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2024 To Be Absolutely Wild: Rates, Real Estate & Global M2

Message from Tom & Nick

Well 2024 is going to be wild.

First, the Buffalo Bills are obviously about to win the Super Bowl.

Next, my Toronto Maple Leafs are going to win the Stanley Cup.

Yes, it's true. This is the year.

Why not?

With a weak D core and basically a revolving door at Goalie ... we're set.

Who needs that when you can score 5,6 or even 7 goals a game right?

That picture is from this Monday's smackdown of San Jose.

Carol and I were at the game enjoying the festivities.

I'm going on the record right here, right now.

If the Leafs win the Stanley Cup this year Rock Star will be hosting some sort of party and everyone is invited. Espresso and Tequila will be served.

There you go. Let's have some fun in 2024!!

Now on to some other fun and wild stuff...

Real Estate should be rather interesting this year.

We all know that income properties are one of the few ways to outpace the debasement of our purchasing power.

But what happens to real estate this year if we actually do get some rate cuts and global liquidity begins to ramp up again?

Take a look at this chat that Raoul Pal shared on Twitter this week:

This is a chart of global liquidity.

Hard asset prices are largely driven by liquidity cycles.

And 2023 sucked out a lot of liquidity with a year full of higher rates.

If we get some rate cuts and that liquidity cycle begins things could get rather interesting.

No one has a crystal ball of course.

But with an election year in play, the Fed signaling rate cuts, and global liquidity at its lower bound ... it would seem to us like a great setup is in play to devalue the dollar (both USD and CAD).

And there's something to keep in mind about that.
If the U.S. does inject some new liquidity (dollars) into its economy via lower rates or mailing out cheques or tax rebates or however ... then Canada is likely to do the same.

In fact, Canada always seems to weaken its dollar more and faster than the U.S. weakens its own.

So things could get downright funky for the Canadian dollar.

Check out this Tweet we shared this week:

It's pretty clear that our Money Supply goes up more than the U.S. money supply.

This is a big part of the reason that everything is "more expensive" here. Our houses, our rents, our food ... everything.

Our dollar just continues to devalue more and more ... faster and faster.

What happens to that chart of Canadian M2 if liquidity INCREASES over the next 12-18 months?

What happens to the prices of hard assets then?

We can't say it enough.

Although it's been a bumpy 12 months to outpace the currency debasement we must try to own as many good hard assets as we can.

You want things that are more scarce than dollars.

You can print more dollars ... you can't print more houses.

(Quick Aside: We're hosting an Introductory Real Estate Investing Class at 7:00 pm tonight!! Nick and I will both be LIVE on Zoom. You can grab a seat and ask us any questions you'd like at the end)

If you're new to us we like a 3 bucket strategy:

Bucket #1: Short-Term Funds for Life
Day-to-day expenses, X number of months of living costs held in fiat dollars.

Bucket #2: Income Producing Assets
To us, this is where smartly leveraged income properties come into play. The leverage allows us to outpace M2 growth (dollar debasement) and the income helps us pay for the debt load we carry on the properties.

Bucket #3: Long Term Savings
It used to be gold for us, today it's Bitcoin. Finite supply, distributed global network, permissionless, censorship-resistant and you can custody it directly yourself. (we're always asked so we'll share, we use Bull Bitcoin to get ours ... you can visit them via RockStarBTC.ca to get $20 free with any new account you set up).

When we were younger we were working on Bucket #2 aggressively at the sacrifice of both #1 and #3.

There was a time in our 20s when Nick was driving an old Honda Civic and we shared my leased Acura if we needed a "fancy car" for any trips with investors, LOL!

I'll never forget ... one week Nick took a new investor out in it and then the next week I did.

The investor commented on how "cute" they thought it was that we both drove the same model of car.

They didn't realize it was the SAME car ... and I was too embarrassed back then to correct them!

Today we're working on those 3 buckets much more evenly.
So as you go through stages of life your focus on these three areas tends to change.

And we'll wrap this week with one of our favorite Jim Rohn quotes. Jim was Tony Robbins' mentor.

“Don’t wish it was easier, wish you were better. Don’t wish for less problems, wish for more skills. Don’t wish for less challenge, wish for more wisdom.”

And remember, first the Bills take home the prize, then the Leafs.

That will make 2024 a banner year for sure!!

Buckle up, 2024 is going to be a fun ride!

See you next week,

Tom & Nick

p.s. Don't forget .... we're hosting an Introductory Real Estate Investing Class at 7:00 pm tonight!! Nick and I will both be LIVE on Zoom. You can grab a seat and ask us any questions you'd like at the end.

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