The rich arenât being distracted by the media and they certainly ain't down with âNetflix and chillâ. They are laser-focused, out there -buying assets on a dime- getting richer by the minuteđ°. Zooming, Skyping, and cashing-in and so should you đ đ!
What's up?
We are heading into heavy âDeflationaryâ waters ahead. How we survive these times is completely dependent on how well our Governments are able to run the different country enterprises and do what has to be done to navigate a âsoftâ Deleveraging - Deflationary period otherwise we might face upheaval and troubling times like WWII following the Great Depression of 1929. This will be a period wherein we will face Governments, businesses, and individuals having to cut spending, reduce debt and redistribute wealth as deflationary activities and more printing of money by federal & central banks as an attempt to reboot the economy with inflationary consequences.
How long will this Deflationary period last? Well it might take up to 3 years, before we get into a reflation upswing again.
How well we do personally, will be completely dependent on how well we are able to manage our mindset. How well we do financially will depend on how well we manage to learn from the past and implement the things - âfinancial principlesâ we know have and will work again and againâŠ
As we have been tirelessly determined and insatiable in our quest to study the true timeless & universal factors for financial success in order to achieve financial freedom đ€, we have come to realize how predictable the financial system truly is. It is all a matter of seeing the picture from the right perspective. All the âunfair advantageâ and leverage the rich & wealthy seem to have is gained by having the true and correct knowledge of What is happening When it is actually happening and Why itâs happening. That is the reason the rich know exactly How to thrive amidst it all.
We cannot emphasize enough that in order to achieve financial freedom you MUST change your thinking from the âquick fixâ, âeasy buttonâ, âno work requiredâ mentality to aspiring to fully understand the âbig pictureâ and mastery of the most important things at play. We are giving you the power of knowledge through, easy bite chunks blogs and easy to implement cheat sheets, but only you can help yourself and your financial situation by your âwillingnessâ to learn and apply these principles.
How does money work? Listen to a Billionaire...
Raymond Thomas Dalio (born August 8, 1949) is an American billionaire philanthropist and founder (1975) of Bridgewater Associates, one of the biggest hedge fund firms in the world.
Where Are We?
How do we know where we are? Well, we can never say with exact precision where we are but we have indicators that tell us where we âkindaâ are. The live treasury yield curve on our site, as one of these prime indicators, showed a âsmiling faceâ around July 2019 (snapshot below). We could guesstimate by this smile that (6-18 months later) a recession would hit around October 2019/March 2020 (click the graph and read the whole blog for more in-depth information); while the current May, 2020 yield curve is actually clearly signaling a weakened economy (doubtful line up). Even more striking is that in both snapshots the yield curve of May/July 2018 was depicting a very strong economy as the Yield curve puts up a "sad face". We did not anticipate the COVID-19 virus to be the worldwide trigger, the so-called "Black Swan" event, but we knew the deleveraging phase was coming â±. And it did make an âunforgettableâ big bang entry for sureâŠ
How Do We Fit The Puzzle?
Seeing events in their respective place in âthe Big Pictureâ will help you shift your perspective from overwhelmed by the frenzy of things coming at you to stepping above them to see their patterns through time. So how do you make sense of the many sliding puzzle pieces? We lay it down for you one puzzle piece at the time...
We encourage you to not only grab your free cheat sheets for a quick scan but to follow the complete thread of cycle blogs dedicated to giving you a more in-depth understanding of the different puzzle pieces at play. First, you need to have that helicopter view of what the heck is really going on, so you systematically know the logical next step of "HOW" to deal with it financially đ§.
You need to understand and adopt the mindset & the behavior of the rich and wealthy. To do that you must see what they see and then do what they do.
You also need to learn that when you pay attention to the details you canât see the big picture and when you pay attention to the big picture you canât see the details. Yet in order to understand the patterns and the cause-effect relationships between them, you need to see with a higher-level, bigger-picture perspective, and a lower level, detailed perspective at the same time. Just like you would driving a car, looking at the road ahead, pushing the gas pedal, switching gears when needed but always checking in on the rearview mirror.
What Do We Do Next
The biggest problem right now is that we collectively have people, companies, nonprofit organizations, and governments with low incomes and high expenses. The debts and other liabilities are very large compared to the value of their assets. They look rich because they spend a lot and think they have many assets (that are actually liabilities - the 4 asset classes cheatsheet explains the difference), and they even have cash so they feel wealthy. Once you understand that cash devaluates daily because of the endless money printing of the Central banks and ongoing inflation, you understand that saving money for the long term is just stealing from your own pocket. Saving only makes sense for the short run to invest in income/cash flow producing assets.
However, if you look carefully you will be able to âseeâ those who look rich but are in financial trouble because they have incomes that are below their expenses and/or liabilities that are greater than their assets.
