially lead to long-term appreciation, meaning that the value of your property could increase over time, especially if you buy in a high-growth area.

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But that's not all! Investing in real estate can also provide cash flow through rental income, which can help cover your monthly costs such as the mortgage, property taxes, homeowner's insurance, and mortgage insurance (aka, PMI). It may also help cover those larger expenses such as replacing a roof, fixing the furnace, or remodeling the kitchen or bathroom. If you are really good at picking rental properties, your rental income will exceed these expenses and put cash in your pocket on a recurring basis. And let's not forget diversification! Investing in real estate can help diversify your portfolio, which can help reduce risk and increase overall returns.

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But what does this mean, you ask? For starters, let's say the traditional investment class is buying stocks. With stocks, you are at the mercy of the ebbs and flows of the companies you are invested in and the overall market, which in most (if not all) cases, is completely out of your control. With real estate, your cash flow is almost entirely dependent on the tenants that live in your property. This means, under normal circumstances, that even downturns in the market won't completely wipe out your recurring cash flow - tenants still have to pay rent! Now maybe your property value isn't as high as it normally is, but rent is rent. Think of this way: you have to pay rent regardless of your situation, so why wouldn't your tenants? There are many nuances to this, and by no means are we guaranteeing your tenants will pay, but this diversification tactic will help bolster your portfolio to limit downside risk (in basic turns, the risk of your assets going to zero in an instant).

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And let's not forget the tax benefits! If you are looking for tax benefits (and you bet we are all), investing in real estate can help there too. There are several tax deductions that real estate investors can take advantage of, such as depreciation, mortgage interest, and property tax payments, all of which can help reduce your tax liability. 

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But to be quite honest, one of the best aspects of real estate is the level of control you have over your investment. You get to choose the property, the tenants that reside, and the rent they will pay. You also have full autonomy over home improvements and renovations (watch out HGTV!).

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Of course, investing in real estate comes with its own set of challenges and risks, such as property management and unexpected expenses, so please invest at your own risk! But with some research, a good understanding of the market, and maybe a little insight from a Polymath Finance consultant, you can make informed decisions that will help you build wealth over time.

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So, are you ready to give real estate investing a try!? If the answer is yes, then go for it! If it might be out of your comfort zone, then do not shed a second thought. We only want the best for our customers!

 

If you have any questions or doubts, please set up a consultation with our real estate guru, Zach Guy, for more insights!

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