Mass consumers of financial news and commentary get fed a steady diet of hope, hype, doom, and gloom.
That’s because fear and greed are the two primary investor emotions.
So anyone selling anything to investors, from media to money management, are working overtime to stoke one or both of those primary emotions.
And if you’re an A-student investor, you’re diligently looking for insight and wisdom to build and protect wealth. As you SHOULD be.
But sometimes your diligence can make you overly vulnerable to sensationalism.
The problem isn’t that reporters and pundits are pointing out problems. That’s their job.
And of course, information and perspectives are necessary inputs for making good decisions. We need them.
And it’s also not terrible that enterprising people develop products, services, and strategies to solve problems … and they’re eager to offer them to you.
We all need solutions.
The REAL challenge is avoiding becoming paralyzed by skepticism, cynicism, or information overload.
“Even if you’re on the right track, you’ll still get run over if you just sit there.”
– Will Rogers
Today, as financial conditions become more extreme and polarized, the noise levels are picking up. It’s easy to just sit down and wait for clarity.
But even normal “safe zones” for triggered investors … like cash in the bank … are suspect. The world isn’t working like it once did.
There’s a good reason an iconic multi-billionaire investor like Ray Dalio is turning to alternative vehicles for wealth preservation in today’s world.
Some might look at any of a number of significant factors as evidence that unsustainable problems mean we’re at the end of the road.
And from their vantage point, they’re 100% correct.
But in a 360 degree view, one vantage point leaves 359 others to consider.
Perhaps Helen Keller (who’s primarily famous for being deaf, dumb, and blind … though she wasn’t a pinball wizard) said it best …
“A bend in the road is not the end of the road …
unless you fail to make the turn.”
It’s a great quote which implies the value of both perspective and adaptability as key components of resilience.
Think about it …
If you put blinders on and see a path or a problem only through one perspective, when things change and the path curves, you can’t see the bend … just the end.
Both the end and the bend are true … depending on your perspective.
There are people who developed a paradigm of financial management in the era of sound money … when currency and money were one and the same.
Back then, paper dollars weren’t money. They were just claims on money … like a check or an IOU. You could redeem them for real money … silver or gold.
We address this in our Future of Money and Wealth video series.
In the era of sound money, savings was valuable and debt was dangerous. So people saved money and avoided debt.
But then the road curved …
The financial system changed. The value of the dollar became unstable with a long-term downward trend.
Inflation was no longer feared … but overtly and aggressively pursued and promoted as something good and necessary.
Debt became and remains both a hedge against inflation and a powerful tool for creating equity. Pro real estate investors make liberal use of it.
Interest paid on savings fell. So savers became losers, as our friend Robert Kiyosaki often points out.
Growing levels of private, public, and global debt was not just encouraged, but NECESSARY to prevent the implosion of the financial system.
And so, the era of perpetual exponential debt and deficits was born. That’s the world we’ve been operating in for nearly 50 years.
Today, it seems the road is about to curve again. Some call it the end of the road. We’re not so sure.
But we agree the odds of a quantum shift happening in the near future are high.
When the 2008 crisis kicked off with a mortgage industry meltdown, we were in the thick of it.
Not only did we operate a mortgage business, but we were launching an online television network for mortgage professionals.
The project was backed by a venture capitalist with no experience in the mortgage business.
When Fannie Mae collapsed, he cancelled the TV project, concluding “there’s not going to be a mortgage industry.”
From his perspective, it was the end of the road.
From our perspective, we believed people would continue to need homes and few would pay cash.
We reasoned that some way, capital would find a way to fund those loans and earn a profit. In fact, we saw big opportunity in private capital.
As for the mortgage pro TV network, we thought our opportunity actually got better … because now an industry in transition would need training, inspiration and news.
The VC saw the end of the road. We saw a bend in the road. We weren’t smarter. Just well-advised with a broader perspective.
That’s because our mortgage TV faculty included some of the smartest people in the mortgage business … so we had access to more perspectives.
So the big question every investor should ask today is whether they have blinders on …
… or if they’ve built a big enough network of smart people with diverse perspectives to help them see the bigger picture.
We know we can’t hit every note in the symphony.
It takes an orchestra full of talented people all playing their perspectives boldly to help us all hear the complexity of the composition.
That’s why free speech and passionate debate are the foundation of a functional society, boardroom, and family.
Ironically, in this internet enabled world, it’s easier than ever before to burrow into an echo-chamber of like-minded thinkers. It’s affirming and fun.
But it’s narrow. And when the curve comes (and it will) and no one in your circle sees it until you’re off the road in a ditch (or worse) …
…that’s when you discover the value of the viewpoints you may have ignored before.
That’s why we recommend you start or join an investor master-mind group … engage in book studies together and discuss current events …
… attend conferences like the New Orleans Investment Conference or our Investor Summit at Sea™, where you can hear from a variety of thought-leaders and experienced investors (even in asset classes and niches you’re not involved in).
Sure, it’s not as easy as sending all your money to a Wall Street enabled “wealth manager” … who have their own blinders on. But it’s arguably safer.
Of course, if you’re reading this, you’re probably not inclined to blindly trust Wall Street anyway. But you also know the majority of people out there do.
And THAT creates a big opportunity for a real estate investor to create a syndication business to offer a new perspective to folks with an over-exposure to Wall Street.
Our point is things are changing … as they always have. And as they do, it creates both chaos and opportunity.
What it does for YOU depends on how you see it … a cliff or a curve … and how well you prepare for it.
We think as the world changes people are going to come home to real assets … and if you’re already there, then you’ll be ahead of the curve.
Until next time … good investing!
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