You could just accumulate gold and gems, and I know one man who does that (but he spent a lot of effort learning about gems). You can make yourself illiquid by buying real estate. I know a man who did that. In early 2008 he owned 12 houses. Today he lives in his van.
But most people will invest in securities. If they are not careful, they will fund a lavish lifestyle for someone else.
From Bloomberg News:
Clients jumped in. During the decade ended in 2012, more than 30,000 investors entrusted Morgan Stanley with $797 million in a managed-futures fund called Morgan Stanley Smith Barney Spectrum Technical LP. The fund already had $341.6 million invested during the previous eight years.
Top fund managers speculated with that cash in a wide range of asset classes. In that period, the fund made $490.3 million in trading gains and money-market interest income.I had never heard of a managed futures fund, but that's because I pick my own securities, thank you.
Investors who kept their money in Spectrum Technical for that decade, however, reaped none of those returns -- not one penny. Every bit of those profits -- and more -- was consumed by $498.7 million in commissions, expenses and fees paid to fund managers and Morgan Stanley.
Here's a money quote if I ever heard one:
Morgan Stanley’s chief investment strategist, David Darst, who has written a book on managed futures, declined to comment on his firm’s fees.