 Over the last few years, we've seen Tesla go up 1000%, GameStop go up 10,000%, and Dogecoin create billionaires. Wow. So in today's video, I'm gonna be making an allegedly indisputable tier list of the best and the worst financial investments. And in this piece of financial advice that is not financial advice, I'm gonna be ranking the best and the worst investments from S tier, which is the best, to F tier, which is the worst. So let's get started. So the way I'm thinking about this is what are the best investments for the average person? So imagine we took a thousand people and we trained them for a month on how to do these different types of investment styles. And then we came back 10 years later and we saw one, how many people were successful and actually made money. And two, out of the ones who were successful, how much money did they make? And then three, out of the ones that weren't successful, how much money did they lose? So keep that in mind as we go through this video. First one we're gonna be talking about is day trading stocks. Now YouTube is littered full of friendly day traders sitting in front of their computer smiling that are really eager for some reason to teach you their ways. Or are they? So day trading is basically where you start the day off with a cash account. You trade during the day, you're going in and out of positions. And then at the end of the day, when the market closes, you take all of your stocks out and you go back to cash. Now these trades could last anywhere between like a second or a few moments all the way up to a few hours. Now the thing about day trading is it's essentially a zero sum game. And that means for one person to win, another person has to lose. So there's not really any value being created here. If you think of it like a slice of pie, in order to get more of the pie, you have to take somebody else's slice. Whereas other things like starting a business and creating value actually grows the pie itself. So because of this fact, day trading is incredibly competitive. And there's this old saying, give me the incentive and I can predict the outcome. And so if you are a day trader who's going up against a bunch of other really good day traders, it's incredibly hard for you to make money. So what would you want to do in this situation? You would probably want to bring in a bunch of brand new people who don't know what they're doing because they would put money into the equation and then you would just take their money, right? It's like taking somebody else's slice of pie. Now with that being said, I do want to say here, I don't think all day traders on YouTube are scams or anything like that. I know there's some channels out there that think everything's a scam. I do think there are some people out there who are truly really good at day trading and they can consistently make money. But with that being said, it is a very, very low percentage of people. Statistically speaking, somewhere between 95 and 99% of people who day trade lose money. It's not that they break even. It's not that they come in a little bit under the S&P 500 when it comes to their returns. They literally lose money. Okay, so for that reason, this one is going into D tier. Next one on the list is going to be swing trading. And this is where you get gains from short to medium term plays. So you might buy a stock and then you sell it four days later, for instance. Now the definition of the timeframe is going to be different depending on the source that you look at, but it's definitely going to be less than a month. And typically it's one to four days for a trade. So they're looking for stocks that have a high level of short term momentum behind them and they're likely going to go up and then they're going to buy into them, wait a few days and then sell them. Now, both swing traders and day traders use a lot of what's known as technical analysis, which is basically where you try to predict what something is going to do based on its past behavior. Overall, I have seen people be successful with swing trading, again, very rare and it's really hard to do well. I don't know the exact percentages on this one, but I would estimate that probably over 80 to 90% of people would end up losing money. But I also think that it's more flexible and better than day trading. And I also have dabbled a little bit in swing trading myself and I've had some success with it. And I do think swing trading is better than day trading overall. But with that being said, it's still not the best investment, it's still speculation, it's still trading. And so therefore I'm going to go ahead and put it into C tier. Next one on the list is going to be long term stock picking. Now, stock picking is basically where you invest into like one stock that you think is really good. You're just super excited about this one stock. So think all the people who put all of their money into like GameStop or Tesla, for instance, and long-term investing in general is when you buy the stock and keep it for at least one year. But a lot of the time people buy stocks and keep them for 10 years, 20 years, sometimes even their entire lifetime. Now it's really risky to put all of your money into one stock. That's pretty much like putting all of your eggs into one basket. And if something happens to that basket, you're out of all of your money. So overall, again, I have seen people who are really good at stock picking, long-term stock picking also offers a lot of tax advantages. So I'm gonna give this one a B tier rating. Next one on the list is going to be long-term investing and specifically long-term investing using tried and true methods that have mathematically been proven to be the best way for you to invest. Things like holding your stocks for at least a year, diversification, dollar cost averaging, and always doing your due diligence on any investment that you make. So I have seen many, many different people be successful with a long-term investing strategy as long as they stick to these guidelines. This one is gonna go into S tier. Now a really easy way to do all of these things without having to do any work or without having to research so much and still get really good returns is going to be index fund investing. So basically what you would do here, this is probably the easiest way to do it, is you would automatically set it up to where you spend a certain amount of money every single month on some index funds. And what the index funds do is they are going to automatically