Are You Gambling With Your Future?
 
My question to you is this. Are you gambling on your future, without even knowing it? 
 
Here are just a few of the concerns that I have.
 
*Congress is not taking the Debt Ceiling seriously enough. They’ve been warned to raise it before July 31, 2017. However, internal documents show that they believe they can wait until Sept. 30, 2017. If they cut it too close, we risk getting a credit downgrade from Fitch Ratings and Moody’s. The last time that the U.S. received a credit downgrade, on August 5, 2011, stocks sank and gold soared.

*The Feds are de-levering. The Smart Money always moves first.

*We are in a Bubble economy. Buy and Forget About It doesn’t work, and hasn’t worked since 1999.

*Wages have stagnated for three decades, while expenses have tripled or quadrupled (or more) in the basics of housing, insurance, transportation and food. Life doesn’t add up.

*The public debt is expected to soar to $30 trillion in the next decade. It’s at $20 trillion currently.

*Housing costs and consumer debt levels are higher than they were before the Great Recession.

*The total debt and loans in the U.S. exceed $66 trillion.

*Social Security went cash negative in 2010 (5 years early). Disability dried up completely in 2016, and is currently borrowing from Social Security. Social Security accounts for 28% of the public debt and is one of the reasons why the debt is ballooning.

*Financial engineering has been keeping stocks artificially high, and making them look like a better buy than they really are. However, the funds for that ruse are becoming more expensive, and reversed the trend starting in 2015.

*”Income-producing” retirement plans designed by broker-salesmen are actually losing money, due to high fees, in an up market! Imagine how poorly these plans will perform in a downturn.

*Financial predators and scams are proliferating and preying on everyone’s fear and anxiety. Worry and doubt are warranted, but require a real cure, not snake oil. These scams include Gold IRAs, Bitcoin clubs and penny pot stocks, most of which are being run out of "offices" with PO Box addresses by people with a history of predatory practices.

*The financial experts predict that the U.S. will have GDP growth of 1.9-2.2% over the next 3 years, while the politicians are basing their plans on 3% growth.

*REITs and annuities pay very high commissions and are being sold like hot cakes without the buyer truly understanding the risks of these products.

 
Yup. That’s right, you just read a dozen concerns. (There are many highlighted links in the list above, where I offer even more details on the issues.) And I could continue, until you passed out from boredom and exasperation. But rather, I’m going to give you the important information about how you can protect yourself. You don’t need to know anything about the above list to protect what you have, adopt a safe plan for your nest egg and even start saving thousands of dollars in your annual budget. It’s The ABCs of Money that we all should have received in high school, and it is easy as a pie chart.
 
I know you have heard phrases like this bantered about by other people, but there is a simple difference. The systems and strategies that I developed in 1999 have a Ph.D. in results. They worked fantastically in two of the worst recessions the U.S. has ever experienced (The Dot Com and The Great Recessions), at a time when almost nothing else has worked. The Easy-as-a-Pie-Chart Nest Egg Strategies and Thrive Budget have proven right on the money, time and again, for two decades now.
 
The last time I wrote a blog with this much alarming language in it was December 23, 2007 – right before the Great Recession. If you heeded that warning (as many did), then you earned gains in the Great Recession. If you did not, chances are that you lost more than half of your nest egg. Over seven million people lost their homes in the Great Recession. Incidentally, I began sounding the alarms on the real estate bubble in April of 2005 – in plenty of time for my readers to have avoided that problem.
 
You know that I am optimistic and a fundamentally happy person. When I turn serious on you, you should take it as a call to action to learn and adopt the systems that you need to protect yourself now. I do not put myself on the line and make claims idly. It may sound like a brash statement, but it is a true and provable one nonetheless. I began talking like this in Christmas of 1999, just a few months before the Dot Com recession, in April of 2005 before the real estate bubble burst and then again in December of 2007, before the Great Recession. No one wanted to hear about it then either.
 
Here is a mental test. Did you lose more than 25% in any or all of those downturns? If so, once again, you might be on the wrong side of a bubble that is ready to burst. The problem is that this time it is even more difficult to get safe because so much of the “safe” investments are now very vulnerable, including bonds, bond funds and money market funds.
 
