 What's happening guys, it's Shane here. So everybody on YouTube seems to have their own opinion about what you should do with your hard-earned money. Some say you should invest in wedge deals like real estate. Others think you should invest in dividends that pay you passive income every single month. And others think you should put your life savings into cryptocurrency. Be connected. In today's video, I am going to break down and rank what I think are the best investments based on science and shit. Yes, science. Okay, so first one on the list is going to be stock picking. And what do I mean by stock picking? What I mean is when you pick an individual stock, you think, you know what? I think Amazon is gonna go up or I think Facebook stock is gonna go up. And then you put most or if not all of your money in that stock or maybe a few other stocks. Investing in individual stocks is not a good idea for about 99% of people. And when I say 99%, I literally mean 99%. Studies have been done comparing people who invest in stocks versus the average return of the market as a whole. And they show that people who invest in individual stocks lose to the average market as a whole 99% of the time. Now to be fair, this still is a pretty good idea. I mean, they probably still made a good profit on it. It just wasn't as good as the average return from the market as a whole. So index funds basically track like a bunch of different companies or the average of the whole market. And that's why they generally get an average return that's about the same as whatever the entire market grows by. And it was shown that index funds beat stock pickers 99% of the time. But like I said, it's still a good investment. Investing in stocks in any form is still gonna be better than just keeping your money in a bank account. So for that reason, I'm gonna go ahead and put it in B tier. Okay, next one on the list is going to be penny stocks. And these were made famous or mainstream by the movie The Wolf of Wall Street when Jordan Belfort basically tried to sell penny stocks to the top 1% of Americans and he was wildly successful. Once we've suckered them in, we unload the dog shit, the pink sheets, the penny stocks where we make the money. And I think most people know that penny stocks are not a good investment at all. In fact, the average penny stock returns about 20 to 40% per year. The only problem is, is it's negative 20 to 40%. And by that I mean, if you were to put $10,000 into a penny stock, you would likely only get $6 to $8,000 of your money back. So for that reason, penny stocks are clearly an F tier investment. Don't do penny stocks. Next one on the list is going to be day trading. And this is just hugely popular here on YouTube. And it just blows my mind. I think I probably see like 50 different thumbnails of some guy smiling sitting in front of a computer with red and green graphs behind him telling you that he'll show you how to day trade. Now studies have shown that at the very least, 80 to 90% of day traders lose money. Some go all the way up to 95% of them lose money. We're not talking about not making any money. We're talking about losing money. And only about 1% of day traders are profitable. Those are really, really bad odds for an investment. But let's just say you're one of those geniuses, one of the 1% that is profitable with day trading. Well, when you make a profit on a stock you have to pay what's known as short-term capital gains taxes, which are a lot more expensive than long-term capital gains taxes. So basically you have to hold a stock for at least one year in order to pay long-term capital gains on it any less than a year and in short-term and then you have to pay way more in taxes. And on top of that, a lot of the companies have trading fees and other just random miscellaneous fees. They just have a lot of different excuses for taking your money. Day trading is ridiculously hard to be good at. And despite the 17,000 different channels that say, you know, it's super easy. All you have to do is just do exactly what I do. Almost nobody is predictably successful with day trading. This one goes in F tier for sure. It's a little bit better than penny stocks, but it still deserves F tier. I'll be nice and say F plus tier. Next one on the list is going to be dividend stocks. So dividend stocks are basically just like a normal stock except they pay you out sometimes monthly, sometimes every three months, sometimes yearly, they actually pay out dividends to you. Now, usually this isn't a lot. If you have like, I don't know $100,000 of a stock, you might get like $500 in dividends, but that's still pretty nice. Now, there is some evidence out there that companies that offer dividends tend to be better companies than the ones that don't offer dividends. And they tend to be better than the average of all the companies that are on the market. There's also some evidence that there's certain companies that are known as dividend aristocrat companies, which are better than normal dividend companies. And apparently there are ways that you can tell which companies are the better dividend companies. I don't know if I actually buy that. Now, while it does seem like if you were to pick dividend stocks, that would probably be a better idea than normal stock picking. It still doesn't beat a simple S&P 500 index fund. And it also takes tons of time, research, expertise, and effort in order to get good at doing the research on dividend stocks so that you can pick the really good ones. And so for that reason, I think they're a little bit better than normal stock picking. I'm gonna go ahead and put dividend stocks into A tier. They're kind of low