Comment by anon291

The purpose of people putting money into stocks or real estate is to allow for a simple, fairly 'hands-off' way to make money (real estate is not totally hands off, but is pretty close to a set-it-and-forget-it business).

Real estate works for this because you can really put in as much as you want into it.

Other business activities do not work because the entrance cost for non-rent-seeking business is extremely high and the risk is way too high compared to real estate. This is due to American regulation and labor laws.

This is a 'first-world problem', but now that I have capital, the question is 'what to do with it'?. Yeah, you could throw it in the stock market, but that's also rent-seeking in a sense because you're not really able to invest in primary rounds (I mean you can, but it's hard to find deals), so basically you're just providing liquidity to people, which is rent-seeking of a different kind.

So then the question becomes what else to do with it? I've given a ton away, but that's useless for the most part since it barely creates any economic value.

In my ideal world, I'd start a factory and hire a manager, but the capital cost of that is high, not because of the material or the rental cost, but because of the labor cost. So then, what's the option? I could easily outsource it all to China or India, but that's completely useless for the United States.

Then the question becomes, why start your own, when you could invest in others. Great! I would love to do that. It would be even better if I could simply invest in a local enterprise... Except, that's not easy either. Regulation over investments means that even investing in this is fraught with difficulty unless you want to establish some sort of 'fund'.

So basically, there's nothing to do with the money, which is sad, since I end up giving most of the money I make away anyway, and would prefer to have more of it to give away.

Until America figures out what it wants to be, it's going to be real estate for me... consistent incomes, fairly uncorrelated with equities (which I have a lot of too), etc. There's really not many other options here. There's barely any 'productive' activities taking place in the United States.