Investing wisely does not require more time or money. It is simply understanding that you are the boss of your money and that, more often than not, the broker-salesman you are relying on is making a commission to sell you things that might not be in your best interest. You might have been told that you don’t pay them a commission. However that doesn’t mean that they don’t earn a commission from the fund provider.  Buy and forget about it stopped working in 2000 and will not work going forward. Some, but not all, of the biggest dangers right now lie in the areas that have been traditionally known as safe.
 
I will be discussing all of this in a teleconference on August 3, 2017 (Thursday).  You can call into (347) 215-7305 at noon ET (9 am PT), or listen back to the show 24/7 on demand at the link below. If you have questions feel free to email them to Heather now.  
 
http://www.blogtalkradio.com/nataliepace/2017/08/03/risks-in-the-us-economy-and-how-to-protect-yourself
 
July 31, 2017 is the last day to register for my boardroom Investor Educational Retreat at the lowest price. It is also the deadline day for raising the Debt Ceiling to ensure that the U.S. does not receive a credit downgrade. Join me at the October 13-15, 2017 Old West Retreat, and you will learn the easy-as-a-pie chart investing strategy that has worked fantastically through bull and bear markets and will work for you for the rest of your life.  It is as simple as getting the ABCs of money that you should have received in high school.
 
Does it pay off? Retreat attendees earned money during the Great Recession using the Natalie Pace system, while those around them lost half or more of their net worth. My 2009 Company of the Year earned up to 19X gains; my 2013 Company of the Year tripled, while the 2014 Company of the Year quadrupled! Two of the hot funds doubled last year. This is no accident, and it is not rocket science. It is a system that you need to learn in order to protect and grow your assets during the volatile economic times that we face now and in the decades to come, as we try to cycle through an unsustainable debt load.
 
Do you have any idea how much of your nest egg is at risk and how much is safe from a downturn? Did your investments crash in 2008 and 2001? Have you had difficulty getting rich on the software you purchased or the program you signed up for? Are you still underwater on your home? Are you having trouble making ends meet, or contributing to your own retirement plan due to high bills or high debt? If you answer yes to any of these questions, you have a lot to gain by attending my Old West Retreat in October, and a lot to lose if you don’t.
 
If you lost money in 2008 and haven’t made any changes to your plan, if you do not have a clue what holdings you have in your retirement plan, if you have a pattern of chasing or losing money, if you are relying on blind faith (and hope) in someone else to manage your money for you, whether you have $10,000 or $10 million invested in your account, you need to move heaven and earth to be at my retreat this October. Here is why. At the retreat, we will look at what is hot, what is not, and the danger zones that you need to avoid NOW before the retail implosion starts to spread into REITs and the general economy. You will learn how you can carefully (and easily) restructure your nest egg so that you are better protected against a downturn. You will learn sound, higher performing, less risky investment alternatives that could provide you with a great income and are not being offered by other pundits (largely because they can’t make money off of selling them to you). And you will learn which industries could be poised to soar above the rest, no matter what the market conditions are.
 
I have been looking at a lot of purported “income-producing” portfolios, which are actually losing money now (in an up market!) and are extremely vulnerable to severe capital loss in the years ahead. Whether you are a Millennial or a Baby Boomer, there’s no reason to make everyone else rich at your own expense. Wisdom is the cure. A better strategy could deliver as much as ten times the ultimate wealth creation, income and security over your lifetime. It is not more money invested. It is simply getting more performance for the money that you work so hard to earn and invest.
 
I have put together a 3-day process that is extremely unique, powerful and result certain. On Day One, we cover nest egg strategies. On Day 2, you learn what’s safe and how to get safe, including very low risk investments that can earn you thousands or tens of thousands annually with very low capital outlay. On Day 3, I open up my time-proven bag of tricks to teach you what’s hot and how to avoid the money pits. The rich are getting richer in America these days. You can join them because the Smart Get Richer, too.
 
Now I have to stop for a minute and introduce the secret weapon that is going to make this work so well for you, not just in the moment, but now and forever in your everyday life. I’m not handing you a fish, and then forcing you to buy fish from me for the rest of your life. This is a hands-on conference, where I teach you how to fish. You will learn and do and practice, so that you walk out with a plan that works instantly and for the rest of your life. With seven billion people on the planet to protect, I’ll have my work cut out for my entire lifetime, without having to rely on making you dependent upon me. In truth, financial independence requires financial wisdom, and that is what I’m offering you.
 