diversify your investment for you. So for instance, Warren Buffett recommends the S&P 500 index funds, that's the 500 biggest companies here in the US. And you can just automate this so you'd have the dollar cost averaging down. The index fund being diversified means that you don't have to do any research on companies. So this is literally so easy a caveman could do it and you're gonna beat at least 85% of hedge fund managers. Yes, it is statistically proven that index funds beat 85% of hedge fund managers when it comes to their investments. And also index fund investing is passively managed. So the fees tend to be extremely low, sometimes even 0%. So this investing method is super good. It's really solid, especially if you have like a very long time horizon for when you want to retire. It's also really boring. Whenever I talk about it on this channel, it seems like it gets zero views. So, you know, people think index fund investing is boring, but it's really, really good. And that's why I'm gonna go ahead and put it into S tier. All right, next one on the list is going to be crypto short-term investing. So this is something like trying to day trade cryptocurrency, but I'm actually just gonna lump this together with swing trading as well. Now this is something that I have done before and I've had a good amount of success with it. And I've also done this before and lost money as well. But I have seen people be consistently successful doing cryptocurrency day trading and swing trading. So in my opinion, the stock market is pretty much figured out at this point. They have some of the smartest people in the world working in the stock market. They've got the best technology in the world. They have the best resources in the world. It's really difficult for somebody in their mom's basement that's got a couple computer screens to beat the stock market when it comes to day trading. Cryptocurrency is a whole different beast though, because it's so new. Now cryptocurrency still requires a high level of skill, a high level of knowledge and experience. I've also seen people have success with yield farming, which is kind of another form of short-term trading. They basically find farms that are profitable that need them to provide liquidity. They do it for a very short period of time and then they basically try to time their exit. So I actually have seen a good amount of short-term opportunity in cryptocurrency, but this does require a high amount of skill. And if you taught this to a thousand people, I think many of them would end up losing money. But with that being said, if you're somebody who's really competitive and you're obsessive and you really wanna get into something that is kind of more short-term, I would say this is probably one of the better options. So I'm gonna go ahead and put crypto short-term into B tier. Next one on the list is going to be cryptocurrency invested long-term. Now, I used to be a cryptocurrency hater. I remember back in 2012, I was living in a scholarship hall with like 50 dudes. And I remember there were some people that were across the hallway from us and they were mining Bitcoin. And I thought it was like the dumbest thing ever. I thought they were just totally wasting their money, wasting their time because they were buying it and mining it. Then the price of Bitcoin spiked and it went up like 100X. I think it went from $1 to $100 or something along those lines. And of course, I thought, dang it, I'm stupid. I missed out on it and I didn't buy in then either. Well, now it's gone all the way up to like 60-something thousand and I think it crashed back down to 30,000. But I think you get the point. It's still gone up a lot. So being a more cautious investor, you know, I'm a big fan of index funds, for instance, I was a cryptocurrency hater for the longest time. But the numbers don't lie, cryptocurrency was without a doubt the best investment over the last 10 years. And it's honestly not even close. And after educating myself, I am a believer in cryptocurrency technology. I don't think you should have your entire portfolio in it. I think you should have a diversified portfolio where you have other assets as well. So things like stocks or real estate is something else that should be in your portfolio long-term. And you also need to be really careful here because cryptocurrency is largely unregulated. There's a lot of really scammy stuff going on, like rug pulls, you can get your wallet hacked. So it's very important for you to know what you're getting yourself into and be very careful. But I have personally seen friends of mine who invested in cryptocurrency who can now retire, right? So these are people who are just normal everyday Joes. They invest in cryptocurrency and now they can retire. They don't have to work anymore. And these are just the people that I met before becoming a YouTuber. Now that I'm a YouTuber, I've done some networking. I've met tons of people who have made money from cryptocurrency to the point where they can borderline retire. So crypto investing long-term, again, using the same fundamentals that work in stocks. And that is diversifying your investments, dollar cost averaging, making sure you do your own due diligence and do your own research and long-term investing. Crypto long-term, definitely S tier. All right, so next one on the list is going to be options trading. Now, this is a really interesting one. So in my opinion, options trading is really misunderstood. In my video, the ultimate guide to the stock market, I probably spent a good five to 10 minutes talking about exactly what options trading is. And I'll just put the definition on the screen for you. If you want to pause and look at the definition, you can. But with that being said, options trading basically just gives you more options when it comes to what you can do when you're buying or selling a stock. And you have the right, but not the obligation to exercise that option. Now, one reason that options trading gets a really bad reputation is because if you look at Wall Street bets, for instance, most of the people who lost a ridiculous amount of money did it because of options trading. So some of the option plays I've seen on Wall Street bets are so stupid that you would probably be more likely to make money by taking all of your money out of your bank account, pouring gasoline all over it and then setting it on fire. That's essentially what they're doing with some of these option plays that I've seen. It's unbelievably