December 5, 2012
However bad this fiscal cliff will be for the short term, one can't help but wonder if the fiscal cliff will be actually good for America's future in the long term. Apparently, our elected officials in Washington can't come to an agreement and increased taxes for everyone is a more likely possibility rather than one class of American citizens paying more in taxes than the other. In the short-term, perhaps in the first quarter or two of next year, the economy may take a little nose dive...but long-term, given our debts and deficits, perhaps a tax increase and reductions in government spending (i.e., a fiscal cliff) won't be the worse thing America has seen.
The wealthy, even with the threat of increased taxes, will still find ways to invest and make money tax-free...mostly because they will probably invest a portion of their wealth in muni-bonds, which are usually exempt from Federal and State taxation as I state in my book on tax loopholes, TAXLOOT and in my article about where the wealthy will be looking to invest for 2013 (click here) .
Notwithstanding, the Federal Reserve has vowed to keep printing money in their ineffective Quantitative Easing campaigns (QE1, QE2, QE3, QE4, QE Infinity)...this is no doubt currently causing far more trouble at home and worldwide when it comes to devalued currency, inflation, and asset bubbles bursting in the near future.
Traditional investments, such as stocks and bonds, might not perform the best over the next 2-4 years...but other alternative investments - such as real estate, commodities, etc. might be a better pick as the world economies figure out a way to synchronize.
November 29, 2012
|Univ of CA protest after 32% tuition hike|
The debt levels continue to steadily increase in our country as we watch the National Debt Clock tick away as if we're watching a bomb close to detonating. We know eventually something has to happen - there's no way our national debt can simply keep rising into infinity. There's no way that other countries will simply continue to loan us money without some application of austerity measure similar to what's being implemented in the EU.
The aftershocks from such a calamitous event would be disastrous at home and for the global economy. The economic duress we're under today will probably become even worse and cause more American unrest than what we're feeling today.... unless there are strong measures in place to prevent our country from further decline...which Congress has failed to do repeatedly. As college tuition default rates climb, bankruptcies increase, our savings rate and the home foreclosure rate continue to be a nuisance on our economy - an investor has no choice but to seek out global opportunities in search of alpha (profitable investments). Instead of buying that next gen- Ipad or LED flat screen TV, use that discretionary income to invest in real assets.
And most of the global opportunities for real assets will be in real estate, agriculture, land, gold, silver, and other commodities to name a few. If the economy does get better, there will be an increased demand for the items mentioned above and the owners (or investors) of these items will stand to make a generous profit. However, if the economy continues to get worse and our dollar keeps its trend of decline, then these commodities will become even more expensive as the government continues to implement its Quantitative Easing efforts to devalue the currency (or in their words, continue to pursue policies that target inflation). [Has anyone noticed how consecutively wrong Bernanke has been in his statements to Congress about the state of the economy? Perhaps it's just me....I digress...]
But, for sake of argument, let's say I'm completely wrong about everything that I've ever stated on my website, and American currency rises from the ashes like a Phoenix.... if this is the case, then you have nothing to lose or worry about except increased taxes, less entitlements, and global competition.
However, if I'm right, then what's the harm in taking out an insurance plan for your wealth's sake? And give yourself peace of mind by protecting some of your wealth and converting some of your dollars for real assets such as, real estate, agriculture, land, gold, silver, and others? Instead of TVs, Ipads, etc.? Start investing little by little every month and you'll soon realize the benefits. Worse case scenario - you will have diversified your money into investments that will pay for themselves in the future. Best case scenario - you will have made an exceptional profit as the dollar declines as our country's role in the global economy is decided.
Just a thought.
November 27, 2012
U.S. Declines Currency Manipulator Label For China - WSJ.com
Can't bite the hand that feeds you....
November 20, 2012
An interesting read for those who are interested in the ASEAN Economic Community and its involvement/future in the global economy.
November 4, 2012
Europe needs to contain its money woes and increase stability for its currency. The country is experiencing "capital flight" where the money is leaving the country in search of a safe haven. Normally, the United States would be a sure safe haven but we also are experiencing our own woes in the form of pending tax increases, raising the debt ceiling (for about the 11th time in 8yrs), and automatic spending cuts. The United States has raised its debt ceiling for over 140 times since 1940 - Office of Management and Budget.
The World Economic Outlook report can be found here: http://www.imf.org/external/pubs/ft/weo/2012/02/index.htm
The IMF expects advanced economies to grow at least 2% - which the US has done, but unfortunately most of America's growth is due to government spending on mostly military goods/services. Which is somewhat interesting since the spending has been done right before an election year. Nevertheless, unemployment remains high and companies continue to hoard cash due to uncertainty running amok in the marketplace.
