People like to talk about cryptocurrencies, particularly Bitcoin, as an investment. I don't think it is one - to me it's pure speculation. If you want more details about why this is the case check out Nassim Nicholas Taleb's white paper on it.

But if your friend/colleague starts talking about it and they are not particularly statistically savvy, and you can't sneak off before being involved in the conversation, there's a stock standard response I have when they ask why I'm not into it.

"Can you pull out your Blackberry to show me the price of it?"
They will typically laugh and say who has a Blackberry, or just look at you funny as they have never heard of it. You then say that Blackberry's were the first "smartphone" and all the rage but where are they now? They got annihilated by better technology and no longer exist. There's a good chance the same thing will happen to Bitcoin and all the other coins available now.

But what if crypto does take off? Won't I miss out on the boom and be poor?

No

Because I own the shovels (graphics card manufacturers) that the (crypto) miners are using to search for their gold. NVIDIA is the leading manufacturer of the graphics cards which are essential for the mining, creation and utility of cryptocurrency. Long story short - without these graphics cards crypto does not exist. NVIDIA is one of the largest companies in the USA, and hence is in VGAD/VGS which I own.

In addition to that I own the warehouses where some of these mining centres are run (via DJRE), the electricity providers that generate and sell the huge amounts of energy currently use (via IJH), the semiconductor companies that provide chips for the hardware being used and on and on and on......

So if Bitcoin goes to $0 in value these companies will take a hit, but they will just switch production to something else or be replaced in my indexes by something new. Either way I will barely notice as they are but a few of the thousands of companies and properties I own. The people who are in the Bitcoin musical chairs game when the music stops are the ones who will pay the price for it.   

Don't be the 3 billionth person jumping on the get rich quick bandwagon when these speculative booms happen. Own the companies that sell the shovels to them, along with everything else.  

Personally I think a good financial planner is worth their weight in gold, which don't kid yourself, you'll be paying them in fees. The tricky part though is finding one. Australia has had a massive upheaval in our financial planning industry over the past few years specifically because of this, with sharks and charlatans all over the place in the industry. Here's two examples that I've seen first hand:

1. I was out on the waves with my mate when somehow it came up that he had a self managed super fund. Not to be a douchebag (don't google that Claudia) but I knew enough about his situation to know that he shouldn't have one. So I asked him some questions about it and got very concerned. He'd had a doorknocker at his house asking if he wanted to invest and make lots of money, so of course he said yes. The company then paid for him to come down to Brisbane, showed him their fancy offices, fake teeth, surgically enhanced receptionist and expensive suits and conned him into signing his superannuation over to them. They then proceeded to gouge the hell out of him with fees, and invest his small super amount into unfinished, crappy apartments in Brisbane that they could gouge further fees from. Instead of benefitting from a great bull market in shares like he should have they bled him dry. He told me he was able to get out of it, but got slugged with massive fees to do that, but I'm still not sure just how badly he was impacted or whether he managed to get any money back at all. This is not a high income earner nor a young man, and there's a good chance those scumbags have ruined his retirement years. To cap it all off when I was googling the owners of the company they are a family of shi+heads who are in the news for fighting with their neighbours because of their partying and breaching building rules. Great people....  

2. My neighbour went to a "financial information session" for older women at a local pub - if the alarm bells are not going off in your head now than you need to be very careful as you are going to be easy pickings - and met a "lovely, well-spoken single mum of young kids" who was just trying to help people as a financial planner. Again - this doesn't take a rocket scientist to figure out that this could be dangerous for her. So I asked if I could see what the planner had done, and my neighbour showed me. It was ridiculous and a direct breach of fiduciary duty (i.e. putting the clients interest first). There were small things which made no sense, and then a lot of garbage which were blatant lies and misinformation. I then met the financial planner with my neighbour and told her as such. The thing that really made me shake my head was that my neighbour ran into the women at a fancy and very expensive restaurant in a different state to where they both live - how random was that! - where the financial planner was holidaying with her friends. No kids though and the planner acted weird when my neighbour asked about them. I'd love to know if they actually exist.....I thought about reporting her to the regulatory body but my neighbour didn't want the commotion. To me preying on the elderly like that is true scumminess.

The other issue is that a good financial planner can turn bad without you knowing. As a current example there is Dixon Advisory in Australia, which for years was one of our most trusted financial planning companies for retirees. Daryl Dixon was considered one of the most knowledgeable superannuation experts in Australia and a regular financial columnist in our major newspapers. People trusted him. In 2022 they have gone bankrupt due to the looming class actions for fee gouging, breach of care and providing conflicted advice. This means that the retirees who have invested their money with them may lose everything.....

