
Ask HN: Which 5 investments of £1k each should I make? - ratsimihah
I have £5k to spare and want to make 5 separate investments, VC-like, such that even if 4 fail, one grows 10x over 5 years. What should those investments be?
======
pg_bot
If 4 fail and one grows by 10X you will have 10K. It seems that your goal
should be turning 5K into 10K over 5 years which seems doable. Since the
amount of money you're dealing with is fairly small, I would suggest putting
your energy into a single project instead of multiple ideas. Splitting your
focus seems like a mistake when dealing with so little capital. Start a side
hustle if you want or spend it on teaching yourself a skill that will
translate into a higher income. Investing in yourself is generally the best
thing you can do with that kind of money.

If you work 40 hours a week, 50 weeks of the year for five years that equals
10,000 hours. So if you can learn a skill that increases your hourly wage by
$1 you will have met your goal.

If you are looking to begin saving for retirement, put it in a Vanguard total
stock market etf and let it sit for 50 years.

~~~
ratsimihah
Hello! Thanks for the answer, I liked how you approached the problem. The
issue is that I cannot focus on a single project.

> If you work 40 hours a week, 50 weeks of the year for five years that equals
> 10,000 hours. So if you can learn a skill that increases your hourly wage by
> $1 you will have met your goal.

I have a steady 9-6 job as a React Native developer, where I keep learning and
growing and can apply my knowledge to front-end React as well

> or spend it on teaching yourself a skill that will translate into a higher
> income.

I've just invested in a yoga teacher training and started teaching yoga
classes, so some of my time goes there

> Start a side hustle if you want

I'm building [http://music.hatharaja.com](http://music.hatharaja.com) and
[http://spotifyxgenius.now.sh](http://spotifyxgenius.now.sh) in my spare time,
making yoga websites for my friends (for free), and building a model to
recognize yoga poses.

> Since the amount of money you're dealing with is fairly small, I would
> suggest putting your energy into a single project instead of multiple ideas.

I really want to start learning about 3d modelling and product design
(inspired by
[https://www.instagram.com/dobu.haishen/](https://www.instagram.com/dobu.haishen/)
[https://www.instagram.com/blankwilliamnyc/](https://www.instagram.com/blankwilliamnyc/))

I'm also learning machine learning.

The Snowball book about Warren Buffet also advises focussing on one thing,
which I wish I could do. Anyway, my point is that my time is already diversely
invested, which is why I am also looking at some more passive forms of
investment. People have been suggesting ETFs as "safe" long-term investments,
which I'm looking into. Maybe I can use 50% of my investment capital to build
some products after I've learnt 3d modelling and then invest the rest in ETFs.

------
cabraca
Do you have debt? Yes? Pay it off!

Do you have an emergency fund? No? make that your investment!

Do you have 3-6 times your monthly expenses set aside? No? make that your
investment!

Still money left? invest in MSCI World oder S&P 500 ETFs and let it sit for a
decade or two ... that should net you your 10x growth

Edit: removed the MSCI EM ETF recommendation ... S&P 500 performs better.

~~~
IshKebab
I have debt - a mortgage. But it's only 2%. Surely it makes more sense to
invest in the stock market (~7% over a long period) than pay that off.

~~~
tomohawk
Paying off all of your debts is life changing. Lose your job with a mortgage
or rent? How long is your emergency fund runway? Lose your job with a paid off
dwelling? Runway is a lot longer.

Want to take some time off and do something different? With a lot of debt
hanging over your head this may not be possible. Everything paid off? No big
deal.

You have to look at risk as well as rewards. You also have to look at
flexibility and opportunity.

------
e1g
VCs with infinite capital, networks, business knowledge, and 100% focus are
shooting for 1-in-10 investments to get a 10x return. It's rather optimistic
to expect a success rate twice as good as their teams get.

You're trying to get an annual return of 15%. Investments into US index funds
over the last 5 years returned ~10% p.a. with minimal risk of a major loss.

~~~
ratsimihah
Fair enough!

------
marcrosoft
Invest in 500 things by purchasing a low cost S&P 500 index like the ETF VTI
and call it a day. 5k is too low of an amount to purchase 5 separate
investments after you consider fees.

------
auslegung
If it were me I would take that money and invest in myself. 5k can go a long
way in self improvement and growth. If that’s not necessary or appealing, idk,
I dont have any experience or knowledge of investing other than the stock
market.