A Solution for You:
There is a way for you to take advantage of this situation for your own benefit. Invest in commodities such as oil and agriculture products. Investing in commodities is how you can make some money no matter who's elected or if the economy turns up for the better or turns down for the worse.
If the economy gets worse, central banks will print even more money trying to stabilize the global economy...the result of their printing will devalue the currency and cause prices to increase. When prices increase your investments increase. If the economy gets better, then the increase in demand for commodities will increase as people will have more money to spend and corporations will need to use more resources for expansion.
October 29, 2012
Below are highlights of our currency's woes during the recession (excerpt from Currency Wars by James Rickards):
- October 28, 2008 - Interfax reports that Vladimir Putin, prime minister of Russia, advised Wen Jiabao, premier of China, to abandon the US dollar as a transaction and reserve currency
- November 15, 2008 - The Associated press reports that Iran has converted its financial reserves into gold
- November 19, 2008 - Dow Jones reports that China is considering a target of four thousand metric tons for its official gold reserves to diversify against the risks of holding US dollars
- February 9, 2009 - The Financial Times reports that transactions in gold bullion have reached an all-time record
- March 18, 2009 - Reuters reports that the United Nations supports calls for the abandonment of the US dollar as the global reserve currency
- March 30, 2009 - Agence France Presse reports that Russia and China are cooperating on the creation of a new global currency
- March 31, 2009 - The Financial Times reports that China and Argentina have entered into a currency swap, which would allow Argentina to use Chinese yuan in lieu of dollars
- April 26, 2009 - Agence France Presse reports that China is calling for the reform of the world monetary system and replacement of the US dollar as the leading reserve currency
- May 18, 2009 - The Financial Times reports Brazil and China have agreed to explore conducting bilateral trade without using dollars
- June 16, 2009 - Reuters reports that Brazil, Russia, India, and China, at a BRIC summit, call for a more "diversified, stable and predictable currency system"
- November 3, 2009 - Bloomberg reports that India has purchased $6.7 billion worth of IMF gold to diversify assets away from the weaker dollar
- November 7, 2010 - World Bank president Robert Zoellick states that the G20 should "consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values"
- December 13, 2010 - French President Nicolas Sarkozy calls for the consideration of a wider role for SDRs in the international monetary system
- December 15, 2010 - BusinessWeek reports that China and Russia have jointly called for the dollar's role in world trade to be diminished and are launching a yuan-ruble trade currency settlement mechanism
October 28, 2012
|Mayer Amschel Rothschild|
Price fluctuations are a normal symptom of a failing currency. Ever notice how gas prices go up, then go down? Then go back up again? Think about how fast college tuition has been increasing lately and the student protests that are happening as a result? At one point the price of a home was rising ever so quickly, just to see the price come crashing down and a lot of people's wealth wiped out.
The role of the Federal Reserve is to focus on price stability in order to keep our economy "going strong". But so far, the Federal Reserve has not been doing a good job. There hasn't been much price stability in the last 10 years. I have a one-ounce silver dollar that would've purchase 3 gallons of gasoline about 7 years ago, today it will buy about 10 gallons of gasoline. As Ron Paul would say, "that's wealth preservation". Should we keep putting dollars in our bank account? Or should we add something our government can't devalue - like Silver and Gold? (Although FDR did make it illegal for Americans to own gold at one point in our nation's history.)
As a global economy emerges, how long will the dollar remain as the currency of trade? Given our country's deficit, pending fiscal cliffs, and debts owed to other nations? And the global economy is starting to take action against the dollar: Russia and China conduct trade with each other in a currency besides the dollar. The IMF suggests another currency or "basket of currencies" is needed as the dollar becomes worthless.
Given all the bad news and warnings about our currency and debt levels - should we prepare for the worse? It's as if you're driving an old car and all of the warning lights begin to flash and beep - yet instead of pulling off the road and fixing the problem...we keep driving. Do we really believe our government is telling us the truth about our money supply and its true value? Is that 401K plan really a retirement plan when 60% of the people that have one, can't retire and live comfortably with the money saved/invested?
October 26, 2012
October 19, 2012
Just an interesting article I happened to come by today - looks like health insurance will continue to steadily go up! They say just 4% - but speaking for myself - my health insurance just saw an increase to $141/month from $117/month. Talk about inflation! That's about a 17% increase! Where's all of the price stability that Bernanke promises?