A tier though, to be honest. The next one on the list is going to be robo investing. And this is where a robot invests for you automatically based off of science and algorithms and all kinds of crazy stuff like that. It automatically diversifies your portfolio for you. As you get older, you're technically supposed to start investing in bonds as you get closer and closer to retirement. So that way, if the market goes down, bonds are super rock solid. It doesn't matter if the market goes down or up, you're always gonna get whatever the return they promised was. So apparently robo investors actually do this for you. And that way you don't have to hire a financial advisor. You don't have to pay the fees that you'd have to pay if you went with a hedge fund manager. And it really does sound pretty cool in theory, but it hasn't been around for very long. And I'm just not sold on it because it doesn't have a positive track record. I think when it comes to where you put your money, trust is a huge factor. And how can you trust something that hasn't been around for very long? I don't trust it. And so for that reason, I'm gonna go ahead and put robo investing into C tier. Ask me five years from now. Maybe it'll be B tier, A tier, maybe even S tier. But right now I'm gonna go ahead and put it into C tier. Next one on the list is what I'm gonna go ahead and call dumb real estate. You know, we've all heard that line 63% of millennials regret buying a home. And a lot of people regret investing in real estate because they just think it's so easy. I mean, there's tons of channels out there on YouTube telling you that real estate is the best investment you can make. And it makes the most millionaires, almost all millionaires get their wealth through real estate investing. So who do you believe? Do you believe the statistics where most millennials regret investing in real estate or do you believe these YouTube channels? Well, an unbiased opinion coming from me, I come from a family with a lot of real estate agents and people who invested heavily into real estate. So I think I know a little bit more than average person on this. And real estate is just incredibly easy to mess up. That's the bottom line. Most people will mess up on their first property purchase in one way or another. Whether it's not doing enough research on your first tenant and then they end up trashing the place and costing you tens of thousands of dollars. Maybe you didn't do a good enough home inspection. Maybe you got with a real estate agent who didn't tell you a good price on it. There's just so many different ways that you can mess this up. It's so easy to mess up and it's so difficult to do it the right way. And the thing is, once you've gotten into a real estate investment, it's not easy to back out of. It's not liquid like stocks where you could buy a stock, you change your mind the next day, you sell it. Maybe you lost a little bit on it, but you got your money back for the most part. And then on top of that, real estate is a ton of work. People don't realize how much work goes into owning a house. The list just goes on and on. You have to paint the house. If your tenant trashes it, you have to fix it. If the toilet breaks in the middle of the night, you gotta fix that ASAP. You gotta call somebody to fix it or fix it yourself. Getting good at evaluating properties takes hundreds, if not thousands of hours of practice. It's tons of work. So for that reason, dumb real estate is gonna get D tier status right in D tier. Although I'll say it's high D tier. Now, on the other hand, you have smart real estate. If you know what you're doing, real estate might be the best investment that you can make. For me personally, I put it in my top two investments. Luckily there's a ton of gurus online selling $997 courses, teaching you how you can invest in real estate yourself. The only problem is a lot of the advice on these courses is actually horrible. A lot of the gurus online have their own investment companies where they'll take your money and invest in real estate for you. And that's just another middleman who's gonna be taking their cut. The truth is almost everybody is gonna mess up their first investment in real estate. It's almost like a rite of passage. There's a steep learning curve. It's very time intensive. It takes a lot of time to get good at evaluating properties and seeing if you're actually getting a good deal. And in my opinion, I don't think you should ever invest in a community that you're not familiar with. You should always invest in a place that you either live or you've spent a lot of time in. Because the value of a house can literally change from block to block. Like this block, houses are worth $100,000 more than this block. And so if you don't know what you're doing, you don't know the area like the back of your hand, you're probably not gonna get a good deal. But overall, real estate is an incredible investment because you can get really good returns. You have the ability to leverage your money so you can put like 5% or maybe 10 or 20% down on a house. And then you can get a $500,000 house and be able to leverage that entire investment even though you only put maybe $100,000 down. And then of course there's the amazing tax benefits that you get from investing in real estate. For those reasons, real estate is gonna go in S tier but only if you know what you're doing. Next one on the list is going to be cryptocurrency and I'm sure everybody has heard of either Bitcoin or maybe you've heard of BitConnect. And BitConnect even had a bunch of YouTubers promoting it. And then there were even people running ads on YouTube and Facebook trying to