Another thought is to give it to a friend or acquaintance who would benefit
enormously from it, such as someone who’s not making much money but could use
a few thousand for self improvement that would double their income soon.

~~~
ratsimihah
That's a great advice! I just put £3500 into my yoga teacher training and
started teaching. That should be paid back fairly quickly :)

------
garmaine
Even factoring in HN's pessimism towards cryptocurrency, it's the only thing
available to a non-professional investor which meets your criteria (high risk,
but possibility of 10x growth over 5 years). Maybe consider putting 1k in
bitcoin, 1k in ethereum, 1k in a total-market equities index fund, and the
remaining 2k in a volatile stock picks of your choice (e.g. Tesla).

FWIW I think this is a recklessly dangerous thing to do and I feel dirty
giving this advice. But I feel someone should actually answer your question as
asked.

------
ctwilkie
Invest in yourself for a higher income (books, classes, laptop, etc)

~~~
ratsimihah
I've already invested in all of those. £3500 in yoga teacher training, and I
continuously learn and expand my knowledge. I do feel like I'm in a good place
to explore more diverse investment opportunities. Thank you!

------
pliny
Whatever answer you get, make sure you can use your losses to cover some of
your tax burden from your wins, otherwise even in the scenario you describe
you lose a third or half to the government (depending on how the income is
declared and what else you did in those 5 years) and barely come out ahead.

~~~
pjc50
Plenty of countries have tax-shielded vehicles for small investments like
this, which it would be handy to find out about. The UK "ISA", for example.

~~~
ratsimihah
Good points! I do have an ISA, maybe I should limit my investments inside it.
It doesn't support US shares though.

~~~
scriptstar
Hi check [https://freetrade.io/](https://freetrade.io/) and is available in
U.K and can invest in U.S stocks. Have a look. Cheers

------
sefrost
The Enterprise Investment Scheme in the UK _could_ be very beneficial to you
here.

Here's a description on Crowdcube: [https://www.crowdcube.com/pg/eis-tax-
relief-for-investors-44](https://www.crowdcube.com/pg/eis-tax-relief-for-
investors-44)

In short, you can reduce your personal tax bill for the year by 33% of the EIS
eligible investments you make.

------
zMiller
Considering the current political and economic climate : 1- Pay back as much
debt as you can: Signs point to the 'cheap money' party ending relatively soon
and debt will start becoming considerably more expensive to carry. 2- Bitcoin.
Yes, I said it. My 2 cents: Forgetting the debate on the currency aspect and
its usability as such . A politically neutral store of value has a use case
and there is a tremendous need for it going forward in this world. Bitcoin
checks all the marks needed and has been around for more than 10 years now
proving its use case. What you have to ask your self at this point is the
following : What happens if it all goes down the gutter? Well you loose 1k.
What happens if it actually works out? 10-100x? Who knows, but such asymmetric
value propositions present themselfs once or twice in a lifetime. Educate your
self and take action with the intention of being able to justify it to your
future self in 10 years. Ultimatey that is whom you will have to answer to :)

~~~
ovi256
>debt will start becoming considerably more expensive to carry Only if it's
not fixed interest. If you have low fixed interest debt, is there any reason
not to keep it ?

~~~
zMiller
If you manage to secure it for a sufficiently long term where you feel
comfortable you can meet it's obligations before the terms expire, then go for
it !

------
randomacct3847
I’m not going to give you financial advisor like advice, so be warned.

1k each in:

1\. Teladoc $TDOC (telemedicine) 2\. Canopy Growth $CGC (weed) 3\. Nvidia
$NVDA (gaming, crypto) 4\. Bitcoin $BTC 5\. Adyen (payments)

Macrodrivers: growth in telemedicine/direct to consumer healthcare, eventual
worldwide legalization of weed, gaming, mainstream crypto use, ecommerce
payments....

~~~
fucking_tragedy
Buying Bitcoin as an "investment" is like buying baseball cards or Beanie
Babies as an "investment".

~~~
21
10 years later, millions of percents higher, still waiting for the final
collapse to zero.

~~~
fucking_tragedy
The utility of a Bitcoin approaches zero for nearly all of its purported uses.
Unlike financial instruments, the underlying asset represented by Bitcoin has
no intrinsic value.

Bitcoins are more like tulips, baseball cards or Beanie Babies than actual
vehicles for investment.

------
zapperdapper
That sounds more like speculating than investing. I always view investing as
simply a hedge against inflation rather than a true money making venture.

If you are investing put it in a low-cost index tracker sheltered in a tax
efficient vehicle (in UK that would be ISA or private pension scheme). Let it
compound forever. That's probably what I would do.

