As a 28 y/o graduate student, given the negative real return in savings accounts, what areas would you suggest investing in?

Nick ‏@NotthatkindofDr: As a 28 y/o graduate student, given the neg real return in savings accounts, what areas would u suggest investing in?

Answer: only invest in yourself. there is nothing else that will get u more than 5% per year.

When I first made some money I would wake up in the middle of the night scared. What if Y2K caused the world to end? I had lunch one day with the head of IT at a big Fortune 500 company. He said all his computers were going to shut down on January 1, 2000. , What would happen to my money. I would take long walks at four in the morning calculating out how I can save my money in Y2K. I would compound things 20 years ahead to make sure I could pay for my then (one) kid, my family, myself. Would I be able to retire? I would stand in the shower and wonder: what if I gave my parents half my money? Would they be able to survive?

I had $15 million in cash at the time. About year or so later I had $0.

(this is how poor I felt when I had $15 million. I was mentally ill).

All of that time in the shower, compounding interest, worrying about Y2K or war or inflation led to… $0. At $15 million I honestly thought I was poor. That somehow inflation would outpace me. That people would be making salaries of $10 million a year. Or that every entrepreneur would be richer than me. That I wouldn’t be able to afford the lifestyle I wanted. That my kids’ kids would go broke. That I hadn’t prepared adequately for various scenarios that would bring down the financial system. So I thrashed and invested and re-invested and doubled-down and spent, all in a desperate quest to turn my mortality into immortality. There were moments when I thought I was immortal, that money had somehow acquired for that elusive elixir of youth and vitality. I was 32 years old. Just a baby. Just a little older than you are now.

Then I had nothing. I missed the one thing that was most important. I forgot to invest in myself. This means lots of things.

– invest in your health. This has nothing to do with money. Are you eating ok? Are you sleeping well? Are you flossing? Dental infections can go from the mouth to the heart to the brain. There’s some evidence that lack of flossing is directly correlated to early onset of Alzheimer’s. Are you exercising? Are you breathing ok?

– invest in your friends. When I had money, I dropped my friends. I took on new friends. Everyone spoke about money all the time. Alex would point out a billionaire at a Las Vegas craps table who was surrounded by prostitutes and say, “that guy is a stud”. People who didn’t make it in that world were “losers” or “fuck ups”. Nobody read. Nobody talked about anything but money. Everything had a price tag. Everyone would put you down because of secret jealousy. And, of course, nobody kept in touch with me after I lose all my money.

– invest in your ideas. Are you still coming up with ideas like you once did? I used to come up with ideas for my business every day. New clients, new business directions, new ideas for the clients, new ideas for employees, new ideas for how we could get investors or acquirors. New ideas how to do things cheaply. Once I sold the business I stopped having ideas. My idea muscle atrophied. I was an immature little kid with a room filled with toys. All I wanted to do was play. It wasn’t until after I lost everything and lived through a year of excruciating depression that I pulled out a waiter’s pad and started coming up with ideas again. And then it was another several years before I finally climbed out of a total financial nightmare.

– invest in your spirit. Two ways: Are you grateful for what you have. Don’t always think about investing in the future. Be grateful for everything you have right now. Every day list the things you are grateful for. The second way: surrender. You can’t control everything. I should say, “I can’t control everything”. I can’t control what will happen with the world, with the economy, with the factors of luck that helped me make the money. Surrender to whatever mystery is inside of yourself that helped you get to this point. You can say, “there is no mystery”. But there is. It doesn’t matter if you are a scientist, a religious person, a spiritual person, or an entrepreneur, there’s mystery in everything you touch. What happened before the Big Bang? What exists in the space between a proton and an electron inside the atom? What combination of molecules inside of us created the consciousness that allowed you to make money. Bow down to the mystery and trust it.

When you do the above four things your body, mind, emotions, spirit, will tap into the pulses and vibrations of everything around you. Your mind will be an idea machine. Your spirit will be free from the worries of the future and anxieties of the past. Your emotions won’t be sidetracked by the negative people who try to bring you down. And your body will have the energy to pursue any idea to its fullest. You’ll also know the most important thing: when nothing is the right thing to do. Sometimes the best investment is waiting. Is decreasing. Is slowing down. Is observing.

When I was just starting my first business I met with Jason Calacanis. He was starting his first business, the Silicon Alley Reporter. I loved his magazine. It reported on all the web agencies in the so-called “Silicon Alley”. In other words, all my friends that worked in a 10 block radius of where I worked. I was an advertiser in the magazine. At the time, Joanne Wilson (Fred Wilson’s wife) was the head of advertising for his magazine.

Jason and I met for coffee. He was reeling off fact after fact about every Internet business out there. There barely was an Internet industry and he knew the entire universe of it. I said to him, “why are you doing this magazine? You should be working for a top venture capitalist. You can help invest in all of these companies.”

He said, “I only want to invest in myself. That’s where the best returns will be.” Silicon Alley Reporter didn’t quite work out. But his next business, weblogs, inc. he sold to AOL for about $20 million and his latest business, Maholo, raised money at a $100 million valuation. It’s hard to get returns like that investing in anything other than yourself.

And it’s not just money. When I was burnt out and really needed a break from everything I thought I was “supposed” to be doing I decided to start writing this blog. There was zero investment in dollars. If anything, it kept me from foolishly investing in a volatile stock market. It slowed me down. It forced me to think. To write. To relate to people. To communicate with people. To make new friends. To open up new possibilities for myself.

I’ve made many investments that have made me a lot of money. Writing on this blog has made me zero money.

It’s the best investment I’ve ever made.