Accumulating Wealth

"The worst guilt is to accept an unearned guilt"

-Ayn Rand

Welcome to The Golden Sense! Urban legends are popular myths and people just love to talk about them and spread them to others. These include such claims as the only things that would survive in a nuclear holocaust would be cockroaches and Hostess Twinkies; that swallowed gum takes 7 years to digest; that you can recharge your cell phone using body electricity; and that the female praying mantis always eats its mate. None of these are true by the way, according to the experts (whoever they are).

This brings us to a topic that isn't an urban legend, but something that should be given serious thought. There are principles that can be followed in order to accumulate lasting wealth. The Golden Sense has touched on this subject in the past and it has been written about many times by other authors. Many of these authors have different formulas but there is a general theme among them all. It is important to keep in mind that money isn't everything in life. However, wealth accumulation does provide a ticket to a life of freedom and stability. In order to achieve this goal you need to set up your affairs so that you can withstand a financial crisis as well as inflation proof your wealth. Throughout centuries people have followed five basic techniques that have generated great success.

The first and most important thing is to develop multiple income streams. Active income comes from working in a business as an owner or an employee. Developing one or more large income streams is critical to building lasting wealth. Owning a business is often the best way to generate large amounts of income, but you can also do very well by being a highly paid employee. There are thousands of rich executives, salesmen, lawyers, bankers etc. It is never too late to get a job or own a business. By having multiple recurring active incomes you will be able to save and have cash readily available for your everyday activities.

The second principle is to invest money in high quality large dividend paying businesses like Exxon Mobil, Coca Cola or Disney. Enduring businesses have built fortunes for Warren Buffet, Bill Gates, the Rockefeller's and the Rothschild's. Buying ownership shares in public or private companies can be extremely lucrative. 

The Casey Daily Dispatch provides an excellent example.

"Consider someone who bought an ownership stake in Johnson & Johnson in 1990. At the time, J&J was an established blue-chip leader in consumer products and pharmaceuticals. It was one of the best businesses in America. In April 1990, someone who bought an ownership stake in J&J began earning the company’s annual dividend payment of $0.15 per share. This translated into a 2% yield on the investor’s capital.

Over the next 25 years, J&J grew from $11 billion in sales to $74 billion in sales. It also increased its dividend payment every single year. The dividend increased through recessions, bear markets, and terrorist attacks.

By 2015, the person who bought an ownership stake in J&J in 1990 had watched the value of his stake grow by 1,321%. He was earning an annual yield of 42% on his original investment. And he made all this money by owning one of the world’s best businesses."

Businesses like Johnson and Johnson maintain value over time and they can create enormous wealth for you as an investor. 

The third principle is to purchase prime productive real estate. This means purchasing real estate in areas of high demand (think New York or Santa Barbara) or purchasing productive agriculture land. Whether it is a prime location or highly arable land, these types of properties can produce income for you regardless of what happens with the stock market or your day job. Productive real estate never goes out of style. Sure, real estate prices fluctuate, but highly desirable areas to live or land that produces quality food is something that stands the test of time. 

Taking on large debt just to own a home doesn't count. Taking on hundreds of thousands of dollars in debt to own a home can often be a mistake if done in the wrong area. Certain areas go in and out of fashion and some areas are subject to large taxation. These factors can be devastating to your wealth accumulation plans. The point is, choose wisely, and don't over extend yourself financially. 

In order to build lasting wealth, you must crisis-proof…inflation-proof…and lawyer-proof your money. This brings us to investing in precious metals in different political jurisdictions. Establishing a grantor trust or an LLC outside of your home country can be a huge asset. Create a trust or establish an LLC with the purpose of owning precious metals that are stored in different countries around the world. This is an effective way to shield your wealth from lawsuits, aggressive bankrupt Governments, and political instability. The precious metals will inflation proof your wealth and retain value over time. All this can be done quite easily, but I recommend researching your options and requirements before taking action.

The fifth principle will insure that you can retain your money, increase your options, and provide you with lasting freedom. I am talking about obtaining citizenship in more than one country. It is important to obtain more than one passport. Each person typically obtains a passport from their birth country, however, you should also seek to obtain additional citizenship from the country your parents are from or go through the process of applying for residency in another country. Doing this is not as hard as you think. There is a multitude of options in the world. Having dual or multiple passports will enable you to increase your options for work, business, residency, tax jurisdiction, and freedom of travel. This is an important tool for retaining and increasing your wealth and freedom. Nations and countries are like stock markets, they go through booms and busts and likewise go from freedom to despair. By having the option to come and go as you please is a freedom well worth the effort. This alone is all the wealth in the world that you need. 

By establishing and practicing these five principles you will ensure lasting wealth and stability for yourself and your family. Successful wealth accumulation can be done. It won’t happen overnight because it takes effort and persistence. As you slowly accomplish the five principles you will eventually feel the freedom and security that was once just an urban legend to you.

Over and Out

T. Norman











Brown, Steve. 2015 Bank Investment Daily

Hunt, Brian. 2015  Casey Daily Dispatch