By the time you leave that room on the third day, you will no longer be the same person. I cannot promise you that you will make a billion dollars, but I can tell you that if you have enough capital in play and you invest with the foundation and strategies we will teach you, it is certainly possible. The one thing I will promise is that these three days will absolutely be the most enriching, the most important and the most valuable three days of your investment life, and that your results will be in direct proportion to the amount of effort you invest in learning and perfecting my strategies. As you can see from the testimonials below, the only thing people ever regret about my retreat is that they didn’t come sooner.
 
Speaking of which, I am not charging the $5,000 or $10,000 that most investment training programs ask. I am not even charging half of that. I am creating a value-priced, valuable retreat where I can work deeply, intimately and personally with my most motivated, serious and ambitious retreat attendees. The information you will receive and experiences and opportunities you will enjoy are quite simply not available anywhere else – not in universities, other seminars or even your brokerage.
 
If this resonates with you, register now by calling 310-430-2397 and speaking with Heather. I am holding a limited amount of rooms at a deliciously low rate for an Old West Inn that is surrounded by natural hot springs and healing waters. Mark your calendar right now and clear it for the dates October 13-15, 2017. The place is Thatcher, Arizona.
 
You need this information now, especially given all of the economic pressures that we are facing. There is no downside to you attending my October retreat, outside of the costs of travel and the modest hotel.
 
You do not want to miss this unique opportunity. You may never get the chance again to save, protect and nurture your nest egg.
 
 

On Wednesday, June 21, 2017, the GDAX (a leading digital asset exchange) experienced a flash crash in its Etherean crypto currency (ETH-USD). The currency dropped from a value of $317.81 to ten cents. Trading was halted, while the GDAX exchange could evaluate what had caused the implosion.
 
So, what happened? The cascade of chaos began as a multi-million dollar sell order. That dropped the price to $224.48, at which point stop-loss orders and margin calls kicked in.

The currency is back trading at $271.89 (down 14.4%) and GDAX has promised to credit any customers who had losses as a result of a stop-loss or margin call (with their own money). This is all according to GDAX VP Adam White, in his blog on the matter.
 
There are many lessons to be learned here.

1. Think Capture Gains, Not Stop Losses.
2. Corrections on all Exchanges Could Be Volatile.
3. Buy Low; Sell High.

 
And here are a few details.

1. Think Capture Gains, Not Stop Losses.
Exchanges don’t have to refund stop losses or margin calls. It’s important to have a good strategy in place that truly puts you in the best seat possible. In a volatile marketplace with wild price swings, stop losses mean you lose frequently. Capture gains would have you winning frequently in that same scenario. In fact, it has been reported that someone had a buy order at 10 cents for ETH-USD, which the GDAX has vowed to honor. That person made $307 for every dime invested. (Hopefully the entire stratagem wasn’t a scam by the multi-million dollar seller.)

2. Future Flash Crashes Are Possible.
All exchanges have a policy toward halting trading for 15 minutes or longer in a single company when there are suspicious circumstances, or when the exchange falls too far too rapidly. (You can search to find the Market Wide Circuit Breaker Policy of each exchange). However, with all of the options and margins alive in the markets today, crashes will still occur – at speeds that are far more rapid than we’ve seen in the past. Multi-million dollar trades do happen. While the market pauses may delay the inevitable and spread it out over a few days (or months), they can't prevent market drops. The Dow Jones Industrial Average fell from a high of over 14,000 in October of 2007, to 6547 on March 9, 2009.

3. Buy Low; Sell High.
It's always tempting to buy high in the hopes of selling higher. However, the surefire market rule is, "Buy low, sell high." Sure, the value of crypto currency might go higher. However, you should be aware that you could have purchased almost every crypto currency for pennies on the dollar just a few years ago.

Stay Legit
Coinbase (and its digital currency exchange GDAX) is one of the few legitimate crypto currency companies. Coinbase is backed by some of the most respected venture capitalists in technology, including Andreessen Horowitz, with a board that includes Kathryn Haun, a former Dept. of Justice prosecutor.
 
Bitcoin and Crypto Currency Scams
Sadly, whenever you have an young, fast-growing business that is posting the kind of gains that crypto currency is posting, it’s like the Wild West, full of Snake Oil salesmen, gunslingers and highway robbery.
 
