If you had $20,000 to invest where would you put it? The bank? Stocks? Bonds? Maybe even gold? James Altucher, managing director of Formula Capital, says that even though he thinks stocks are going up, there are better ways to invest your money.

Altucher says investors, especially younger ones, would do better to invest their money in themselves.

His reasoning: You could put, say $20,000, into stocks and if you are as lucky as Warren Buffett, you'll make $2,000 to $4,000 or so in the next year. (Buffett has been averaging 10% to 20% returns in recent years.) Not life changing. On the other hand, if you can come up with ways to invest that money in starting your own business, for example, you have a much better chance of generating returns of 100% or more.

Altucher knows what he is talking about. He did this himself, starting sites such as smokelove.com and smartorstupid.com years ago. They were both failures but eventually he developed Stockpickr.com, an online community of investors, which grew to one million unique visitors per month. Altucher cashed in when the site was bought by TheStreet.com in 2007. His total investment for the three sites: around $10,000. While Altucher won't say how much he generated from the sale of Stockpickr.com to TheStreet.com, it was undoubtedly at least a multiple of ten times his initial investment.

His point is clear: While the stock market should offer decent returns over the next few years, an investment of $20,000 to even $100,000 won't give you the kind of payoff that you could get from making an investment in your future.

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Investors, especially younger ones, would do better to invest their money in themselves. Can't agree more.

October 08 2010 at 10:28 PM Report abuse rate up rate down Reply

A good investment in your future is a bit of time and money in your health. Then try to figure a way to compensate if we have a serious inflation.

October 06 2010 at 8:27 PM Report abuse rate up rate down Reply

you don't know anything about investing several weeks ago you said gold was going to nothing

October 06 2010 at 6:27 PM Report abuse rate up rate down Reply

I would tend to agree... People should invest in themselves (education), up and to about the age of 12. After that, you should have an awareness of market principles and begin investing. At first, try using "play money" and track your achievement over the course of 1 year. By the time you have your first job, you ought to have begun and savings account and soon thereafter, puchased stock in a company in which you believe. As soon as possible, begin to diversify. As Peter Lynch once said (loosely), "Watch for new things, that are happening right under your nose." Forget about bonds, until you reach three-digits (100 years of age, or older). Start your own small enteprise... I started with soda bottles (deposits), which I collected while making .50 cents a day, cleaning a car wash. Be honest in all of your dealings and have a heart for those both ahead of you, and behind you. Whatever your station in life, God will cause the sun to shine on you, so long as you remember the immutable principles, laid forth in the Holy Bible. Oh yeah, you will make mistakes, so forgive those who rain on your sunny day and you will be planting many "sunny days," in the future. To this extent, I would concur with the author... We must all, trust in God.

October 06 2010 at 5:52 PM Report abuse rate up rate down Reply

"Train Songs" are proliferating at an increasingly, accelerating rate of growing velocity! I'm not sure what thing means, but I see it as dark pall, over an occulted place, that was once in the shade. If you are involved in "train songs," puleeese, STOP IT! thank you.

October 06 2010 at 5:36 PM Report abuse rate up rate down Reply

Sure, but what about that $20,000? I belive that business can go either way. For me, I think that stocks are going like a roller coaster ride. Like this week, stocks are blast off. It really sounds cool.

October 06 2010 at 5:34 PM Report abuse rate up rate down Reply

Egads! I see Motorola suing Apple, McDonalds getting sued over using toys to promote Happy Meals, Toyota getting sued by a group of shareholders over the drop in stock price..... These days, if you are going to start a business, it seems like a law firm offers the best prospect for growth. Can I sue myself if things dont work out the way I planned? There ought to be a cap on the number of lawyers this country adds to the bar each year....

October 06 2010 at 5:28 PM Report abuse rate up rate down Reply

Wasn't he a regular at Seinfeld sitcom ?

October 06 2010 at 4:57 PM Report abuse rate up rate down Reply

Nice hair. I'd invest in a better toup...

October 06 2010 at 10:56 AM Report abuse +3 rate up rate down Reply

Building a business , believing in investing in yourself are two great points made in this article. If you choose to go this route as an entrpreneur make sure you write a complete business plan. By complete, I mean one that forecasts your financials, provides supporting text for Executive Summary, Business Description, Marketing Strategy, Operations and Industry Report with competition defined and growth possibilities. One recommended Industry Specific Business Plans is QUICKPLAN www.quickplan.com They ahve over 75 industry specific plans ready to edit into your own. Sometimes too, the best step to take is to write your plan to see if the effort is worth the investment of time and money v. the year end profit(s). This shows up immediately in the financial forecasts you create.

October 06 2010 at 10:36 AM Report abuse +3 rate up rate down Reply