Exploration of the drawbacks of certain side hustles like drop shipping and selling on Amazon, suggestions for alternative business approaches. Discussion on the challenges of short-term trading and the benefits of robotic trading, skepticism towards real estate as an internet investing scheme. The difficulties of managing rental properties and the suggestion to invest in a real estate investment trust (REAT) for convenience and liquidity.
Drop shipping and selling on Amazon come with significant challenges and low barriers to entry, making it difficult to make a profit and relying on someone else's business.
Day trading is a risky endeavor dominated by sophisticated robots, requiring significant time and financial commitments and emphasizing risk management rather than quick profits.
Deep dives
The Pitfalls of Drop Shipping and Selling on Amazon
Drop shipping and selling on Amazon are often promoted as side hustles, but they come with significant challenges. The low barriers to entry lead to intense competition, driving prices down and making it difficult to make any profit. The top products on Amazon have already secured their positions and investing in reviews and SEO is necessary to compete. Moreover, relying on a platform like Amazon means relying on someone else's business, with the risk of being turned off or overshadowed by the platform itself. Instead, it is advisable to create a product that you genuinely care about and start small. Selling it through social media and finding your customers directly allows you to test the market and retain full ownership of your business.
The Risks and Drawbacks of Day Trading
Day trading may appear exciting, but it's a risky endeavor. Many advertisements make it seem like a video game where individual decisions lead to profits, but the reality is that most of the trading volume is carried out by sophisticated robots. Successful traders emphasize managing risk rather than making money quickly. Short-term trading is subject to noise and requires systematic thinking, which robots can excel at. Day trading involves significant time and financial commitments, often leading to wasted effort and lost money. Therefore, it is not advised for most individuals.
Navigating the Complexities of Real Estate
While real estate is often championed as a great investment, there are considerable challenges and drawbacks to consider. Managing rental properties involves manual headaches, such as dealing with tenants' payment issues and property maintenance. Real estate requires substantial initial investment and offers relatively slim margins. Additionally, it can be a time-consuming endeavor, far from the passive income it is often portrayed as. Alternatives such as investing in real estate investment trusts (REITs) provide more liquidity and convenience. It is also advisable to invest in opportunities that align with your interests and understanding rather than blindly following the trend of real estate investing.
The internet favors really easy, bad advice that’s dressed up as a “life hack”. In this video, I explore the 3 worst categories of side hustles, so you save your time and money for an opportunity that actually makes sense for you.