If you've not heard of him, look up Harry Browne. He recommended splitting
your portfolio four ways: gold, cash, bonds, stocks. He reckoned that way
you'd do OK no matter what was going on in the world.

If you feel more like speculating perhaps learn poker and take a trip to
Vegas? ;)

~~~
ratsimihah
I've played poker overnight in Atlantic City and made about $100 with $100.
Not exactly profitable.

The cash, bonds, and stocks advice sounds similar to what Ben Graham
recommends in the Intelligent Investor. Thanks!

------
lucas_membrane
Reminds me of back when I was studying economics; I read an article by a
prominent economist, Samuelson I think, about how to get the benefits of
diversification when buying stocks. He said that you could reasonably expect
to get pretty near market returns by buying 5 stocks. Now, an investment guru
will probably get you into well more than 5 funds, each of which will hold
dozens or hundreds of stocks. The benefits of such attempts at diversity are
low, good chance if you diversify into 5 of any class of investment offered to
the public, you will get close to typical of that class.

Of course, investment != stock, but don't speculate on pork bellies if you do
not know to which end of a hog one talks.

------
osullivj
Put some in Premium Bonds [1]. No interest, but you get capital preservation
and a shot at the monthly GBP1M prize. Likely you'll pick up a few GBP25
prizes over a year, so it will be as good as a cash deposit, given the crappy
savings rates on offer from the major banks. I did this 10 years ago when I
temporarily had a lot of cash after a house sale.

[1] [https://www.nsandi.com/premium-bonds](https://www.nsandi.com/premium-
bonds)

------
Scotrix
Spend it for something nice which makes you happy and you’ll remember forever.

~~~
ratsimihah
I have all the material things I need, which is why I am looking into building
longer-term wealth.

------
cimmanom
What percentage of your liquid net worth does $5k represent? I’d suggest far
more traditional and less experimental investments for someone looking to
invest their first $5k than for someone with $5m already in stocks and bonds
looking to branch out with some “play” money.

------
nyrulez
Most answers you're getting here are on the responsible side i.e. Bogleheads-
like. Your question makes it feel like you're ready for some extra risk and I
am assuming these 5k aren't your entire savings.

\- Wefunder allows you to invest in companies with small amount. Find
something really promising there.

\- Spend time researching small-cap companies in the $1-$5 range and invest 1K
where metrics and fundamentals seem to line up for you. It can be almost like
angel-funding but a bit more proven.

\- Learn about derivatives and buy Options calls above the current stock price
for something you feel will go up significantly in the public markets. This
allows you to leverage huge gains from a small amount of capital. In the worst
case you end up with nothing. This is an interesting time due to the recent
bear market and there are many many stocks ready to go up given the right
macro triggers.

Note that selling Options is dangerous and don't do that unless you're an
expert - that can land you in big trouble. Leave that for
[https://www.reddit.com/r/wallstreetbets](https://www.reddit.com/r/wallstreetbets)
:)

\- Ride strong momentum and trends for smaller companies that have good
fundamentals - momentum can be a strong and proven factor for many investments
in the public market. I'd plug my own project [0] that's designed to detect
low-volatility trends and momentum across the entire market. It's soon going
to be in Alpha.

\- There are many leveraged ETFs in all directions of the market for different
segments - they give outsized returns for market moves of all different kinds.
You can speculate and get outsized gains (or losses). Again higher risk.

\- There is still plenty of money to be made in the ICO market even in this
environment by riding momentum, and it's perfect for smaller amounts due to
lower volume involved. Many tokens keep on returning outsized gains all the
time. If you have the inclination, you can look into that. Here are some
examples from my project:
[https://i.imgur.com/N4H3pka.png](https://i.imgur.com/N4H3pka.png)

\-
[https://www.reddit.com/r/weedstocks/](https://www.reddit.com/r/weedstocks/)

\- I can give you many more ideas but they start getting a bit too speculative
and into the realm of gambling.

\----

[0]: [https://stockquanta.com](https://stockquanta.com) and
[http://coinquanta.com](http://coinquanta.com) (For detecting crypto momentum)

~~~
zapperdapper
Boglehead here...;)

Good answer, and you made me think of something with a bit more risk. There
are these micro-loan companies now where you can lend out cash and get at
least a higher rate of interest than most savings accounts.

~~~
nyrulez
Yes that's a good point. Getting 5-10x gains there are hard to come by though
:)

You can sell options - they are like selling insurance for market crashes.
That gives infinite return in practice since you get money for free.