get you to join into it. And it turned out that it was a pyramid scheme. Thousands of people got scammed and lost all their money and it was just an absolute disaster. So clearly there's a lot of scams and worthless coins out there. And I think for the most part it's kind of common sense. And I think that you can't really even count cryptocurrency as an investment. I don't really see it as an investment. I see it as a really smart gamble. And I personally know people that have made a ton of money from cryptocurrency. I'm positive, I made a little bit of money from it but I basically just look at it as fun gambling. It's not really a real investment. Don't put any more than you're willing to lose into any type of cryptocurrency. Crypto is gonna go in D tier. The next one on the list is my personal favorite and it's also Warren Buffett's personal favorite. And that is index funds, specifically low to no cost index funds. And these in my opinion are the best investment that you could possibly make because they require no expertise, no skill. Only takes 15 minutes to set it up. And then maybe another five minutes or 10 minutes to automate it, to where it automatically puts money into the index fund every single month from your bank account and then you never have to look at it again. You're done. It's so ridiculously easy and the average return that you get will be 99% of stock pickers, you know, normal people and it'll even be 95% of hedge fund managers. And keep in mind, these hedge fund managers are some of the smartest people in the world for one. A lot of them graduated, you know, summa cum laude from like Stanford or Harvard. These guys work like 12 hours a day. They just work their butts off. They have amazing amount of connections. They know a ton of different people. They have access to the best technology. They have people that are called quants that are the ones who figure out algorithms for what stocks they should invest in. They have access to huge consulting firms like McKenzie. And then let's be real here, even though it's illegal, a lot of them engage in insider trading. They have insider information. They know secrets that other people don't know and they make investments based off of those secrets. Now, investing with these hedge fund managers, they'll usually take a cut of the profit and then on top of that, 95% of them can't beat an index fund. Whereas with index funds, there's almost no cost at all. A lot of them are like 0.003% fee for managing it for a year. So it's basically like no fee at all. Whereas hedge fund managers, a lot of the time they'll charge a 1% fee, 2% fee, sometimes up to 3% fee for managing your investment. So if you invest in index funds, you waste almost zero time. You don't have to have any expertise. It automatically diversifies all of your money across the entire market and you're gonna beat 95% of the smartest investors in the entire world with no fees involved. You just can't beat index funds. Whatever way you slice it, they are an incredible investment. They're my personal favorite investment because I don't personally want to spend all the time it takes in order to take care of real estate and so index funds are my number one. Index funds blow any other stock investing strategy out of the water and it's not even close. The only problem is you can't really make an entire YouTube channel or an entire blog or anything like that about index funds because you could only make like five videos and then you'd run out of videos. There's just not that much content. They're that ridiculously simple and so therefore you don't really hear much about them because there's not much to talk about. You put some money in the index fund. It diversifies it across the entire market. You're gonna get an 8% return on average adjusted for inflation year after year and you can automate everything very easily, done. I mean, think about it. You can't sell a $997 course on index funds. Nobody would buy it. That's why you don't hear about them very often. Index funds are S tier for sure and if there was an S plus tier, I think index funds are number one but you can definitely make an argument that real estate is a little bit better than index funds but I really just think it comes down to personal preference. Next on the list is going to be actively managed funds such as mutual funds. And remember when I said that index funds beat 95% of hedge fund managers? Well, this is the funds that the hedge fund managers manage. They don't do as well as index funds 95% of the time and there's a lot more fees involved. Some of them even have hidden fees that you don't even know about. You find out about them later on and they're a big scandal. And if you ever talk to a financial advisor, they'll tell you to go with a mutual fund because they make more money that way and they'll even show you graphs that show oh, look at this mutual fund that beat the S&P 500 over the last 30 years but here's the thing. They probably had like 500 different mutual funds and then they cherry pick only the ones that beat the S&P 500 and they don't talk about the ones that lost to it horribly. But still 5% of them do beat the S&P 500 index fund and so for that reason I'm gonna have to put it in A tier status. The next one on the list is going to be get rich quick schemes from fake gurus and you see these all over YouTube. Gurus telling you to invest in yourself, give them $997 and they'll teach you how to become rich. Look at this girl who got on Amazon FBA and within her first month she was selling $500,000 or some BS like that. It's just, oh God, it makes me roll my eyes and into the back of my head. It's ridiculous, it's