Trade Coin Club
Joff Paradise and his Trade Coin Club, appears to be a MLM proposition that has bathed in Ponzi perfume. The business will kill you in trading fees (25% of your ups) if it gives you anything back at all. There are multiple red flags with this website and the info-videos, and scathing warnings from former recruiters and customers. “Joff” has a LinkedIn page showing a graveyard of past “businesses.” (Just Google “Joff Paradise complaints” to get 11,300 results.) The recruitment video says that trading on other platforms is difficult, boasting that this club makes it easy with “Stop Loss buttons that allow you not to jeopardize your Bitcoin.” Trading Bitcoin is very easy on GDAX (a far more reputable exchange). Stop loss buttons are a terrible idea in a volatile marketplace. (See above.)
 
BitcoinIRA.com is another website that is rife with red flags. It’s a virtual office with an 800 number, with a website that has broken links when you try to find out who is behind the operation.
 
Bitcoin Buyer Beware! Know the executives and board members behind the operation before getting involved. If you're going to travel to the Wild West, make sure that you haven't selected a pistol-packing Ponzi clown as your tour guide. Bitcoin scams are becoming as widely spread as the Nigerian email scams were at the beginning of the Internet.
 
Early Adopters May Want to Take Quick Profits
Most investors want an exit strategy within three years of their investment. Traders who are sitting on millions from their small, early investment are going to be itching to turn their paper profits into real cash (and then probably a Tesla) – even if they are crypto-currency philes. It’s never a good idea to buy high. Whenever you see a quick spike, as there has been in both Bitcoin and Etherean, you have to be very cautious about catching a falling knife, when the sellers back up the truck to turn multi millions of crypto into USD. -- as happened on June 21, 2017 with Etherean.

Disruptive Technology vs. a Trillion Dollar, Global Industry
Bitcoin feels a lot like VOIP and video conferencing, ala Skype 2002. It’s a disruptive technology taking on an entrenched trillion dollar, global industry. Many of us would love to circumvent the banks altogether (particularly after their shenanigans that resulted in the meltdown of the Great Recession). However, the truth is that it is difficult to topple a trillion dollar, global industry. Skype didn’t wipe out telecom, and it’s hard to imagine Bitcoin wiping out banks. The technology will revolutionize the industry, however – something the financial industry is already moving to embrace and to regulate.
 
FINRA (the Financial Industry Regulatory Authority) is hosting a Blockchain Symposium in New York City this July.

If you purchased Bitcoin or Etherean two years ago on a respected exchange, like GDAX, then you are the most eligible bachelor/bachelorette in your city. If you're been sold into paradise recently on any other platform, you'd better make sure you aren't kissing a frog, hoping he'll make you a princely sum.
 

Creating a Community.
 
Partnerships are key to success! The Golden Gate Bridge wasn’t built by one person. The more you can partner with like-minded people, the more big problems you can solve. Partnerships can help you to commit to an exercise regimen, to study, to invest and to do almost anything you want to do.
 
The key is getting the right kind of support. For instance, your workout buddy might be a great, fun way to keep regular with your routine. However, s/he is probably not the best person to design your routine. For that, you want someone who is well-schooled in diet and exercise regimens, and who knows how to keep you from hurting yourself. It’s very common for people to pray and meditate individually, and come together each Sabbath to study the scriptures for guidance on how to live a more divine life.

Getting wisdom from a qualified source (not just your friends) is key to success. You don't want to get your spiritual practice from Jim Jones, your diet tips from an anorexic model or your financial wisdom from a salesman. Grade your guru before you listen to anything they say. Make sure that they have a Ph.D. in success that spans at least a decade. The most common way that people lose money is by trusting blindly, without verifying, in a friend, family member or commission-based salesman.
 
I want to encourage all of us to learn more about financial literacy, and to form partnerships that help us to take our learning and actions deeper. Our team offers the time-proven systems and solutions that can support you and your community to make sure that you are drinking your #finlit from the well of wisdom (instead of from sales-speak). The more you drink in and apply what works, the better your results will be. Your community can then help you to be disciplined about applying what you learn, and even in forming partnerships that might take on larger projects that you couldn’t handle on your own.  
 
