If you are saving 20% of your income and investing it in a boring, long-term, buy-and-hold portfolio that's well diversified with a professional-level asset allocation - then you can feel good about speculating on some "fun stuff."
- Love real estate and enjoy being a landlord? Cool! Go get yourself an investment property.
- Obsessed with finding the next Facebook? Nice! Go invest in some Pre-IPO companies.
- Think you've got a knack for currency trading? Awesome! Go-to-town arbitraging dollars for euros.
- Feel like you your poker skills are second-to-none? Sweet! Go hit the high-stakes tables at Vegas.
But only - and I repeat ONLY - after you have your investment foundation built - saving 20% in a well-diversified, low-cost, index portfolio.
Don't let Wall St. (or your neighbor) sucker you into thinking speculating is investing. If you can't predict your return, then you are speculating. And if you are speculating, one of those unpredictable returns is -100%.