The downside is you can lose your shirt if the market goes south and are
liable for the insurance policy you provided.

~~~
zapperdapper
Yep, with the peer-peer lending, ratesetter.com specifically, you can get 6.1%
for their five year plan right now.

5-10x gains are always hard to find unless you invest for the long term.

------
mooreds
If you really want to spread your risk, choose 5 different ETFs that are not
correlated. But I don't think any investment available at the 1k level will
net 10x.

~~~
ratsimihah
I'm not particularly expecting 10x. I'll look into those, thanks!

~~~
mooreds
This might help: [https://www.portfoliovisualizer.com/asset-class-
correlations](https://www.portfoliovisualizer.com/asset-class-correlations)

I honestly don't know enough about finance to go from correlations between two
asset classes to the correct correlation between five, but maybe google will
help.

------
arithma
If I am in a similar situation, but in a third-world country, with a few $K to
spare, does anyone have any advice on how to put some money for the future?

------
EliRivers
_such that even if 4 fail, one grows 10x over 5 years_

This seems really hard. Sounds like you're asking for some kind of coupling; a
set of five stocks such that if any four of them go to zero, one of them will
definitely multiply by ten. If anyone here could do that reliably, they
wouldn't be here.

Whatever you end up investing in, don't forget to do it inside a taxfree ISA.

------
Markoff
what would you recommend with 30-40K EUR in EU and low risk? no
mortgage/debts.small apartment in some country?

------
momentmaker
Invest in ChainLink :)

[https://chain.link](https://chain.link)

~~~
Temasik
Vaporware scam

Follow satoshi nakamoto

------
lesss365
If you're considering following the suggestions of investing in the stock
market, hold off until a possible Brexit market reaction passes in March.

Also, wait to see if the S&P can get up and hold steady above $2750. If it
can't hold above that mark for a month or so, expect significant drop.

Read up on simple moving averages (sma), relative strength index (rsi), and
stochastic rsi indicators. Then read up on golden and death crosses. Follow
the readings up with monitoring daily, weekly, and monthly charts.

[https://www.investopedia.com/terms/s/sma.asp](https://www.investopedia.com/terms/s/sma.asp)

[https://www.investopedia.com/terms/r/rsi.asp](https://www.investopedia.com/terms/r/rsi.asp)

[https://www.investopedia.com/terms/s/stochrsi.asp](https://www.investopedia.com/terms/s/stochrsi.asp)

[https://www.investopedia.com/terms/g/goldencross.asp](https://www.investopedia.com/terms/g/goldencross.asp)

[https://www.investopedia.com/terms/d/deathcross.asp](https://www.investopedia.com/terms/d/deathcross.asp)

Nadaq's site offers a solid chart and indicators at no cost, as does Yahoo and
Stock Charts.

[https://www.nasdaq.com/symbol/spx/interactive-
chart](https://www.nasdaq.com/symbol/spx/interactive-chart)

[https://stockcharts.com/h-sc/ui?s=$SPX](https://stockcharts.com/h-sc/ui?s=$SPX)

[https://finance.yahoo.com/quote/%5ESPX/chart?p=%5ESPX#eyJpbn...](https://finance.yahoo.com/quote/%5ESPX/chart?p=%5ESPX#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)

~~~
cimmanom
Thank you for this, especially the Golden Cross / Death Cross links. I learned
something today.

~~~
brokensegue
You didn't. Technical indicators like that are nonsense

~~~
lesss365
Rather than be dismissive, present your case. Moving averages and rsi are not
the same as drawing arbitrary triangles. They actually measure trends in
buying, selling, and price movements over a given period. And if you actually
look at the 20,50,200 day moving averages for major indexes, you'll see
significant moves in price where golden and death crosses occurred. They're
legitimate indicators and used by professional traders within the finance
industry

------
bitxbitxbitcoin
With your risk tolerance as described I feel like I need to be the
(ir)responsible one and suggest at least 1k into Bitcoin.

~~~
Lizzo
Username checks out.

Personally I think Bitcoin is going to go huge soon, perhaps not as big as it
originally was, but it's definitely going to go up a bit - bear in mind I'm no
crypto expert, merely a CS student.

~~~
djaychela
Any more info on your thinking? Not looking for a fight, just wondering what
makes you say this against a backdrop of near universal negativity. (I say
this as someone who has 10 BTC and has pretty much give up on it (I bought it
in 2013, IIRC, so I'm still up)).

~~~
Lizzo
Nope, no info! Just a total guess... Feel free to downvote me, I just have a
feeling it's gonna surge, but who knows?