This is not to say that you shouldn't get a financial planner, but you need to educate yourself regardless of whether you get one or not. This is not the sort of thing you can be hands off with as you need to know what's happening. Never sign your money or investments over to anyone else. Anyone that tells you they can pick individual shares that will do better than the average of the market (i.e. index funds) are full of shi+. Be wary of anyone who wants you to setup difficult to understand structures for your money or investments, they'll likely be taking an upfront fee to set it up and then ongoing fees each year to run it for you. That's quite the incentive for them to talk you into it! 

A good financial planner will make sure that you are doing things tax efficiently, simply and most important of all will make sure you don't f$%^ it all up buy doing stupid things like selling because you're scared the market is going to fall further or "investing" in speculative garbage. They will have a boring plan that gets results which match the boring old market average. Your investments will go down very quickly and very far some times and it will hurt. The hard part is that someone like this won't seem exciting to you because you'll be comparing them to the one who is full of shi+ and telling you that they can do much better than the average and that they will protect you during downturns. You're smarter than average aren't you so why should you accept the average? This person is a charlatan to be avoided at all costs.            

In an earlier post I mentioned that I split my money evenly between 4 different ETFs: IJH, VGAD, DJRE and VAS. Whenever there is a reason for me to worry about them all I need to do is have a look at what they (and therefore I) own. These examples are just a few of the TENS OF THOUSANDS of businesses and properties that I own through just these investments. Pretty cool stuff I think! 

IJH contains 400 of what we call "mid-caps". This consists of companies that are valued between 1.6 and 18.6 BILLION dollars as of 2022. This puts them between the massive companies that are in the "large-cap" space like Amazon, and the smaller companies that make up the "small-cap" space. I know this sound ridiculous, but I love IJH as much as a person can possibly love an exchange traded fund. It's just so damn cool to own some of the companies in it. For me its a sweet spot of some very cool businesses that are doing very interesting things. We are talking about 400 of the best companies in America that you've probably never heard of - check these random ones out:

Cognex - A company that specialises in machine vision technology and hardware to overcome assembly line errors and optimise efficiency. Their stuff looks awesome. 
Builders FirstSource - A company that specialises in house framing wood, with the cool thing being that they cut to order and package before sending out. This means that there is much less wood waste on the building site as they can optimise the cuts to get the most planks of wood out of a single tree. It is estimated that this has saved nearly 500,000 trees from being cut down in just the last 3 years.   
Graco - They say it best: "We pump peanut butter into your jar and the oil in your car. We glue the soles of your shoes, the glass in your windows and pump the ink onto your bills." I love owning companies like this, you don't know much about them but you can't live without them. 
Wolfspeed - The world leader in Silicon Carbide technology for things like electronic vehicles and radar, I have no idea how it works but who wouldn't think that's awesome?

Are these INDIVIDUAL companies great investments? I have no idea, nor do I care, nor do I believe that anyone else knows any better given the efficiency in markets. That's why I own 400 of them. Some will do really well and leave the mid-caps to become large-caps, whereas others will perform poorly and drop down into the small-caps space. When this happens new ones will enter, as there are always 400 companies in IJH. 

For us Aussies: IJH invests in USA companies, but is "wrapped" as a what we call an Australian domiciled exchange traded fund (ETF). Importantly this is not hedged to Australian currency. This means that it will go up or down in price based on both the change in value of the underlying companies on the USA stock exchange AND changes in the Australian dollar. This latter point is important to consider in your overall planning, as this can have a big impact on your outcomes. Over a long period of time (20+years) this is likely negligible, as currency changes tend to "washout" and stay within boundaries. For example, the Aussie dollar versus the USA dollar has rarely gone outside of a range between 50c and $1. However, over short timeframes this can have a large impact - which I'll explain in the VGAD section below. 

VGAD and it's sibling VGS consist of around 1500 of the largest companies from around the world, excluding Australian ones. This makes them one of the most well diversified ETF's you can own, with a huge number of household names. This includes all the ones that come to mind when you think of big companies, such as Amazon, Alphabet (owner of Google and Youtube), Facebook, McDonalds and Tesla. Yep - it's very USA biased with around 2/3rds of the portfolio being USA companies and the remaining 1/3rd being companies like Toyota and Sony (Japan) from other countries. Some of these companies you may not have heard of, but are still huge and cool. Check these ones out:

ASML - a mammoth company (>30,000 employees) that specialises in photolithography, which is essential for the production of semiconductors. Yes, those semiconductors which are worth a fortune and as rare as hens teeth in 2021/2022.  

Shopify - the largest platform for e-commerce, if you're buying or selling something on line there's a good chance they are making money from it!

There are heaps of other great companies in this ETF - by definition they have to be great companies or they wouldn't be amongst the largest in the world!

