Forgive us this week … a tiny little rant follows … we can’t help it … we’re monetary policy geeks at heart …
There used to be a day, not long ago, when it was smart to pay off your debts and save money.
Those days are gone.
Debt is still bad, and “bad debt” for silly purchases, is still really silly.
But because of the way the money system works these days; good, smart debt has never looked more interesting.
And saving money in the traditional ways has never looked worse.
This isn’t how things are supposed to be, by the way.
Saving money and building up a capital base for yourself or for your business is what grows an economy.
When debt levels get too large, interest rates are supposed to shoot up.
And when they do, it encourages debt repayment and savings.
That’s how things are supposed to work.
Those savings form the foundation for the next economic upswing.
It’s that capital formation that builds new businesses, creates new jobs and ushers in the next round of prosperity.
What do we have today?
We have a financial system that is telling you not to save your money.
It makes debt so cheap that it’s daring you not to borrow more and buy more and buy bigger.
In fact, with today’s policies, it’s actually detrimental to save your money.
Don’t believe us?
Yesterday’s announcement by the one bank that controls the world’s money supply, the U.S. Federal Reserve, was about as clear as can be.
We’ll paraphrase their announcement yesterday like this, “If you save your money and don’t spend it you will be a loser.”
Now, they can’t come out and say it just like that, but by stating they’re keeping rates low until late 2014, that’s what they mean.
What does a “savings account” at the bank pay out these days?
When the price of goods and services goes up more than that every year, you’re actually losing money by saving… are you not?
And don’t get us started about what these policies do to people living on fixed income. Sheesh.
So what’s a responsible person to do?
The choices of either losing money via inflation or investing in “risky market assets” also know as “stocks”. But the stock market is so scary lately that everyone is fleeing to index funds.
We don’t like either of those choices.
And we’re not ones who enjoy following the masses anyway.
Our humble advice?
Get into hard assets.
It’s time to seriously consider getting yourself some land, commodities; darn, even some fine artwork could do the trick.
But definitely, don’t save in dollars.
U.S. ones, Canadian ones, any ones.
Because make no mistake about it, there is a full out battle going on to devalue the U.S. dollar.
And when that happens, all other countries want to devalue their dollars too.
Don’t believe us?
Do you think Canada likes it when the Canadian dollar reaches parity with the U.S. dollar?
It may be good for booking that next Disney vacation, but our export-based economy isn’t a fan of a strong dollar.
And of course, don’t take our word for it, do your own research.
But the fact that the mainstream economists and media can be “shocked” by such an announcement yesterday means you can’t depend on them.
Even little old us, just last week, called out that interest rates would be low FOREVER, and by that, we meant a very long time – not actually forever – we used some creative license there 🙂
How can we be making these calls ahead of mainstream economists?
Shocking, isn’t it?
Most of these mainstream economists either don’t have a clue, or feel they can’t admit that they know the truth.
The current money system is not the one your parents grew up with.
So using the strategies that they taught you, “save your money in safe investments like GIC’s” may very well be the road to ruin.
Find the rich Uncle or long-lost rich Aunt of yours, and ask what he or she is doing with his money.
Read books, attend seminars, invest in your own education.
Watch what the people who are well off are doing with their money.
You have options.
We are obviously fans of income-producing real estate.
But even with that, there are things to be careful of and choices to be made and risks to weigh.
There’s no easy money out there, but it’s possible to be your own bank, your own financial advisor and your own economist.
It’s possible to be self-reliant.
And it’s more important than ever that you are.
None of us were taught this “money stuff” in school, but it’s time for a wake-up call – your future will thank you for your efforts today.
We’re going to be doing a deep dive on this at the upcoming Rock Star Inner Circle Member event on Saturday, February 4 and we couldn’t be more excited about it!
There will be approximately 300+ people at the event in Oakville, Ontario.
We’ll be having new investors share their stories, our Accountant is coming out to discuss real estate tax strategies, we’re giving an Economic Update and we have a special Business Building presentation planned, along with a new inductee to our Rock Star Hall of Fame!
It’s going to be a lot of fun and we have a ton to share! If you’re not an RSIC Member yet and would like to join in on the fun you can either go here or come to learn more at the next complimentary Introductory Training Class by registering here.
Until next time …. Your Life! Your Terms!