I suppose that checkup and other wellness trips were costly to me...I suppose because I'm self-employed, I'll be able to write some of this off or find some way to counter this spike in cost. Hopefully it will be beneficial in the long run and reduce my 17% increase in premium. Or I'll just search compare plans via www.ehealthinsurance.com
Have any of you received a higher premium notice from your health insurer? By how much are your premiums escalating?
October 18, 2012
October 2, 2012
Nevertheless, it is a basic investment platform, and once I mastered Sharebuilder, I wanted more complexity because there are so many different strategies in making money with online trading that Sharebuilder didn't offer. Plus, Sharebuilder limits you to mostly stocks, and doesn't give much option for bonds, currency trading, mutual funds, etc.
I thought I found my answer in OptionsXpress - which offers pretty much all of the exotic transactions above including futures trading. But it became pricey over time and sometimes I feel that it offered me almost too much information - and it eventually became confusing! Charles Schwab is the most cost effective and is definitely a good runner-up.
But I think Sharebuilder is the most user-friendly and not overly expensive, which is why I give them the nod as the best online trading platform.
September 14, 2012
I wanted to find the answers to why Jamaica is not an economic powerhouse? Or why isn't the country considered a part of the "emerging markets" like that of Brazil, Russia, India, and China? What is keeping the country down and the majority of its citizens in a state of servitude?
My discovery was that the country owes an absurd $4.5 billion US dollars to various international organizations including the IMF. Now if you've never been to Jamaica you probably would not know that $1 = approximately $89 in Jamaican currency. So if the country owes $4.5bn US dollars, this is the equivalent of $402billion Jamaican dollars or JMD. How will they ever pay this debt back in a country where at least 17% of its citizens are at or below the poverty line...and/or they work in labor/service roles their entire lives. Also, I don't recall any major corporations moving their headquarters to the island.
The government is forced to apply pressure in the form of taxes on its citizens and its main source of revenue (tourism), in order to unsuccessfully pay back its debt to the IMF, WorldBank, and other organizations. On a side note - our Federal Reserve states that inflation remains low, but in Jamaica, a gallon of gas costs $1.36 USD. Which is the equivalent of about $121 JMD! Imagine the effect of QE3 on Jamaica and other nations across the globe (since oil is priced in USD)!! Jamaica's gas prices could easily go from $121 JMD to $210 JMD! ($2.36 USD) Imagine you lived in Jamaica and you had to pay $210 JMD for a gallon of gas!
Is the government doing a good job for its citizens who remain in poverty? What can Jamaican citizens do in order to BE FREE? What are some ideas to lift the country out of poverty and repay its debts?
Just to be fair - there are some very nice establishments in Jamaica and there are parts of the island where people are doing very well. I went to a few jazz clubs and was pleased with the night life and live entertainment. Most Jamaicans take great pride in their work, country, and deliver high standards.
Here are a few pictures from the local newspaper:
|One of the best books I've read!|
How do you protect your money? The stock market has not been working in your favor lately. Why?
Because the "hot market" is not in the stock market. The hot market is in Real Estate! Prices in real property are still 40-50% off and rental rates are very high. Why put your money in the stock market when you can generate a relatively consistent income from rental properties?
You may say: "I'd love to get into real estate, but the banks aren't loaning any money!".
I say: "Go out and ask friends and family for money, the banks will accept 20% down if you have the cash."
You may say: "My friends and family do not have any money, or they're not willing to lend it to me."
I say: "Use money from your 401K for a down payment. Take a loan from your 401K with the intent to pay it back and go buy yourself a property. The rental income you will eventually receive within the next 2 years should generate enough to pay your 401K loan."
Due to our country's soon-to-be defaulted debt level and the consistent increase in the money supply at zero percent interest rates, an increase in taxes and reduction in entitlements is sure to come about. Therefore, I think the best resolve is (and always has been) to increase your passive income. Those who work the hardest will be taxed the most...those who have multiple and passive streams of income will actually have wealth to pass on to the next generation!
PS - I apologize for not posting my articles in a while - but I've enrolled in a commercial real estate program to study and learn about how to buy my first multi-family property. Some of you may remember that I was going to buy my first residential property - but this deal fell through at the very last minute. I'm looking to hopefully acquire a property by next month and possibly a second within a year or two.
August 23, 2012
The dollar continues to lose its value as our central bank, and other central banks abroad, continue to create money out of thin air. Drastic times call for drastic measures....meaning that we all have to consider drastic measures to protect our wealth, our income, our future.
Drastic measures such as:
- Having more than one job and/or career
- Taking a job that you feel is beneath you
- Becoming an entrepreneur and selling a product or service for extra cash
- Buying cash cars and reduce or eliminate credit card debt
- Cooking more (or all) meals at home (start a garden!)
