Advantages of Investing in Gold Compared to Private Equity
There are a great many investment options available if you are looking for someplace to put your money. One option that appeals to a lot of people is investing in private equity. This appeals to people because they hope to get in on the ground floor of the next big thing and strike it rich. The reality is that is unlikely to happen. For people who know what they are doing and have considerable assets private equity investing may be a good option, for most investors however it is inappropriate. Rather than trying to strike it rich with a risky investment it would make far more sense to invest in something stable like gold and grow your money slowly over time.
Private equity is basically investing in an company that isn't publicly traded. That means things like venture capital, angel investors and the like. The obvious problem for most investors is that they have no idea how to find these investments. Unlike stocks which are easily bought and sold and on which there is plenty of information available, information on private equity investments is not easily available. Even if you knew where to find private equity investments there is still the issue of determining what makes a good investment.
There are funds available that trade in private equity investments and this is how most people invest in private equity. The problem is that these funds are normally only available to wealthy investors who can put up large sums of money, the minimum investment is usually quite large. These funds also normally have restrictions on your ability to sell meaning they are not particularly liquid. The money you invest will likely be tied up for several years and it will take a long time before you see any return on your investments.
The reason that people invest in private equity is that it offers the potential for a large payoff, of course it also comes with serious risk. Private equity is usually invested in smaller companies that are seeking to expand. Some of these companies will be successful offering a huge return for the investor, however many of these companies will fail. When you subtract the failures from the successes private equity investments rarely yield significantly more than investing in gold despite the much greater risk and difficulty of investing.
Investing in private equity is really only an option for a small percentage of people, it just doesn't make sense for most investors. The odds of getting rich by investing in private equity are pretty slim and in reality the returns are not really any better than you would get from other safer investments. You may invest in a company that makes a lot of money but unless you are extremely lucky you will also invest in a lot of companies that lose money. A far better investment strategy would be to put your money in safe stable commodity like gold and let your money grow steadily over time. This is the true path to becoming wealthy.