corny but a lot of people including myself have fallen for some of these charlatan scams. Pro tip, anybody telling you that you can get rich quick is probably a scammer and you shouldn't trust them. Anyways, I'm gonna have to go ahead and put the $997 get rich quick scheme into D tier. Next on the list is going to be starting your own business and speaking of becoming an entrepreneur starting your own business is a great way to get into this and I think learning how to run a business is one of the most challenging yet also one of the most rewarding things that you can ever do. When you start to make money for yourself and you're out on your own making money without somebody paying you a paycheck it's one of the best feelings in the world and it honestly changes something in your mind when you experience it but here's the thing entrepreneurship is not for everybody very risky compared to just getting a normal job and in fact I'd say most people would probably be better off just going to college getting a good degree and then getting a normal job with that being said this one is definitely gonna go into S tier. Next on the list is going to be getting a useless degree and I talk about this a lot on my channel but in the last decade or so the cost of college has just gone up so freaking much it's just ridiculous. The average student is almost $40,000 and dead at this point and it's just getting worse and worse. 10 years from now it's probably gonna be that the average student is gonna be $100,000 in debt. So you can check out my other videos if you don't know what the worthless degrees are but it's almost impossible to get a normal job if you invest in a worthless degree and I get it maybe it's your passion maybe history for example is your passion. I personally love history I didn't go to get a degree for it because I knew it wasn't gonna lead to me getting a job and right now in my life I have tons of time to go and watch history documentaries and listen to history podcasts and read history books as much as I want and ironically if I got a history degree I probably wouldn't have as much time to do that because I'd have to be working two jobs just to make ends meet. This is one of the biggest traps of our time. History is gonna look back at this point and they're gonna say I cannot believe people were going to college and getting these worthless degrees getting $40,000, $50,000 in debt to get a degree that leads absolutely nowhere and I've gotten a ton of hate comments for this lots and lots of hate and I'm not gonna stop talking about it. I'm not gonna stop warning people about this because people really need to know that if you're gonna go to college to get a degree the only thing that really matters is what that degree does for you. What doors does that open for you? Is it gonna lead to you getting a job in that field or is it gonna lead to you not having any job prospects and having to get a job as a Starbucks barista or a waiter at a restaurant? Worthless degrees are F tier for sure. Now, on the other hand, getting a good college degree is still a really, really good investment and this is despite what all the fake gurus on YouTube are saying there's all kinds of like money channels to talk about money and they say, oh, don't go to college, it's a total scam and they're right if you get a worthless degree. You know, take me for instance, I came from a very poor background. I was homeless at 14. I didn't have anybody to fall back on. I don't expect to inherit any money and so I had to make a big decision when I was 17, 18 years old and I did a ton of research and I found a degree that I was passionate about. I had some passion for it, not as much as history but I had some passion for it and it made really good money and good jobs, stability, all that sort of thing. I did all that research and then I found the one that really stood out to me and getting a good college degree was an incredibly good decision for me because I didn't have anybody to fall back on. It was a low risk, high reward move and if you talk about percentages, you know, like opening a business for instance, you probably have about a 10% success rate of having a really good business where you can make six figures. You may be 10% that's probably being really, really nice but if you go to college and you choose the right degree and then you just work really hard while you're in college, you have like an 80% chance of getting a very, very good job that will probably lead to you making six figures. If you talk about percentage wise, a college degree is one of the best investments and it's one of the most safe investments that you can make and over 80% of millionaires have a college degree. These are just facts. Still, with this being said, getting a college degree isn't the slam dunk that it used to be and you know, you still have to pay a lot for college a lot more than our parents or grandparents had to pay and there's also a lot of scams out there. There's also, you know, there's a lot of for-profit colleges, online colleges that aren't accredited. So you do have to be smart about it and you have to do your research when you're looking about which degree you're gonna get, which college you're gonna go to but if you choose the right degree which will lead to you getting a really good job, this is one of the best investments you can make. It is S tier status for sure. Check out these videos right here. I made them just for you and then go ahead, smash the like button, hit the subscribe button, ring the little notification bell and then comment down below any ideas or thoughts that you have on the video. Hope you have a good one and bye for now.