So, if you project out what will likely happen to their finances, you will see that they will have to cut their expenses and sell their assets in painful ways that will leave them broke.
Instead of blaming others, the economy, or the Government. You need to take control of your life and financials right now.
Thrive On Timing
In flip to fortune, we explained a clear path on how to get to your first $5.000 starting from $0. You need to test the waters for the needs during these unprecedented times.
We also provided you with a clear path of ascension through the acquisition of the 4 asset classes. Because that is exactly what you need to do NOW! Choose an asset class that feels comfortable to you, use this time in history when asset acquisition will be the cheapest for the next 75 â 90 years to come and build true wealth, it's all in the arbitrage fix an flip. Everything you buy now in this downturn will boom. But you have to watch the real crash and low point for every specific asset class!!! Don't be hasty, don't be a fool, be informed!
Businesses start to default and file for bankruptcy; now is the ideal time (March â Sept 2020) to start acquiring businesses before they are wiped out or start recovering and before new stimulus might start taking effect. The growth opportunities are massive. Acquisitions enable you to grow into new verticals, expanding in your own supply chain or distribution channels, acquiring clients, traffic, or machinery and inventory from competitors in your space. Imagine the boost to your bottom line without having to start from scratch. Investors who are willing and able to step in right now are not only building their assets for true wealth but they are helping out đ. Investors are able to help distressed business owners out of a painful bankruptcy and crushing debt while also keeping a great portion of the current employees employed đ€! It might as well include your favorite restaurants, specialty stores you used to frequent that just might never come back after the lockdown if there weren't investors stepping in.
Real Estate residentials are still pretty stable because of the stimulus worldwide, be patient and wait for the aftermath starting September 2020 when prices might start dropping. Be careful with fix & flips in a downturn, only go for quick lipstick flips (in & out < 1 month), certainly no new constructions or focus primarily on buy&hold. Nonetheless always be checking the market indicators for sudden or unexpected shifts. Even though commercial real estate and retail might be on sale it doesnât mean its right to buy now, they might not come back for a long time. What new Kondratieff-wave cycle (K-wave) is coming up next? What else is a better move knowing the demographic shifts ahead (retiring baby boomers by the millions worldwide)? Investors who are willing and able to step in right now are not only building their assets for true wealth but they are helping out đ. For example investors are currently helping many from the rising burden of mortgage bills while the assets are vastly declining in value. Lending is tide during this or any downturn. Think of all the people that might stay in their home when an investor steps in with a provisory note and takes over the mortgage before foreclosure en rents back to the owners, just like it happened in 2008. The banks won't forego forever.
The Stock market crashed at about -42% in March. Because of the endless money printing of the Federal bank, stocks have has been climbing back but donât be fooled the Stock Market will deleverage. Experts expect a decline between -60 to -80%, just like in 1929 when the stock market crashed at -89%. Wait until September or October to see the real deflation wipe out. It's like stepping into a landmine to stay in the stock market right now with its current volatility only driven by Quantitative Easing and the Fed buying up financial assets from the Government rather than market demand. You might consider starting to buy on a dime looking for stocks servicing the new K-wave for bio-nanotechnology coming up next after the inevitable deflation.
Commodities mind your Gold, Oil, and other commodities. Oil has crashed below negative -because producers and futures traders are paying buyers to take the Oil crudes off their hands since they have nowhere to store it themself. Future traders rely on the consistent demand for crudes to make profits on the arbitrage not on the physical product itself. Gold seems to be booming. The booming right now is driven by the panic of inexperienced buyers stepping in the upward frenzy while big investment companies and hedge funds are actually selling Gold for top dollars. Gold/Silver will correct after the current market flush as they are not deflationary hedges. Wait corrections out before you make major moves into the commodity market who is next in line to boom into 2040. You will have plenty of time as a prudent investor to step in when the inevitable panic downwards starts to rally if you can control your "FOMO"! Remember those who control their mindset are bound to win the money game. The graph below is relevant and true for all asset classes.
The mastery of the money game comes when you not only understand one of the asset classes but all of the asset classes and their mutual relationship to wealth đ°.
After acquiring a helicopter view, you will need to use this time to master the details of each and every asset class to properly now how to handle the specifics of the asset class and their respective cycles.
We will continue to focus on all things real estate. Alternating from high-level strategies to laser-focused detailed operational and tactical action steps to implement. But every so on we will expand our view to see the bigger picture as we are confronted with it like we are now by also taking a peek into the neighboring sister asset classes to learn from their processes, cycles & waves. We sure hope we gave you both perspectives with this fitting the puzzle pieces item đ.
In the end, even if it might look to be very specific and different on a high level you will discover itâs the same game over and over again... go play, invest đ đ!