Most People Who Followed Traditional Finance Advice Are Now Broke
Disclaimer: I am not a financial advisor. Follow any recommendations at your own risk.
If you look at the world today, the reality you are faced with is probably different from the one you were looking at yesterday, a week ago, and most definitely, 6 months ago.
While we are enduring a period where everything seems to be upside down, it is also a time to throw out our traditional financial beliefs and consider new ways to how money works.
Said Grant Cardone,“When economic conditions change, all of your earlier considerations and actions need to change along with them.”
Here the 3 most simple financial principles I believe will be crucial for thriving in the “new normal:”
1. Move Towards Becoming Economically Self-Reliant“Some people think self-employment is risky, but the real risk lies in deriving your security from an external source” -Chris Guillebeau,The Art of Non-Conformity
If I’d shared that quote even just a year ago, many people would’ve simply laughed in my face. They’d tell me I’m over-exaggerating and need to lighten up.
Unfortunately, Chris Guillebeau’s words are suddenly a reality and most people aren’t ready. We put too much trust in the existing system, and it’s falling apart.
The idea of simply going to school, getting a job, working hard, saving a bit of money, buying a house, and getting out of debt was already broken. However, it’s now a recipe for financial disaster.
To me, the solution is not wishing that everything would go back to how it was before, but rather, creating our own security in this brave new world.
Of course, everyone isn’t going to suddenly become economically self-reliant overnight. What I’m suggesting is for everyone to make it their endgame.
- Time is of abundance. If you’ve been saying that you just need more time to start, then no longer do you have an excuse.
- Human desires haven't changed; how they do it has. What people still want is health, wealth, and happiness. Find a way to get them there, and you’ve got yourself a business.
2. Invest In Inflation Protection Assets“Inflation takes from the ignorant and gives to the well informed.” -Venita VanCaspel
If you look at how much money is being pumped into the global economy, you can’t ignore that there’s a potential dollar collapse or at least hyperinflation looming.
Of course, Robert Kiyosaki has brilliantly compared the economy to a balloon. He says the more air/money you put into it, the bigger it gets, and if you don’t stop, then when it eventually bursts, the results will be catastrophic.
And it is very hard to say we’re not nearing that right now. Therefore, it’s absolutely crucial to not only protect yourself but also be able to profit from a collapse or inflation.
For that, three types of assets immediately come to mind: Gold, Silver, and Cryptocurrency.
What’s most interesting is that bitcoin has actually been the top-performing asset of the year.
It makes sense — as an asset with a limited supply, cryptos and precious metals are only going to become increasingly more valuable as governments continue to print more and more money.
While the dollar is only going to become increasingly more weakened, and in the end, there will be no telling how high these inflation protecting assets will go.
As Jeff Berwick has said,“When the collapse happens, there will be no telling how high bitcoin will rise as people panic and try to salvage some of their wealth…but for the most part, it will be too late.”
3. Invest in a Financial Education“Your level of success will rarely exceed your level of personal development, because success is something you attract by the person you become.” -Jim Rohn
Obviously, your most valuable asset is you. The more you learn, the more you earn.
If there is going to be one surefire investment to generate returns over this period, it will not be buying stocks, gold, or bitcoin, but rather, using this time to better yourself and your knowledge.
Because after all, it is going to be those who make smart and educated moves who thrive through and after this period. Not those who jump on a ‘hot tip’ and randomly bet it all. Said Robert Kiyosaki,
“A bad investor can ruin even the best deal and a good investor can turn around even the worst deal.”
Similarly, Benjamin P. Hardy said, “Ordinary people seek entertainment. Extraordinary people seek education and learning.”
Indeed, your time right now can be used in one of two ways:
- It can be spent in the present; or
- It can be invested in the future
Of course, one is to prioritize distraction and entertainment. While the other is to put first learning and growth. Your choice won’t just determine your momentary feelings. But also, your future success.This article originally appeared here.