Please see below for ways that we can support your continued learning up the path to financial empowerment and wisdom. Also, we are here to help, particularly when you have a hot tip/idea, or are concerned about a popular video or email that is circulating. Some of the hottest companies that I’ve featured came in as a hot tip from our community, as have some of our most valuable investor alerts.
 
Community Resources
*21-day coaching program.
*Free teleconferences, blogs and online community. 
*Private, prosperity coaching
*Retreats
*Master Classes
 
And here is more information on each resource.
 
*21-day coaching program.
The Gratitude Game was originally designed as a 21-day coaching series for retreat attendees to do after they attended a retreat, in order to make sure that they were remembering and implementing all of the wisdom and strategies that they had learned. We recommend this book in the audio format, using The ABCs of Money and Put Your Money Where Your Heart Is as textbooks.

*Free teleconferences, blogs and online community. 
You can join me in a monthly teleconference, in my money blogs and access daily money tips. I frequently post links to relevant videos and articles on my Twitter and Facebook pages, and always post when a new blog is up or a teleconference is scheduled. Check out the links below for each page that you should consider following and visiting on a regular basis. If you have a suggestion, hot tip, investor alert or a question for the monthly teleconference, please tag me with it on Twitter or Facebook, or email Heather @ NataliePace.com.
 
Feel free to start your own conversations and share Stock Report Cards on our Facebook.com page.
 
Monthly Teleconferences: http://www.BlogTalkRadio.com/NataliePace
Money, Personal Finance, Investor Alerts and Hot Stocks Blogs: http://NataliePace.com/Blog
Sustainability Blog: https://Medium.com/@NataliePace/
Twitter: https://Twitter.com/NataliePace
Facebook: https://www.Facebook.com/TheABCsofMoney
Instagram: https://www.Instagram.com/NatalieWynnePace/
 
*Private, prosperity coaching
This is your chance to make sure that you understand how our time-proven systems in budgeting and investing can apply to your own personal situation. Private prosperity coaching packages can be a great, affordable way to get your life on track. We recommend that you attend a retreat and learn the basics first, so that the private coaching can be more effective. Call 310-430-2397, if you’re interested in learning more.
 
*Retreats
Our 3-day Investor Educational Retreats offer the ABCs of Money that we all should have received in high school, taught by a No. 1 stock picker. You can find additional information about the next retreat on the home page at http://www.NataliePace.com/. The next retreat will be Oct. 13-15, 2017 in Southeastern Arizona – our Old West Financial Empowerment and Healing Retreat. This is our most affordable retreat. Receive the best price if you register by July 31, 2017. Receive a complimentary private, prosperity coaching session (value $300), when you register by June 30, 2017.
 
*Master Classes
Wonder what news I read? How I know what is happening before it hits the headlines? How I am able to identify great companies before they get a Buy rating from the analysts? Learn my tricks, so that you can match my results. If you wait for the headlines, it’s too late to act and to protect yourself. The Master Class is available to volunteers and repeat retreat attendees only.
 
Recent Blogs To Check Out
Will Congress Raise the Debt Ceiling in Time?

The Debt Ceiling Must Be Raised By August.

The SnapChat IPO

Penny Pot Stocks

Will Congress Raise the Debt Ceiling Before the Summer Recess? How will this affect the U.S. economy, and your income and nest egg?
 
 
The House Freedom Caucus will not approve a clean debt ceiling, according to their press release, issued on May 24, 2017. Here are the demands of the Freedom Caucus, which is chaired by Representative Mark Meadows (R: North Carolina).
 
We oppose any clean raising of the debt ceiling, we call for the debt ceiling to be addressed by Congress prior to the August Recess, and we demand that any increase of the debt ceiling be paired with policy that addresses Washington’s unsustainable spending by cutting where necessary, capping where able, and working to balance in the near future.
 
This puts the far right in opposition to Democrats, who have called for a clean debt ceiling bill. Treasury Secretary Mnuchin requested for politics to be put aside for now to get the Debt Ceiling passed before Congress breaks for summer. Twice Secretary Mnuchin was pressed to support a clean Debt Ceiling bill, and twice he iterated that was his preference.
 
However, the White House economic team, headed by Gary Cohn and Mick Mulvaney, wants the Debt Ceiling to be accompanied by a debt reduction and spending reform plan. National Economic Council director Cohn and White House budget director Mulvaney, who founded the Freedom Caucus, have both spoken in interviews this past week assuring Americans (and the world) that the Debt Ceiling will get passed and that there will be no default on payments. However, Mulvaney has also made it clear that The White House Administration would “like to see things attached to it that drive certain spending reforms and debt reforms in the future.”
 
