One thing that needs to be mentioned is how the investments are allocated. It seems to me that many white-collar people are stuck with some very vanilla investm

One thing that needs to be mentioned is how the investments are allocated. It seems to me that many white-collar people are stuck with some very vanilla investments. You can: - Stick your money in a pension fund managed by some professional. This guy has very little incentive to do anything interesting. But you don't have time to look at a bunch of stocks and bonds, so you'll get index + noise - costs. The big thing here is the manager feels constrained, whoever he is. There's a mandate and you have to stick to it, so be conservative. - DIY your investments. Probably this means listed equities or indices. If you're a great stock picker, that's great for you, but the money is simply sat in the stock market waiting for your retirement. Listed firms tend to have the opportunity taken out already, mostly. - Stick your money in a hedge fund. Not everyone is allowed to do this, maybe someone got burned on it in the past. This isn't necessarily much different from option 0, but more leverage and better information might help some of these funds beat the market. As a whole, probably not, but at least you can look at other things than just buy-and-hold some stocks. - Invest in new businesses. You can certainly pony up the money to start a restaurant or a gym or whatever. People do this, heck I'm doing it, but I don't see it much. I get the sense that we'd be much better served with most people plowing their money into local businesses than the stock market. Skin in the local game. But it's also quite hard to build trust, you need to go through a lot of potential partners to find ones you like. Or get lucky and meet someone. - Give your money to a VC firm. Back to agency problems. Does the VC have incentives to build businesses? It seems like the incentive these days is to swing for the fences on all the investments and hope some do well. Might work for the VC, but does this work for society? I'm sure there are a number of burned out unicorns that would have been fine as medium-to-large businesses. - How about PE? Maybe I'm just cynical, but PE seems like extractive financial trickery. Buy a firm, load with debt, pay the PE firm, hope things work out anyway. What happens to the investment? Well it's still gonna be in established firms, often big ones. A lot of that money ends up with management, who will have the same problem that we're thinking about (money from the acquisition incentive burning a hole). - Invest in firms in other countries. You don't know people or legal systems in other places. Big lemon problem.