- Going to where the jobs are (don't limit yourself to one state, or even one country!)
August 19, 2012
July 21, 2012
So I'm starting to get my feet wet in real estate and even though I have a plan in place...there are a few areas that I'm not an expert in. I figured that I'd just jump into this side of investing and everything else would "fall in place". But this is not the case. Before buying real property, one should have certain contacts in place to be sure that a place will be "move-in ready" shortly after closing. Contacts such as, plumbers, carpet installers (flooring), property inspector, etc.
Having such contacts in place will help your process run smoothly from start to finish. Also, joining a real estate association or organization will help to build your network and learn a lot from others who are in the same business as you are.
As the old adage goes, "you get what you pay for". Don't cheap out on everything! Find individuals who are experts in their craft and have several years of experience. Finding a good realtor would be the first place to start. S/he will be able to help you find the right property and possibly have contacts ready for you at a reasonable price...although I'd still encourage you to shop around to make sure you're getting a good price as well.
I went through maybe 3-4 realtors before I found the right one! In my experience, I like for my realtor to also have several properties of their own - because the insight from a realtor and from a property owner can help in selecting your property. Nevertheless, the decision is yours and you can only blame yourself if everything doesn't go as planned...but a good realtor will help you avoid several bad decisions.
I'm having a little buyer's remorse, but from what I hear is that this feeling is normal. It's a big purchase and having a little remorse is necessary - it's like having a gut check to make you really think about what you're doing. And to make sure that you're doing everything right.
Nevertheless, the lessons learned on this property should well prepare me for the next investment...whether it's another residential property or maybe something commercial. But no matter what - I'll be taking small steps until I'm off and running.
July 14, 2012
BUT, we know that true investors shouldn't run and hide during a crisis....they should run towards the opportunity.
The opportunity, I believe, lies in Real Estate. The average American citizen has been significantly affected by the economic downturn, and because of these events (that began in 2007) there has been a great transfer of wealth and a dramatic shift in American psychology. Unfortunately several Americans have lost their homes and severely damaged their credit scores. This will delay them in qualifying to purchase another home anytime soon. In addition, some Americans now are nervous about buying a home because of the uncertainty of their own employment status.
Therefore, most Americans will most likely rent versus owning a home in the long-term future. College graduates (from 2008-Present) consider renting versus buying their own home...that is, if they do not elect to move back in with their parents/guardians. The job market has been shaky for a while...and a shaky job market decreases one's appetite for risk in owning a home.
America has, or is becoming, a renters' society.
Other factors that support this claim are below:
- Real Inflation is on the rise
- Incomes have not kept up with the real rate of inflation
- Tax increases on individuals are inevitable
- Average career change in a lifetime for new grads is between 7-11
- The costs for going to college is becoming too expensive
- The average college student's debt is between $25,000-$27,000
- There has been a general decline in credit scores
July 13, 2012
Will Asia be the next leading economic power house? They seem to be helping the world out just fine!
June 27, 2012
I didn't get the opportunity to get my first property as of yet - I lost out on my first bid. But I hope to make another bid on this nice little 3/2 home located near downtown ATL. I just received an email from my broker about 30mins ago. So it's on to the next one!
We'll see how this one plays out - lots of opportunities in the real estate market. On another note, the market seems to be stabilizing on one hand, however, there are also a lot of contingencies that can tip the scale over into the abyss. The potential of Bush's Tax cuts not being extended, the debt ceiling, Universal Healthcare, etc. are all domestic issues that can send the economy back into a recession. Not to mention all of the Euro-zone mess.
One must remember that during a crisis, there is always room for opportunity. And opportunity only knocks once. What opportunities do you see in your part of the world?
June 22, 2012
Perfect time for investing in this asset class. It's not so easy to find profits in the stock market right now - so most investors are rushing to hard assets like real estate and commodities.
I think investing in real estate now could possibly be a win-win situation, because interest rates WILL gradually go up. And therefore if I can lock in an interest rate at 4% today...I'd win and the banks lose. Monthly rental prices are near $750 - $950 in the areas I'm considering. My mortgage is estimated to be at $270/month after principal, interest, taxes, etc. This equates to my monthly profit (in this scenario) to be between $470 - $670. Not too shabby.
I imagine the rental market is going to be in strong demand since there has been a significant transfer of wealth given this past housing market downturn. A lot of people have lost their homes, damaged their credit, filed for bankruptcy, etc. Not too many people have questioned why the credit bureaus have raised the bar on FICO scores, however, more people now have bad scores due to the downturn in the economy and the result of this is that people cannot get decent mortgages to purchase a home. So for now, they rent.
