Read Next

Patri on Compound Interest vs. Investing in Your Skills

The ever insightful Patri Friedman has commented on "My Spending Over the Last 8 Days." Very good insight on the pros and cons of investing in assets for compound interest or investing in your own personal development -

It's tricky, because on the one hand, there is all the magic of compound interest you refer to, and OTOH, if you love working and will be making good money the rest of your life, then you have ample opportunity to make it later. For people who want to retire as early as possible, working hard for max savings makes sense. The difference between saving HARD (and researching a minimal cost retirement in another country) vs. saving just 10% a year can easily mean retiring at 35 vs. 60.

Bur for those with valuable skills who like to exercise them (which it seems like is the case for you), who like to always have a hand in the game, the value of saving is less.

One unfortunate thing is that when you are young, you tend to have both rapidly growing savings and career, it is the time when investing in savings yields the most l ong-term returns...and so does investing in yourself. Both of them compound.

Personally, my net worth has gyrated insanely over my adult life, so making good spending decisions has always been hard!

Show Me The Money: Six Strategies to Put Your Cash to Work

On DROdio

UPDATE: I've posted lots of updates since I originally wrote this blog 2 years ago. If you want to go deeper down the rabbit hole, check out this post comparing Betterment vs. Wealthfront ETFs and this one on Peer to Peer lending.

My wife Sue and I have been mulling over how to most effectively deploy cash in the current economic climate to generate decent returns without taking outsize risks. We've honed in on six main strategies, which I outline below in descending order of risk.

Since everyone has a varying amount of cash to invest, I'm going to specifically call out ways to deploy small amounts of cash in some of these strategies, as I want this post to be really actionable for anyone. The most important part is to just get started, and the biggest barrier to doing that is you thinking "I don't have any money to invest." So get yourself out of that mindset and jump into the world of being an investor, even if it's just with $25 (yes it's possible, below), $100, or $1,000 or $10,000, or whatever. I also recommend putting money aside every month to invest; that's a great way to get started.

Riskiest: Angel Investing

Rendering New Theme...