10 Essential Principles to Build Your Financial Future in 2021, Part 2

Below are a list of investing principles to consider when approaching your financial plan for 2021.  This episode is paired with E37 (part 1).

1. BIBLICAL NARRATIVE - trade and invest by the Biblical narrative which we nickname "tree, fruit, tree..."  Our investments need to be in a machine or tree that is able to bear fruit which can grow another fruit bearing tree.  This allows us to be in close proximity to the growth and also allows us to be generous monthly instead of after receiving a yearly stock dividend check.
2. CLOSE TO HOME - Bring your investments close to home meaning you can see, feel and touch the value that is being created and also be in relationship with those who are helping you create that value.
3. DIRTY HANDS - Warren Buffet is known for coaching traders to "trade what you know" - in a season where there is little to no transparency in the stock market, we believe it is paramount for seasoned and new investors to get their hands dirty and truly know what it is they are trading.
4. INVEST IN TANGIBLE VALUE - this being value that is easy to see and experience mainly through the barometer of measuring customer sentiment.  If you can see the value and see the customer enjoying the value that has been created for them, then it is an asset worth looking into.
5. REDUCE EQUITY EXPOSURE - better said, STOP putting so much trust in the stock market where there is little to no transparency or understanding of growth and value.  Move your assets to promise based assets or FIXED INCOME ASSETS.  (we described them as "fixed assets" in the audio but they are correctly named, FIXED INCOME ASSETS).  In addition to buying into "products" that are being sold to you, even good fixed income products, please consider investing in or starting a small business and build tangible value for customers in your community.
6. STAGE TO BUY - in this next season of the market, there is a chance that mania will continue and we will see 40,000 on the Dow.  The is an equal chance that we will see mass sell-off and the market will seek equity between 18,000-23,000.  It's a dangerous game to wait this one out - smart investors have already done their work to figure out how to move money with the least amount of penalty to free up cash to buy/create their next cash flow vehicle.  We cannot afford to be late to the party on this point - if we wait, we miss.
7. PROTECTION FOR FAMILY/ ASSETS - wills, trusts and insurances.  Protect your family with term or whole life depending on your long term goals.  Most middle class families in the US have not priced out life insurance nor done the homework to understand what it can do for their spouse and children.
8. MONETARY "INSURANCE" - buying gold and silver can help in hedging your stock portfolio investments against market failure or recession.  Buying gold and silver is not investing - it is hedging.  Historically gold and silver are a reliable store of value so in our mind, when in doubt... do what rich people and governments do.
9. TAX DEFERRED to NON TAX-DEFERRED - Would you rather pay taxes on the seed or the crop?  Well, thats what the government is hoping you don't investigate.  If you leave your $ in tax-deferred vehicles you will pay tax on the full crop that you waited to grow and take distributions from.  Non-tax deferred vehicles allow you to pay the tax once and then never again.  Be sure to consult with a qualified fiduciary for help in determining what is appropriate for your family.
10. LONG TERM to MID-TERM INVESTMENTS - "set it and forget it" to cash-flow vehicles.  The narrative that the market always has ups and downs and will continue to range up doesnt take long term time cycles into account.  Since we see the 100 year cog moving into place we are due for a massive correction in stocks.  So while you may not lose money over the next 30 years, you may lose a significant amount of time - time that is paramount in creating a significant yield curve.

Contact:

PW Gopal - pw.gopal@thebluecollarmoney.com,  pwgopal@pwgopal.com

Mike Hatch - mikehatch@thebluecollarmoney.com

Resources/ Mentions:

Debt Collapse:  20,000 Gold - Mike Maloney

The Fourth Turning

Guide to Investing in Gold & Silver - Mike Maloney

The New Case for Gold - James Rickards

Money & Man:  A Survey of Monetary Experience - Groseclose

Honest Money - Dr. Gary North

The Ascent of Money - Niall Ferguson