Silent Partner Consulting

enabling your cooperative self interest

"Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great." - Mark Twain

Information on SPC and its founders
Introduction to five pages of investment wisdom
Bastiat Free University - the businessman entrance
Rowan - and a message for Garcia
Eight steps to your financial freedom
Americans - vote for any third party

 

One of the steps to freedom is acquiring financial freedom.

( To get to investments skip to 3 now. if you need personal freedom, skip to 6 )

Don't know where to start? Start here. Start now.


There is a tide in the affairs of men
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat;
And we must take the current when it serves,
Or lose the ventures before us.


Shakespeare

 

Investing Your Money

No person cares more about your money than you!

 

8 steps to financial freedom

Rather an ambitious goal, freedom.

All of society is drunk with excess credit. Why should you step away from the punch bowl?

 

That is a good question. Is there a time to expand credit, and a time to contract? When governments, businesses, and most people are looking to loan or borrow more why would anyone seek to escape the crowd?

Why should you?

I'll state just one of many compelling reasons before we look at an eight step plan to escape. Yes, let's escape from this teetering, tottering, house of cards.

The Business Week cover story of August 13th, 1979 proclaimed "Death of Equities." Everyone knew that commodity futures, gold, diamonds, and real things were the only protection from inflation. With the Dow Jones stuck under 900, it could only go lower, even pension funds were deserting stocks for "things." Financial assets were dead. Of course this was close to the bottom for stocks, a top for things.

Twenty-five years later financial assets rule the world. Gold is a called a "barbaric relic," commodities have been a dangerous waste of money for decades. Now however, the tide has turned. Interest rates are artificially low, and due to excess credit inflation has started to grow. Once again things are starting to increase in value as financial (paper) assets flounder. It will be a long ride, with many ups and downs, but in a decade those who are in debt to own paper assets will have lost, oh so much.

I don't know how or when the crowd will realize the tide has gone out and the beach is larger. By then it will be the middle or latter in the new cycle. The crowd's losses will not be recovered until the tide once more is ready to shift, and they will once again re-learn and re-lose through hard lessons.

Your first lesson:

Asset classes rise and fall in long term cycles.

Try to anticipate change and prepare early.

And Now......

 

Eight Steps to Financial Freedom

 

1) Get out of debt

A great place to start. If everyone loves debt, it is probably the wrong time to owe it or own it. Think of the two controls the Federal Reserve has, interest rates and money supply. They are ends of a stick, if one is held steady, the other flops all over the place. Inflation was cured after its last rampage by controlling money supply and letting interest rates float. To counter any recent financial crises the Fed plan has changed, interest rates are being held and money supply is no longer being contained.

With inflation exploding one of two things will happen. The Fed will continue to increase money supply and interest rates will balloon killing the economy. The Fed may instead tighten money, creating deflation, killing the economy. Yes they can continue to pull one of two levers they have to manage this unwieldy money supply machine. There is no direct control, the levers are more sluice boxes directing flows of a huge river while guessing what clouds up stream may mean. They have been lucky to get us into just this small mess, so far. My guess is they will try both levers in turn, first releasing massive amounts of money, then try to mop it up. That would perhaps signal a huge inflation followed by a deflationary depression. Just a guess, no time frame, and only a small idea of what may cause the drought or flood.

If you want to be in control of watering your own vegetable garden, you must cut dependence on upstream political robber barons. Quit trusting them to be benevolent toward you. Quit believing them intelligent enough to control nature. Only what you own without debt is truly yours.

2) Start to save

Pay yourself first.

If you spend all of your money, or more, it is gone. Forget a new car this year, put 10% of your pay into the bank, automatically if possible. Most of us spend it all, it doesn't matter if it's $50 a week or $500,000 a year. Have money taken out before you get the check, then don't touch it until you are ready to invest it.

As a first goal, buy 100 shares in a company other than where you work. It is easier to make money decisions if you are not broke. Owning part of a company is one way to feel confident that you have assets. This is a great time to buy an emerging commodity company "too early," anticipating the next cycle.

Consider a simple home based internet business opportunity for extra cash. Avoid frauds that make huge promises for easily done work. If working from home interests you, visit this guy also. He is honest, and his promises are not too good to be true, he offers solid results for solid work.

3) Invest in what you know

Are you an artist, a doctor, a workman? Consider what you know and trends in your area of knowledge. A bricklayer that invests in diamonds is probably buying cut glass. A bricklayer that sees growth in his area and buys a local gravel pit may find it more valuable than diamonds. When someone calls you about their great opportunity, hang up. Research what you know, and seek out your own opportunity.

Plan your investment, invest your plan. Don't suddenly switch due to a news report or a friend's report of success. If everyone that is excited has bought, who will they sell to? Know well in advance what you plan to do, when the moment arrives, do it. Buy when everyone has sold, sell when everyone has bought.

4) Concentrate your investments in, at most, a few positions

Modern Portfolio Theory suggests 10 or so investments, depending on the size of your bankroll. I've found if I look at 100 investments and pick 10 good ones, my top 3 substantially outperform the next 7. Instead of putting your eggs in lots of baskets, put them in a few. Then watch those few very carefully.

