"The way to make money is to buy when blood is running in the streets."
John D. Rockefeller
Welcome to The Golden Sense! There are infinite ways to become wealthy, it's unfortunate they're so difficult to identify. Most people have a job and that particular job represents their main source of wealth production. It's tough out there and saving money can be difficult. One of the most important lessons for living in the modern world is that to survive you've got to have money. If you do find a way to get a little extra money, there are many different ways to make it grow or protect it. For the average investor, you and me, we're not geniuses so we have to have a financial plan.
The first and the most famous methods of investing is one which, upon thorough analysis, promises safety of principal and an adequate return. Basically, it means investing in non-risky securities that have a decent yield or dividend. In turn, this will produce a cash flow back to you.
The idea is to use the money from a dividend or yield and reinvest it into a similar (or the same) investment. If you reinvest your money in the same investment then your next dividend will be larger. If you buy another investment you will have a whole new dividend or source of income. By doing this you will eventually have a second, third, and fourth source of income. If you continue to purchase these "cash flowing" securities as you age, your income will naturally grow. Eventually, the money will be rolling in. This strategy has produced incredible results in the past.
People like Warren Buffet have made billions by investing in companies that were undervalued, safe, and had a good dividend. It's the way of compounding your way to riches.
Of course, today this method of investing is as difficult as ever. This is a nightmarish environment to be practicing value investing – because the margin of safety has been destroyed by central bank market manipulation. Stocks that cash flow are seriously overpriced and dividend yields are low. The bond market is no longer a "free market". The Federal Reserve and its "quantitative easing" have skewed the behavior of a normal functioning market. Bonds are overpriced and yields are below inflation levels. On top of all this, the economy itself is now basically dependent on the Federal Reserve and the stability of the economy is in question. The best time to start using this investing strategy is at the bottom of a bear market when everybody is avoiding stocks.
The second way of wealth is a bit different. This strategy requires existing money or a solid source of income (a wellpaying job) in which you can save. Under this method you systematically invest in assets that retain and hold value.
By purchasing assets that hold their value over time, it is a way storing and building timeless wealth. This method gets your money out of cash which inflation eats away at.
During the past decade millionaires and billionaires have been practicing this strategy. The wealthy have access to the best advice in the world. If you want to know how they protect their wealth, all you have to do is follow the money.
The wealthy have systematically purchased gold, precious metals, beach front real estate, sustainable farms, gems, diamonds, and high end art. All these items have seen their prices soar over the last 10 years.
The Federal Reserve has expanded the monetary base and asset prices have risen accordingly over the last decade. Even when asset prices fall, these items don't go bankrupt and still retain value. This cannot be said of stock whose company falls into bankruptcy.
If you used this second wealth strategy over the past 10 years you would have surely beat out people using the first strategy.
The items in the second strategy all represent an aspect of timeless value. Prices can be volatile, due to the Federal Reserve's QE program, and fluctuations often shake out the weak holders.
This strategy is crucified by the Wall Street bankers. This is predictable because they're just upset you are choosing not to buy their products (stocks and bonds). So forget them. In all honesty, any person at any time in history who has owned a large quantity of gold or precious metals has been rich. The person who owns the beach front house (free and clear) in Malibu, California isn't complaining. The person owning a few Picasso's is probably pretty confident about his or her financial security.
The wealthy have been buying these items as a way securing timeless wealth. You too can acquire timeless wealth by systematically purchasing items that hold lasting value.
The majority of financial professionals recommend diversifying your assets amongst both of these strategies. It is a way providing stability to your financial future. My suggestion is to choose the song that sings to you best. Chopping and changing strategies based on short term price action often delivers below average results.
There are numerous combinations that you can choose, it is up to you to try and pick the lock that opens the gateway to your financial well-being.
Sincerely,
T. Norman
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Research by Barclays finds only 21% of millionaires in the US said they got that way because of a business sale or profit vs. 41% in Europe and 57% in Asia. In the US more people said they saved enough to reach that mark or did so through personal investments.
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“Individual
rights are not subject to a public vote; a majority has no right to vote away
the rights of a minority; the political function of rights is precisely to
protect minorities from oppression by majorities (and the smallest minority on
earth is the individual). -Ayn Rand
I am huge advocate of individual rights. They provide the basis for a healthy and productive society. People often forget that our Constitutional rights are meant to protect the UNPOPULAR...not just the popular ideas in this country. Privacy rights in particular are a key component in protecting all other individual rights. Unfortunately, we have a Government who is no longer guided by the rule of law and "unpopular" ideas have become the Government's public enemy number one.
Recently, Edward Snowden who worked for a contractor of the U.S. Government blew the whistle on the National Security Agency for tracking all Americans phone records, wiretapping American citizens, and tracking individual Internet usage without warrants and due process.
The Snowden affair may be starting to turn against the US government. There is already a large contingent of Americans who don't trust the government. Snowden's revelations have simply intensified the distrust of the US government. Actually, many Americans applaud what Snowden has done, and they now feel that the US government is persecuting a well-meaning whistle blower.
It's a sad state of affairs when a whistle blower has been forced to flee to the governments of China, Russia, Venezuela, and Ecuador in order to avoid rotting away in a US prison, simply for publicizing the government's very unconstitutional crimes.
Now they've revoked his passport-- something typically reserved exclusively for international pedophiles according to Chapter 4, Title 22 of the US Code.
It's as if the government is happy to continue bending or breaking the law in order to destroy someone who blew the whistle on them breaking the law. Very strange indeed.
In the "Land of the Free", attention seems to have shifted. The discussion in Congress is not "let's shut down these programs," but rather, "how do we crucify Snowden?" That in of itself says a lot about what kind of people troll through the hallways of our Government.
References:
http://ww1.dowtheoryletters.com/
http://www.sovereignman.com/
