Why Facebook is More than Just a Safe Investment

Facebook is a Great Investment

I Began Researching Facebook for The Book I Was Writing: Before it Was Published I Found Myself a Facebook Investor:

Facebook was born while I was in college. At the time, I was considered a ‘late adopter.’

I fought it, you could say. First, it captured all of the girls. (Smart).

Soon after, most of the guys trickled in.

Eventually it was my entire campus. Actually, it was all of the campuses.

Facebook began as a ‘college-only’ social network, meaning you needed an @.edu email address to sign up. Then it opened up to the public. Then the world.

Recently, Facebook achieved one billion active users in one day. ONE DAY!

Facebook also owns Instagram, WhatsApp and Oculus Rift, after several billion dollars worth of purchases.

Many said they paid too much for these companies. Many of those people are silent today.

I recently wrote a book on how to effectively use Facebook for your real estate business. It is really a book for  anyone in sales looking to effectively utilize the power of Facebook.

I started researching and writing earlier this year. Before long, I made my first investment in Facebook. Soon after I made another. Additionally, I plan on purchasing at least two more blocks before the year is over.

I am not a trader. I am an investor. I usually prefer to invest in income streams (ie. Cash Flow). But there are many roads that lead to wealth.

For example:

I can invest $100 every month into a dividend paying stock and grow that income stream over time with dollar cost averaging and appreciation. (I do this too).

Or:

I can buy a stock for $100 that does not pay a dividend, but instead has the potential appreciate at a much faster rate than a slow growth dividend paying stock. When that happens, I now have a larger sum of capital with which to invest in an income stream.

You see, my end goal is the same: Passive Income.

These are two examples of ways to obtain it.

As I stated above, Facebook is more than just Facebook (Instagram, WhatsApp, Oculus and more…) So in a sense, Facebook owns the present (anyone in High School and Older) and the future (Tweens using WhatsApp, Instagram and eventually Virtual Reality).

 

Facebook’s Secret Sauce:

But Facebook also holds a secret sauce in it’s grasp. In fact, in addition to all these other reasons I love Facebook as an investment, this aspect might be the safest bet that Facebook is more than just a safe investment for the years to come. Simliar to why cigarette companies were such a great investment.

Or why Coke and Pepsi dominate both Warren Buffett’s portfolio and refrigerator (He owns Coke but drinks Pepsi.) Cigarettes were proven to be addictive. Despite many current claims, studies also show that sugar is addictive. Both of these substances provide the brain with pleasure, despite the fact that almost everyone knows they are bad for you in the long run.

I recently heard someone call Facebook and Twitter ‘dopamine snacks’. I wish I could remember where I heard it because it’s brilliant. Facebook and Twitter are the reason its so hard to read books any more.

We get bored very easily. Reading short bursts at a time actually provide our brains with a pleasure sense, or dopamine snack.  People either love Facebook, or they hate it. But almost everyone still uses it. What does this sound like to you? Addiction? I am not arguing that Facebook is healthy for you any more than I would argue that sugar water and tobacco are healthy for you.

I do believe that you can use Facebook for good, and it can be a great tool to grow your brand and market your business. Additionally, there is no better way to stay in contact with everyone you have ever met and will meet (even those you don’t like.)

What I am arguing is that Facebook is a great long term investment. The upside potential is incredible, and the downside risk, in my opinion, is extremely low. It is so well-positioned to succeed that I do not think one bad step would hurt them like it would another company.

Could it survive a Volkswagen like scandal? Possibly. It has the tools (the company purchases listed above) and the people (Zuckerberg, his team, and now the team of people who founded companies like Instagram, WhatsApp and Oculus) and has already proven it has the process. (Somewhere Marcus Lemonis is nodding) But sometimes things happen faster than I imagine.

The last time I felt this way about an investment was with housing in 2009. I mention this because I knew housing was a great investment at the time, but my time horizon was 10-30 years. Housing bounced back much more quickly than I expected, but I was also not surprised when it did.

Now take special note: I do not mean to say that I think Facebook is where housing was in 2009. Instead, I get the feeling that Facebook is where Google was around 1999. Facebook also has the advantage of learning from Google’s playbook, with both its successes and failures. I expect Facebook to be a very great investment in the many years to come.

I would not be surprised if Facebook doubled in a couple years. Maybe it will take 10 years. Facebook is not my only investment, and I feel confident investing in an appreciating stock like this because I am also well-invested in many cash flow producing investments.

Of course, I could be completely wrong about all of this. It wouldn’t be the first time I was ever wrong about something. But I am willing to put my money behind this belief. And if I am wrong, then please buy my book. I will need the sales.   


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