Well I would like to say I know something about the future, but truly, I have no idea what the future has in store for any of us.
Really, no mortal can actually predict the future.
But when you see someone who has had a great run at being right on a number of relatively current events … AND … his predictions and especially his recommendations are smart, conservative and low-risk, it pays to at least give a little thought to his predictions Or so Dave opines, any way.
Harry S. Dent’s latest book, “The Great Crash Ahead” is a really interesting read. If you’re not sure who he is, Dent’s the guy who accurately predicted the Asian Financial Crisis in the late 1990s, the property boom in 2003-5, and the Global Financial Crisis (GFC) in 2008 – all about 10 years before they happened!
In The Great Crash Ahead he shows why the GFC is just the start of a major world-wide recession that will see property and share prices drop even further, and unemployment skyrocket as businesses outsource to cheaper economies.
Now I am not an investment advisor and I especially do nor have much expertise in the stock market or other conventional investment vehicles.
But since many of you reading this are very much into investments, and all of you (at least should) be thinking about your life after a job (which is coming, sooner ort later for most of you), I thought it was interesting to look at a couple of Dent’s recommendations. (with Dave’s personal “slant” on them, of course).
So what does Harry;s prognostication and some of his recommendations mean for you?
1. Think in terms of cash flow instead of just investments. Look for things that generate a recurring payment.
Absolutely spot on in my book. The idea of retirement being a time of sitting and clipping bond coupons is dead and gone, in my book. Just recently I heard from a reader who has a non-trivial amount of savings, currently “invested” in some bonds that are paying him … drum roll, please … 2.5%. Wow! What a plan. Folks, the idea of saving yourself rich is gone, in my view.
More important even than the low rates is the fact that many “conventional,conservative, “safe” investment strategies today will leave you at the mercy of banks and even more greedy “financial services” companies that have built the mess we are now in.
“Mortgage Derivatives”, anyone? ‘Nuf said.
2. Start thinking in terms of streams of income
Here’s a rather simple question. But it’s pretty “profoundly simple”, due to the fact that one heck of a lot of you within the sound of my voice can’t answer it correctly.
Suppose you have decided that you need $40,000 a year to live “comfortably” in retirement.
Would it be better to have one stream of income … let’s say a fat IRA account, that is going to give you $40,000 a year?
Or would it be better to have 10 or 12 different income streams, each bringing in at least $4 or $5,000 per year?
Seems to me the answer is simple. The multiple streams will win every time in the long term.
Not to mention the simple fact that it’s infinitely less difficult to start yet another stream that brings in a few thousand a month than it would be to start something from scratch that brings in $40,000 a year.
3. Shares: Be out between early 2012 and late 2013
I’m completely out of this one. I don’t invest in the stock market, and I have no direct information on it.
But my independent web income streams have been increasing 20% per year, right through the GFC. has the stock market done that well?
4. What not to do: buy personal real estate before early 2014
This one is near and dear to my heart. Buying a personal home as an “investment” is pretty bogus advice in today’s world. “They” say that renting always costs more than buying?
Well”they” just are not always right. You might want to read this article and the related ones that it will lead you to: Owning Your Own Home — in the Philippines — Part 5
5. The coming decades will be seen as the age of the individual and the entrepreneur.
If there is nothing else you get from this article, and if there is nothing else Dent says which has any value at all, focus on this. It’s real, it’s valuable, and it’s what you need to know in the 21st century. Doesn’t matter if you are 20 years old or 60 years old, or if you are US or Filipino, or any other ‘flavor’ of person, you have to pay attention to this.
Point One: The 21st century is not the 20th. Having that one stable job, buying that house that will artificially balloon in value and waiting for the pension you have ‘earned’ and the rest of the government handholding (Social Security, Medicare, etc.) is just not going to hack it.
Point Two: You are not who your current job is. In other words, if you are a carpenter and you have been sitting around for 99 weeks of unemployment benefits, waiting on a carpenter job to reach out and ‘find you’, or for “the government” to help you … get over it.
That is last century thinking. It won’t work any more. You can learn to do anything you want … the only real obstacle is you.
Plus you can start right now, today, building your own digital empire in virtually as many different fields as you can imagine.
And, instead of being stuck with “who you are”, you can “be all that you can be”.
What a great time to have an internet business! Do it right, and you have the financial security of knowing that you have money coming in even if you lose your job. Plus, an internet business can easily give you multiple streams of income, as well as recurring income if you structure it properly.
I’ve already given a number of real-world case studies here on your living in the Philippines resource, PhilFAQS, and I’ll be happy to write about more success stories, if you would like me to?
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