5) Plan and control your own investments

No one cares more about your money than you. You have a huge advantage over professional investors. Professionals get their MBA and dive right into a specialized financial niche. As a private investor you will not be better at analyzing bonds than a bonds pro, or better at trading wheat than a wheat specialist. You can be good at guessing what's next, and learning how to profit in the almost now best sector to invest. If you think metals will take off as China's growth accelerates, you can research iron, gold, and uranium. The bond and wheat trader will still be great at their niche, but that's it. When in a decade or two you decide everyone hates stocks and bonds, you can switch back and by some stocks. If the professional bond trader is still in business, he'll still be great at bonds.

You can be a generalist, you can switch asset classes at will, you can succeed. It is a great advantage.

One big point. Find your own brokers and advisers. If they call you first, hang up. You want someone picked by you for price and quality. If they call you, they want a quick commission, and then it's on to the next sucker. Do your own research, or pick someone after you have researched them. You want to be in charge.

I've only had three advisory services where I was fully comfortable using their input as a starting point in my thought process. One was the Ney Report by Richard Ney, author of several useful books in the 1960s including The Wall Street Jungle.

Mr. Ney is no longer with us; look for his books in a used book store. His insights on the markets are still valuable.

The other two are the Elliott Wave Theorist by Robert Prechter and the International Speculator by Doug Casey. Look at these two, get some of their information. Join club EWI for free and read their articles and get free training, sign up for a risk free trial from Doug Casey.

Many educational programs are free at Elliott Wave International, join Club EWI and take your pick. Here are some current free articles to whet your learning tools:

Check out Doug Casey's publications. You will not regret your time spent with his newsletter or in his (out of print) top selling books.

Remember to think for yourself. Many of these advisor's ideas will be good, and quite a few will be timely; but only a few will be both good and timely for you. Make up your own mind.

No one cares more about your money than you

6) When wealth is achieved, diversify a little more

Wealth is made through concentration, preserved through diversification.

7) Travel and discover the asset protection of overseas diversification

Overseas is a valuable diversification once wealth starts to come you way. Law suits in your homeland usually will not touch overseas property. Most countries have had times when they kept their citizens from removing money from the country. Your home country may hit depression, lose a war, accept a totalitarian government, or break up into smaller parts. It will then be too late to protect your family. Whatever happens, you need a safety net, somewhere outside the disaster area.

8) Establish a second home for personal preservation

Find a new country that your family loves. Maybe it will be where your ancestors came from. Visit often, establish friends and business relationships. Take your family there for vacations. learn the language and local customs. Get a second passport, dual citizenship is legal in most countries. Yes, it will help you appreciate what you have at home. At some point in the future it may also provide a haven for you, your children or your grand children.

Most of the ills in society are created by bloated artificial teams, sometimes called nations. As Bastiat said "The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else." Someone once stated accurately, "the world is composed of two types of people; freemen, and slaves."

Many who think they are free are slaves to their government. They earn their money, but half or more of their income is owned by government in different taxes, fees, fines and takings. You think you own your house, but you pay rent to the government in real estate taxes. If you don't pay; they evict you from "your" house and "sell" it to another that will pay their rent. You start a business, you finance it, you do the work, you take the risk, and your partner- your government, takes it's 50%+ cut in taxes, fines, fees, takings.

It does not have to be this way.

There is a group of successful people, an informal network society know as PT or perpetual travelers. They use legally available planning tools such as the three flag theory to seek a free life. Those I have known are more generous than tax payers, they give by choice where they wish, not by force where power hungry bureaucrats direct. They don't finance wars, they don't buy votes from those made dependent on government handouts, they just help where a positive way exists to meet a need. If you will allow me a trite saying, they teach fishing rather than share a stolen fish to buy a vote.

Do Not, ever, give control of your destiny to another, use many pathways and conduits so if one fails, others survive. Do, always, learn as much as possible. Develop a protective back door to ensure survival if everything turns upside down.

Wherever you live, you can take steps toward freedom. Read our 5 page essay on investment rules , the time tested advice may save as much as it earns. Read good books, research on the net, take classes at Bastiat Free University. Start a business that travels with you, check our recommendations, or find your own.

Do not be more dedicated to your country than your country is dedicated to you. If you are viewed as a cow to be milked, and your children viewed as property to be expended at a whim, perhaps it is time to prepare to jump the fence. Worse times may be ahead, protect what you have created, determine to live your own life.

If you have a brick and mortar business, check into a web based unit. When your business is on a computer, it will move with you. If you want to start an internet business, do it now. Web site creation is inexpensive, fairly simple, and can yield great rewards. Here are some free e-book web courses to assist your starting a profitable internet business. Feel free to share these e-books with others.

You, and those close to you, may all depend on your wisdom.

Start an action plan now, just in case. There may not be time latter.


The state lies in all languages of good and evil; and whatever it says, it lies; and whatever it has, it has stolen. Everything about it is false; it bites with stolen teeth.     Nietzsche

 

Distilled Rules of Finance in our 5 page investment article

 

 

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Silent Partner Consulting
3080 Needles Highway, suite 2700-44
Laughlin, Nevada 89029-1505

 

Invest@silentpc. org (to use remove space before 'org')