Note on currency exposure/hedging: The Australian currency is often considered a "risk-on" asset as we are tied to commodities (think iron ore exports). So when global recessions hit our dollar often (but not always) goes down relative to the USA dollar. Put simply, if your ETF is currency hedged then you can get the double impact of the Australian dollar going down (reducing the worth of your shares) AND the value of the companies going down (also reducing the worth of your shares!). To put this in perspective during the "Coronacrash" in 2020 the hedged (ie. in Australian dollars) version of the global ex-Australia index (VGAD) dropped around 30% as both the value of the companies AND the Australian dollar went down. By contrast the unhedged (i.e. not in Australian dollars) version of this index (VGS) only dropped around 20% as the drop in value of the companies was offset a bit by the increase in the US dollar versus the Australian dollar. 

I own VGAD because I have a lot of other unhedged currency exposure via DJRE and IJH, so want to counter this in the event that the USA market goes down and our currency goes up. This has happened many times in the past, and I prefer caution where possible.   
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The ETF's DJRE (unhedged) and REIT (hedged) provide exposure to real estate investment trusts (REITs - not to be confused with the ETF named REIT...). These are a quirky asset class in that they in many ways are similar to if you bought an investment property yourself. They often use a lot of leverage, and are mandated to pay back to you a large proportion of the income they receive after expenses. This means that they often pay a relatively high dividend yield, so expect a regular, quarterly paycheck from them. That can be good (money in my pocket!) and bad (I have to pay tax on it :(....). REITs are included in other ETFS like VGS/VGAD, IJH and VAS as they are a part of these indexes, however I choose to "overweight" them as I like the potential diversification they provide. 
 
Equity Apartments - Next time someone excitedly tells you about their investment property in Logan that they are renting out for $350 a week you can click on this link to show them the 35 apartment towers that you own a part of in New York. You might recognise some of the names of the places they are in - Manhattan, Park Avenue, The Upper West Side, Wall Street. You can also casually state that some of the 2 bedroom ones you rent out for 10's of thousands of dollars per week, and that they might recognise some of them from shows like Succession or Billions. Or you can just sit there and drink your Vodka (Marcia), Bundy Rum straight no chaser (Claudia) or cistern moonshine (Lily - sorry Lily...) and nod your head as if you care. Or if yuppie apartments in New York are not your thing....how about a boutique, all wood small group of apartments in Saint-Mande Paris that you own as part of Gecina Sa, the France based REIT? 
Aedifica - This one is cool. It specialises in environmentally sustainable residential care homes for elderly and disabled people. Check out "Villa Casimir" in the Netherlands at this link, if that doesn't make you feel good about what you own (how awesome does that place look!) and what they are doing with it there's something wrong with you. Imagine visiting your vulnerable loved ones in a place like that, that has to make you feel at least a little better and lift your spirits.
Prologis - One of my favourites, they build warehouses and distribution centres for companies like Amazon. They are the biggest REIT in the world, and their portfolio is very impressive. Fancy an automobile parts manufacturing warehouse in Slovakia? I do! 

I own both DJRE and REIT, the former has slightly higher fees but the latter is hedged. Picking which one you want comes down to do you want it to be currency "controlled" (hedged - REIT) or do you want it to fluctuate with changing currency exposure (unhedged - DJRE). Personally I only buy DJRE now, it's quite a large ETF with a lot of money in it so I have no concerns that it will stop existing one day. Either one is a great investment though.   

VAS stands for Vanguard Australian Shares, which you guessed it, owns only Australian companies. This means all the ones you know of like BHP, Rio Tinto, Commonwealth Bank, Woolworths, Wesfarmers (owner of Bunnings and Kmart) and CSL. Australian shares have a number of interesting aspects to them, including:
1. In local currency terms they were the 2nd best performing country in the 121 years since 1900, behind only South Africa. BUT - in USA currency terms Australia was number 1!
2. Australian shares have the unique advantage of often providing "franking credits". Long story short this means that when you get a dividend from Australian shares you get the money in your bank AND a tax credit. This means that any tax the company paid you get a credit for. This can be very beneficial as if you take time off work / getting an income you can get reimbursed for any tax the business paid at tax time. This is not trivial, and many retirees rely on it. This is a key reason that Labor lost the 2019 federal election. When they announced that policy I thought it was a killer for them, and it turns out they realised the same thing (just too late!).

Given these advantages why shouldn't you just buy all Australian shares? Because that is putting all your eggs in one basket, which we don't do. Doing well for the last 121 years does not mean Australia will do well in the future, and even if it does there will likely be decades where it performs poorly while other countries do well. That is why I buy parts of everything from everywhere. I think it is not a bad idea at all to have a fair chunk of Australian companies, we have low corruption, good governance and "punch above our weight" with industry. But I wouldn't put all my eggs in that basket.