Paul Ryan has little choice, but to go along with the Freedom Caucus. Without their member votes, he will be unable to get the Debt Ceiling raised, unless he writes a bill that caters to the Democrats. Speaker John Boehner went around the Freedom Caucus, and used Democratic support to raise the Debt Ceiling in October of 2015. It cost Speaker Boehner his job. Speaker Ryan could conceivably craft a bill that would get all of the Democrats and a small number of Republicans on his side to get it passed. However, the key number here might not be the roll call. It’s more likely to be Ryan’s age. Speaker John Boehner was 65 when he committed political suicide – a time when he was ready to retire. Speaker Paul Ryan is only 47 years old. Speaker Ryan has been in office since 1999 – for almost two decades. It’s hard to imagine him doing something that would cost him his job.
 
The Debt Ceiling bill is bound to include concessions that the Democrats will find it tough to swallow. However, there is another massive problem. All of this must be done before Congress breaks for summer. If they get too close to the X date – the date when we run out of money to pay our bills – then the U.S. risks a credit downgrade from both Fitch and Moody’s. The Debt Ceiling was hit on March 15, 2017. Secretary Mnuchin has been using extraordinary means to pay bills since then, but warned that tax receipts were weaker than anticipated. This put X date before the Summer Break, rather than fall.
 
In August of 2011, when the U.S. credit was downgraded by Standard and Poor’s after coming too close to the X date, gold soared to its all-time high and stocks sank. Stocks did ultimately recover. However, that was the third year in the bull market cycle, and Moody’s and Fitch Ratings did not downgrade the U.S. credit from its AAA rating. 2017 is entering the 9th year of the bull market – a milestone that is very difficult to achieve. The last two times the economy went 8 years without a correction, the losses were catastrophic. The Dow Jones Industrial Average lost 55% in the Great Recession and the NASDAQ Composite Index lost 78% in the Dot Com Recession (and took 15 years to recover).
 
A political log jam will cause a flood of distress in the world economic system and a downgrade to the U.S. credit by both Moody's and Fitch Ratings. The Powers that Be, both sides of the aisle, understand this. However, the sheer weight of the debt might drown the debate more than investors, and the politicians, are expecting.
 
One thing is for sure. Protecting what you have is your most important job in 2017, just as it was in 2008 and 2000. That is why I’ve scheduled my Florida Financial Empowerment Retreat for Jun 10-12, 2017 – in plenty of time to get safe before the Debt Ceiling starts dominating the headlines. If you wait until the headlines heat up, it will be too late to protect yourself. Those people who used my Easy-as-a-Pie-Chart Nest Egg Strategies earned gains in the last two recessions, and have outperformed the bull markets in between. These strategies also save thousands in your annual budget! Meaning you can live a richer life today, provide far better for tomorrow and enjoy more bucket list vacations. If you’re employing Buy and Hold, then you are riding the Wall Street rollercoaster, and are as vulnerable today as you were in 2000 and 2008. Call 310-430-2397 to get started on your Debt Ceiling-proof asset protection plan now.
 
FYI: I first warned that this Debt Ceiling crisis could be problematic, and that the U.S. AAA credit rating was at risk, on March 16, 2017. Click to view that blog. Check out other important updates regularly at http://www.nataliepace.com/blog.

Debt Ceiling Must Be Raised By August
 
On May 24, 2017, Treasury Secretary Mnuchin warned the House Ways & Means Committee that the Debt Ceiling must be raised by August, before Congress goes on Summer Break. What does this mean to you, your investments and your future?
 
5 Things the Powers That Be Aren’t Telling You About Our Economy

1. Congress Needs to Raise the Debt Ceiling by August, Before the Summer Break.
2. Social Security has been cash negative since 2010, and is predicted to run dry in 17 years.
3. GDP Growth is Predicted to Be 2.2%, not 3%.
4. The Current Administration’s Tax Cuts Help (A Little) in the Short Term, and Hurt in the Medium and Long Term.
5. Cash is not the safest investment in today’s Debt World, though it is better than bonds and money market funds.