So therefore, I think that due to this unfortunate event - there might be a silver lining for those of you who have the gusto to take a risk and make a profit.
June 18, 2012
May 28, 2012
Have you noticed that several corporations today have no loyalty to the country from which they started? Several corporations nowadays are global brands and their first objective is to generate profits for the shareholders (or owners) that they serve. Think about it - McDonalds, Siemens, GE, Sony, Microsoft, Catepillar, BP, Exxon, ADM, etc. All of these listed corporations and several others do not wave a particular flag for its countrymen's sake, but for profit's sake.
May 19, 2012
Perhaps a glimpse of what is to come? Several people around the world are feeling the pressures of the bad economy and manipulation of the currency by central banks all over the world.
This is an election year and the stock market seems to be OK, and jobs seem to be coming back. But I can't help but wonder what will happen after the election is over. I think that we could be in for a rude awakening.
May 18, 2012
I really don't understand where these numbers are coming from...? $100 Billion??? Does Facebook even $500 Million in Assets? What do they produce? What is preventing the stock from nose-diving after the banks have made all of their money?
Maybe I'm completely wrong - but we will see what happens to all of these dot-com investments in the long term and whether people will be happy or forced to live with regret. I think it makes more since to invest in something a bit more tangible, or perhaps a company that produces something like General Electric, BP, Ford, etc.
Besides, regular investors like you and I have to wait in line to purchase a "popular stock" such as this. So the actual purchase price will be about $60/share or more. They're better investments in the market today.
May 12, 2012
May 11, 2012
May 10, 2012
I'm still bullish towards REITs (Real Estate Investment Trusts) - these are the best investments since sliced bread. Where else can one get more than a 15% return on their money? And pay minimal taxes? Two REITs that I own are IVR (Invesco) and NLY (Annaly Capital Management). This allows me to use my money and own a portion of commercial real estate.
- Most people investing in their 401K will face increased taxes when it's time to utilize all of this money that has been saved over the years.
- Most people 50+ are not on track to retire and have not saved enough in their 401K
- Adam Smith thought that saving money - similar to how a squirrel stashes away nuts, was ridiculous. Instead, it is better to have nuts (or cash) come to us every day for the rest of our lives.
February 17, 2012
January 29, 2012
Why put your money in a savings account when the government is doing everything in its power to force you to not save but instead invest? By lowering interest rates near zero, QE1, QE2, and secretly implementing QE3 - our Federal Reserve (which is privately owned by other banks) is devaluing the dollar's value.
So, therefore, we have an incentive to invest our money instead of saving it.
Well, if we're going to invest...and we should....it may be smart to put our money into commodities and other tangible assets. With virtually every central bank around the globe creating money out of thin air - eventually there's going to be too much money chasing not enough assets. This creates supply and demand imbalances - which creates opportunities for us who will be ready to take advantage of these opportunities. It might be beneficial to diversify our money into physical silver, gold, agriculture, REITs, and ETFs that invest in a basket of commodities - because these investments will help give us a profitable portfolio in the long-term. Just by investing in REITs alone (which are Real Estate Investment Trusts), I earn close to 15-20% return on my money via dividends. This is a lot better than putting all of my money into a savings or money market account that earns a miniscule 1% or 2%.
These are some of the investments I like and invest in little by little. Eventually, this strategy will help us to preserve our capital and avoid the capital eroding policies created by the government.
January 28, 2012
Things are difficult right now. And it's causing emotional, mental, and physical stress within our families and other relationships.
But amid everything that's going wrong or right in our lives - there remains an incentive to be optimistic about the future:
- Being optimistic will allow one to discover opportunities for wealth creation within their situation
- Optimists have a higher probability of changing their situation from bad to good
- Optimists are generally healthier than pessimists
- It's better to "tough it out" in this economy with friends and family, than it is to go it alone
January 19, 2012
Working in the cube has its perks...but ask yourself :
1. Am I reaching my potential?
2. Is this the same stinking cube I want to see for the next decade of my life?
3. Will I make more than enough money here?
If your answer to these questions is no - then we have to reassess where we are in life and change course. Don't let the cube hold you back from what you want to achieve in life.
Will future generations look back on your life and say, "Grandad (or Grandma ) stayed in a mediocre job working in the cube and didnt take many chances. He/She followed the "safe" path and didn't make enough money for retirement.
Follow your passions. Don't follow the herd because "everyone else" seems to be!