stupid. However, if you use options the right way, you can actually reduce your risk, not increase your risk, but reduce it. Now, getting really good at options trading is pretty complicated. It's probably a lot more complicated than day trading, for instance. And that's why I don't think it's nearly as popular. But with that being said, I have met people who are consistently making money options trading. However, using my scenario, if you put a thousand people through this, I think many of them would end up losing money and they would probably end up losing a lot of money. However, I do think there would be a small amount of people who would end up making a ton of money as well. So I'm really torn on this one, like the typical option trading on Robinhood, for instance. You're almost guaranteed you're gonna lose money unless you really know what you're doing. But if you're a really good option trader, I think there's a good chance that you can make money. So I'm gonna go ahead and put this one into C tier. Next on the list is going to be Forex. And this is basically where you are trading different countries' currencies. So this one's pretty similar to day trading. Again, I'm sure there are people out there that are really good at reading the market and understanding the geopolitical environment and how that's gonna affect Forex and affect different currencies and different countries. And I'm sure there are people that are able to do that consistently. But again, with 1,000 people, the vast majority of them would not end up making money. So I'm gonna go ahead and put this one into D tier. Next on the list is Penny stocks. And I'm just gonna come right out with it and say this is probably the worst one on the entire list. Penny stocks are what the Wolf of Wall Street used to scam people. Yeah, they're penny stocks. Companies that can't get listed on NASDAQ, they don't have enough capital, their shares trade here. Penny stocks. They are highly volatile, highly speculative and incredibly easily manipulated. Because of the fact that the market caps for penny stocks are so low, a single negative or positive story coming out from an outlet might actually affect the stock price significantly. We're talking it might double or triple the stock price or it might completely crash it. And so penny stocks are just crammed full of rug pulls and scams. And almost no one has consistent success buying and selling penny stocks except people who make courses on how to buy and sell penny stocks. This one goes in F tier. Horrible, do not do it. Next on the list is going to be real estate. And this is one of the absolute best ways for you to build your wealth. I think if you taught 1,000 people how to do real estate, something like 80 to 90% of them would end up making money. Now, a lot of the time there is a learning curve. So a lot of people will end up making a big mistake and losing a lot of money, at least temporarily on their first house. And this is great for people who want to just do it as a side hustle. It's also great if you want to get into the real estate industry and do it as a full-time job. Okay, so I don't want to like oversell this. I'm trying to give you guys the most fair assessment of all these. I don't want to make it sound too rosy. Something like two thirds of millennials actually regret buying a house. But in this particular case, I'm talking about real estate investment. I'm not talking about buying a house just because it's the American dream or something like that. This is real estate investment where you're trying to make a profit from your property. So I would say this one is a little bit riskier than index fund investing, but there's also a little bit more upside. It's also not nearly as passive as index fund investing. So there is gonna be some actual work that goes into this. And it also requires a lot more skill than index fund investing as well. Now I personally have not gotten into real estate investing because it does not fit my personal plan and the goals that I have as well as the lifestyle that I want to live right now. But later on in my life, I will definitely get into real estate investing. So a lot of this really just comes down to your personal preference, the situation you're in and what your goals are. But with that being said, real estate investing is absolutely without a doubt, S tier. Next one on the list is going to be crypto meme coin investing. Now there are stories out there of people making a ridiculous amount of money from Dogecoin or Shiba Inu. And it's true, there were people who became millionaires from Dogecoin as well as Shiba. There's even one person who became a billionaire apparently. But the problem with meme coin investing, and this is what happens every time I've seen this cycle happen over and over again, is the best time to invest in it is when nobody's talking about it. And when nobody's talking about it, you're not very likely to even know that it exists. And by the time that you know that it exists, that's probably because a lot of people have invested in it. The market cap has gone up, the price has gone up, news outlets are covering it, YouTube channels are talking about it, et cetera, et cetera. And that's not the time you want to invest in it. That's probably one of the worst times. They say that when you hear your taxi cab driver talking about an investment, that's when you know you need to exit. So I have personally seen like, this has happened over and over again. People get into Dogecoin or Shiba Inu at the wrong time and they end up losing like 90% of their money. And these meme coins do not have any inherent value. What do they do to society? How are they adding value to society? They aren't. And so meme coin investing is gonna go into F tier. All right, so precious metals investing is going to be next on the list. And specifically the one you hear about the most is investing in gold. Now, certain people have been saying that we should invest in gold for like the last 30 years. And yes, in the 70s, when the US experienced a high inflation environment, investing in gold actually was the best move. But since then, it's actually been one of the worst performing assets. It actually performed worse than your average bond. And just because gold performed well last time when inflation hit doesn't necessarily mean it's going to be the same thing this time. Those two things could have been correlation and not causation. So I am not a big fan of gold. I mean, if you want to keep it