As developers, or other flavours of techies and digital people, we get paid pretty decent salaries.
With all that income, we would be foolish not to think about saving and investing some of it for the future – for the sake of our future selves as well as those we care about, such as spouses, children, relatives, friends.
One of the key insights of a range of investors over the past several decades is that money loses its value over time. This is due to a combination of inflation and opportunity cost. Inflation reduces the buying power of our money, so that $20, 5 years from now, buys less than $20 would have bought today. Opportunity cost means that the money that is just sitting there and doing nothing isn't going to grow, whereas money that is invested in some productive way may grow larger in the future.
Another key insight is that you should invest in what you know. It's better to invest in areas that you understand well, so that you will be better able to judge which investments are good value for money and which aren't. In this regard, investment is similar to any other kind of purchase. If you want to buy a car, it's worthwhile doing some research in order to understand what you're buying and make sure you get a good deal, both in the short-term and long-term.
Putting these two insights together, I arrive at the following question:
What are some ways that developers/techies can harness their specific knowledge and skills, in order to invest and grow their wealth?
Before throwing the question open to the DEV.to community (which I'm more than eager to do!), I'd like to give you a brief run-down on some ideas I have used or am exploring.
Investing in technology to save time/money. This is the easiest and lowest-hanging fruit. As software/tech people, we often know how to automate certain aspects of our lives and use computers and other devices to save ourselves time and money. We are often early adopters of technology, so we can realise savings earlier than the majority of people. A few examples: I saved on overseas calling costs by using Skype and Google Voice when these were still new technology. I saved on small purchases by ordering online when this was still new. I developed my own calorie/cost-tracker for food, thus saving money and losing weight. These investments continue to save me money.
Investing in online courses to increase our wages. Using our technical knowledge, we can be selective about which courses we invest time and money into, and thus end up with specialised knowledge that's a good fit for ourselves and the market, resulting in higher wages.
Investing in online properties, such as domains. By purchasing a marketable domain name and building an online presence on top of it (or paying someone else to do so) we can own a slice of the Internet and generate advertising or other revenues through the traffic we capture.
Building a start-up. Not for the faint-of-heart, but opportunity does exist, for those with a good idea, the right networks and a good sense of timing and the market place. If we live frugally and earn a decent wage, we can save up enough money to take 6-12 months off our regular day job and try to launch our own startup. It might be a paid software product or SAAS, a consulting firm, an open-source project that can be monetised via support or premium services or a blog or YouTube channel that can be monetised through advertising.
Venture funding. This is an area I still need to learn more about. To my current knowledge, not many people can be VCs (Venture Capitalists), partly due to the large amounts of cash needed in order to gain leverage, and partly due to regulations that require investors to have a certain amount of extra cash in order to engage in certain kinds of investment activity. However I am keen to explore this area further and look for ways that I might be able to use my technical expertise and judgement to invest in companies and projects in which I feel confident in their success.
Picking stocks. I don't see big short-term opportunities in this area, but with some insight into the tech market specifically and a long-term 'buy and hold' strategy, I imagine some tech people could make a decent amount of profit from a small number of well chosen tech stocks.
So now I'd like to pass the baton to my fellow developers and techies. What would you consider interesting investment ideas for people with your knowledge? Do any of the ideas in this article strike you as either good or bad, and why? Have you started or invested in VC firms, or have you considered doing so, and why/why not?
Keen to get your thoughts!