The two main resources that we can invest as individuals are time and money. For the sake of argument let’s pretend that the money part matters, because by far the most important resource to invest carefully is obviously time, something which cannot be renewed and luck has no bearing on.
My argument is that people should bias towards investing their money in boring things and their time in interesting things. The concept that people spend most of their life working for the money in a job that displeases them, while investing their money in interesting areas, is flawed.
People should instead invest their money in boring ways (bonds, savings accounts, maybe stocks if the market was priced reasonably) and their time in interesting ways (starting companies, where savings allow). The assumption here is that you have a surplus of any least one of time and money. If not, focusing on survival makes the most sense.
The opposite approach, to invest your money in interesting ways (Southern Ontario housing, Bitcoin, picking tech stocks) is actually a horrible approach to investing. Anything interesting (like being a career graphic designer) has already been priced in to the value of the asset. So by definition, interesting things are overpriced relative to boring things. Further, money does not get bored, so putting it into something as boring as a fixed-term bond or (conservative) commercial real estate really doesn’t result in any downside or restlessness (for the money, not necessarily for you).
Meanwhile, investing your time in boring things (like a job that spits off cash for you to put into Bitcoin) is unlikely to result in a satisfying life or the most money over the long term (because happiness makes it easier to be productive, all else being equal). Our tendency to get bored and be restless are harmful when it comes to making investment decisions because we love interesting things and despise boredom. Money never gets bored, so it probably makes the most sense to save it aggressively if we are making boring time investments (e.g. a job) and invest in boring things so that eventually we can make interesting investments with our time.
The bias then is the fact that interest in an investment (usually) implicates the wrong parts of our brain unless it is approached in a fundamental way. And even then, unless something has existed for a long time the likelihood that it will continue existing is low. So picking something boring and fundamental with typical returns, and avoiding restlessness, might be ideal.
The point here is that you have to look at what investments other people find interesting in order to figure out if something is priced fairly. Bitcoin is a good example because everyone talks about it, making it neither boring nor priced fairly. Your primal brain says this makes it a good investment, but the reality is that this means it’s already overpriced. So look for things other people ignore, or even better, outwardly resent.
One example of something people seem to resent at this point is retail inventory. Investors consider it a plague and punish retail stocks because “retail is dead” and they “have too much inventory”. Those might be good reasons not to buy their stocks but it also presents an opportunity to buy the inventory itself for below what you would otherwise have to pay. The inventory is certainly worth much more to the consumer than it is to the retailer in this environment, so it is likely underpriced.
Another example on the time side of things is the oft-cited opportunity in trades jobs. Not all trades are created equal, and some definitely pay a lot simply because they are horrible to do (similar to law). But there are trades that tap into our creative abilities, aren’t especially unsafe and pay extremely well. The downside is a social capital penalty, which is basically the same as saying it’s an undervalued asset that people will overlook or outwardly scorn in favor of something overvalued like a degree.
Much has been written about how to invest money. Much less has been written about how to (properly, meaningfully) invest your time, so that you have more of it to spend on the things you care about in the future. Retirement is wasted on the old, as interesting investments make us further away from being able to do interesting things with our time, which is (should be?) the goal.
Do boring things with your money, and interesting things with your time.