as a small percentage of your portfolio and actually probably just buy the gold, like don't just have somebody else buy it for you, actually have it with you. I guess that can be kind of a hedge against a, you know, it hits the fan kind of scenario. But honestly, in a scenario like that, I would say there's going to be a lot of other things that are a lot more valuable like food, supplies, et cetera. But I just, I don't see any reason to buy gold. I'm not a big fan of it. And so for that reason, I'm going to go ahead, I feel bad for putting it in D tier because I wouldn't say it's like a scam necessarily. It's just, it just hasn't performed well and I don't really see it performing that well. I guess I'll go ahead and put this one into C tier just to be nice. Next one on the list is going to be bonds. So I'll put the definition on the screen. You can pause if you don't know what bonds are, but basically this is a device that kind of gets you maybe like a three or 4% return, but it's pretty much guaranteed. So if you're somebody who's really close to retirement, for instance, what financial advisors generally will say is you want to have more and more of your portfolio in bonds. And the reason for this is because you don't want your retirement to get delayed in the case of a market crash. You kind of want to lock your earnings in by investing in bonds. But other than that bonds, especially in this environment, don't even keep up with inflation. So I can see certain scenarios where investing in bonds is a good idea, like if you're really close to retirement, for instance, I totally get it, but for the average investor, for someone who's really young, not really a need to invest in bonds, in my opinion, I'm going to go ahead and put this one into C tier. Next one on the list is going to be actively managed mutual funds. Now this is very similar to an index fund. In fact, an index fund is a type of mutual fund, but in this particular case, I'm referring to the actively managed variety. So this is an actively managed type of investment. So it means that the fees are going to be a little bit higher. Now the investment is going to be diversified. Usually this is a long-term investing instrument. And like I said before, index funds are going to be hedge fund managers like 85% of the time, but you do have examples of mutual funds that have outperformed index funds for a very long period of time. So it really depends on the mutual fund that you invest in, but I still think this is a very good investment. I'm going to go ahead and put it into A tier. Next on the list is going to be retirement plans and tax advantaged accounts. So this is going to be things like the 401K, Roth IRA, HSA, et cetera. Now these are all amazing investments because they have massive tax benefits and they were designed to help lower and middle-class people retire. So these are going to be limited in terms of how much you can invest, but just very generally speaking, if your job offers you a 401K and they offer like 5% matching on that 401K, you should absolutely contribute up to the 5%. That's essentially free money. And then you should also max out your Roth IRA every year. And inside of both of these, you can invest in index funds, for instance, just to keep it simple. So I've already made several videos on what these are, so I'm not going to go over that. If you want to, you can definitely look those up. But yeah, this one is absolutely without a doubt S tier. Next one on the list is going to be insurance and specifically whole life insurance. And the reason I put this on the list is because a lot of insurance salesmen will position this as an investment and you would almost always be better off just putting your money into an index fund. You'd get much better returns if you did that. Now, Two Sense did a really good video explaining the nuances of this. And insurance can be extremely important for a lot of people. And there are certain situations where whole life insurance might be the best move for you. There are many other situations where if you do need insurance, term insurance is probably going to be better. And insurance really shouldn't be viewed as an investment in my opinion. I think it should be looked at as a hedge against risk. So for that reason, I'm going to go ahead and put insurance as a whole into C tier. Next one on the list is going to be investing in a business. Now, over the last few years, we've actually had record numbers of people who started their own businesses. And with a lot of the other investments on this list, you might be able to make like 8% a year or maybe 10% a year, maybe up to 20% per year. But starting a business can make you 100% return on your investment. 200%, 300%, 400%, 1,000%. Now, of course, this is not passive like an index fund, for instance. It requires a lot of skill, requires a lot of work and a lot of activity. And you're also taking on a lot more risk and it's much more difficult to succeed. And my philosophy when it comes to starting a business is never spend any more than $100 when you start out. There are so many different businesses out there that you can start and dip your toe into with less than $100. For instance, you can start making YouTube videos just by whipping your smartphone out. So most of the time you aren't really risking all that much money. What you're really risking is your time and your effort. So this choice is not for everyone. Totally understand people who want to just stay in the comfort of a nine to five job. There's nothing wrong with that. I totally get that. But for the right person, this one can absolutely be S tier. And the next one sounds a little bit cheesy but it's basically investing in yourself. So regardless of whether you're gonna start a business or not, it's worth it for you to invest in your skills. Now, this could involve investing in education or learning new skills. But it's also things like investing in your own health and investing in your happiness. And as cheesy as it sounds, this is super important. Just be careful and don't get scammed. This one is gonna go into S plus tier. Check out my stock broker tier list right here if you want to start investing and you want to see what in my opinion are the best stock brokerages. And if you haven't done already, go ahead, gently tap that like button, hit the subscribe button, ring the notification bell and comment down below any thoughts, comments, criticisms, et cetera. G have on the video and I will see you next time.