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What is the most secure and profitable investment in the world?

On the phone one afternoon a client said, “All I want is a 7% return on my money with no risk of losing any.”

I replied, “Well if you find it let me know. I could sell a boat load of it since bank insured CD’s are returning less than 1%.”

“Well, I thought that’s your business to find that kind of investment.”

“Ah, like coming up with something magical?”

See this is the holy grail of investing. Some black box investment with above average returns yet no downside risk.

Frankly, that’s what Bernie Madoff offered his clients. And he delivered it right up until he went belly up and took all their money.

Even the example given in the question of Bank of Brazil savings accounts returning 8%. They might right up until Brazil decides they can’t repay their debts and the banks collapse.

Stop and read this slowly. This investment does not exist. It never has if you figure in real returns after inflation.

So what do you do?

Learn all you can about realistic returns and volatility of different kinds of investments.

Figure out what return you really need to accomplish your financial goals and what level of volatility you can live with.

Save and invest regularly. That way the ups and downs work in your favor because you buy more shares when the markets are down.

Do this over enough years so compounding kicks in.

And have confidence to stay the course in challenging markets.

Frankly, I’ve made my best investments in the midst of recessions. When everyone else was cashing out and running for their bomb shelter I was buying cheap.

But that takes calm confidence born of knowledge, experience and realistic expectations.

If you do all that you increase your odds that one day you’ll discover, as I did, that you became financially independent.

Oh and if you find that holy grail investment let me know. I’d like to order a boat load.

You can make many investments secure and profitable with enough time and knowledge.

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