Choose Your Assets Very Wisely - It's a Tricky New World

Message from Tom & Nick

A bunch of the family went to watch Nick’s oldest daughter, Ella, compete in a horse show over the weekend.

It was so awesome!

Ella did her thing jumping over these wooden bars (can you tell I have no clue what I’m talking about?!) … and we all had a blast cheering her on.

Afterwards we got to hang out in the stable and roam around with the horses.

There was even a little pony that must have been the cutest little animal I’ve seen in a long time.

And with this weather we’ve been having, it was a perfect day for it all.

I can see how you can easily get attached to these horses, they have such beautiful temperaments.

One of our old mentors used to race horses and he explained that although horses are fun to hang out with … over time you can get frustrated with owning them as you watch them literally eat your money away, LOL!!

I guess you have to have a real passion for them to own them!

And speaking of “eating your money” … Canada released its “fiscal update” today in the House of Commons.

If there’s anything that can eat our money faster than horses, it’s our government for sure!

I’m serious.

We keep hearing about how much Canada’s population base is growing and the federal government has increased its immigration target to 500K people per year.

For context, ten years ago, 250K per year was a big immigration year.

So we’ve doubled it.

But there’s rarely any mention of how our tax dollars are going to add hospital beds, increase transportation options or improve our education system.

Where do all of our taxes actually go?

But I digress … back to “eating money”.

Check out this quote from a Financial Times article on Sept 29, 2022 (Source)

“In a memo sent on Wednesday morning, BlackRock told clients using its liability-driven investing strategies that it would freeze “funds more at risk of assets being exhausted” and move the assets to cash.”

I bolded the above two sections for emphasis

This passage was in reference to when the UK bond market was freezing up a few weeks ago and some UK pension funds were getting margin calls.

Let’s dissect this little paragraph because it’s a doozy:

1. Notice this language … “liability-driven investing strategies”.

Sounds strange, right? So these guys and gals are using debt and borrowing to invest funds for a pension?


Do they really need to try and increase their returns for pensioners that much that they are borrowing to try and juice their returns?


2. And then when crap hit the fan a few weeks back Blackrock simply threatened to “move the assets to cash”.

So let us get this straight.

A pension fund and the pensioners themselves may believe they are investing in a REIT or something … a nice “hard asset”.

But if things don’t go well with their investing strategies, they will just be forced to “sell to cash”?

What’s the point of owning good assets if when you need them most you’re just “sold to cash”?

And that’s not the scary part.

During that same week look at the chart of the British Pound measured against the US Dollar…

The British Pound literally collapsed.

What happens if you’re “sold to cash” and your “cash” loses value too?

What then?

Imagine being a British pensioner living out retirement in Spain or in the Caribbean and having your pension “sold to cash” and then that “cash” losing value at the exact time.


So now your assets are sold and the money is worth less than you had planned for.

And if this type of thing can happen in the UK then to us, it would be foolish to assume it can't happen right here in Canada.

Fun times, eh?

And this is the reality of today’s economic situation.

We have lost the plot. Central bankers have run this system very close to its exhaustion.

At this time, it’s our humble opinion that you want to own things that you directly control.

Things like…

  1. Bitcoin
  2. Gold bullion (we’re fans of Bitcoin more than gold but we still own gold)
  3. Good income properties (direct ownership … so the title is in our name or our corporate name … not via a REIT!)

And listen, to each their own here.

This is just our preference. You do your own research and choose your favorite assets.

All of these things have volatility when measured in dollar terms. What is right for myself and Nick may not be right for you.

We’ve said this before and we’ll say it again now:

The quality of your financial future is highly correlated to the quality of the assets you own.

So while everyone is freaking out about interest rates and Fed “pivots” and the stock market and Elon’s $8 Twitter blue check marks … we’re staying laser-focused on protecting our streams of fiat cash flow and turning them into the best possible hard assets we can find for ourselves.

Again, all of this is just our opinion on how to handle your finances.

Do the work, figure this stuff out for yourself.

But if you haven’t started taking this stuff seriously, now is the time to begin.

Don’t wait.

At a moment’s notice these financial companies, pension funds, and governments can literally “eat your money” … selling you to cash and while simultaneously devaluing the cash!

And we’d rather a horse eat our money than any of those entities.

At least the horse has a great temperament and you can ride it too, LOL.

It’s a tricky financial world out there but with continued education and some pretty basic moves we believe each of us can outsmart and outrun the financial elites … and even beat them at their own game.

Good times ahead!

That’s it for this week everyone…

Stay solvent out there!

Tom & Nick

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