 
Here are the details, and how these issues affect you now and in the years to come.

1. Congress must raise the Debt Ceiling by August, Before the Summer Break. May 24, 2017, just a few days before Memorial Day, Treasury Secretary Steven Mnuchin testified before the House Ways and Means Committee. At least two different times, he emphasized that the Debt Ceiling should be raised before Congress leaves for the summer break. He said, “It is absolutely important that this is passed before the August recess. As far as I’m concerned, the sooner, the better.” The same day, White House Budget Director Mick Mulvaney told the House Budget Committee that “The [tax] receipts are coming in slower than expected.”

What does this mean for you? Not a whole lot in the near term, if Congress raises the Debt Ceiling in June. If the process is drawn out or gets to close to X date (the date when the Treasury Department can’t make payments to Treasury Bill holders, government employees and/or Social Security recipients), then the U.S. risks a credit downgrade from both Fitch and Moody’s. If that happens, it could be a serious problem, with pandemic economic consequences, beginning as early as August.

Other world currencies are gaining strength on the IMF Currency Composition of Foreign Exchange Reserves. The Chinese renminbi was added to the SDR basket of currencies in 2016. The Australian and Canadian dollars are increasing as global FOREX reserve holdings. The U.S. dollar currently makes up 46.8% of the total FOREX reserves (according to the IMF). (The IMF data grossly misrepresents the power of the Chinese renminbi, and the trade exchanges that are going on between Russia and China directly, in their own currencies.) As the U.S. debt continues to balloon, this will continue to force pressure on the buying power of the dollar. Basic supply and demand tells you that a weaker dollar translates into more dollars needed to purchase the same thing. That would put even more pressure on the debt, which will start experiencing larger interest payments in the years to come (no matter what). Switching from the dominance of the U.S. dollar to a basket of world currency is happening incrementally. The Powers That Be are trying to prevent it from becoming a snow ball.
 
The Bottom Line: Cash, though safer than bonds and Money Market Funds, is losing buying power. Safe, income-producing hard assets that you purchase for a good price are a better idea. That’s why we spend a full day on this topic at the Investor Educational Retreat. (Call 310-430-2397 or email Heather @ NataliePace.com to learn more.)

2. Social Security has been cash negative since 2010, and is predicted to run dry in 2034 (in 17 years). Disability Insurance is borrowing from Social Security because it dried up in 2016. $5.5 trillion of the current $20 trillion in debt is social security debt (and climbing). What is a little distressing about these facts is that they are not part of the public debate. In fact, Representative Kevin Brady, the Republican chairman of the House Ways and Means Committee, noted that Medicare and Social Security are the biggest drivers of our debt, yet were absent from Treasury Secretary Mnuchin’s statement dated May 24, 2017, as was any mention of the urgency of raising the Debt Ceiling as soon as possible.

3. GDP Growth is Predicted to Be 2.1-2.3% in 2017 and 2.1-2.6% in 2018, not 3%. Most predictions have the growth under 2% in the years thereafter. (No one ever predicts a recession, until after it has happened.) Meanwhile, The White House Administration and Treasury Department are using 3% GDP growth as rationale for making their tax cuts work. Here’s what Fitch Ratings’ Charles Seville had to say about this (in an email to the press dated May 24, 2017), “The President’s Budget’s proposal to eliminate the federal deficit and reduce the debt/GDP ratio over 10 years rest on an optimistic long-run growth assumption of 3%, which is unlikely to be realized given slowing growth in the labor force.” Mr. Seville is senior director and lead analyst on the U.S. sovereign rating.
 
The GDP growth in the 1st quarter of 2017 was 1.2%. The prediction for the 2nd quarter is currently 3.8%! (Woo hoo! If those predictions hold true.) We will get new projections from the Federal Reserve Board on June 14, 2017, when they have their next meeting.
 
We all want a robust economy, strong jobs and less taxes. The basis of a strong economy is innovation and inventing/building the products of tomorrow that the world can’t live without.

4. The Current Administration’s Tax Cuts Help (A Little) in the Short Term, but are predicted to hurt in the Medium and Long Term. And they aren’t expected to get us to 3% GDP growth. Who doesn’t like lower taxes? People and companies all benefit. The problem is that with $20 trillion in debt, when the government cuts its income (with the tax breaks), it can’t pay off its debt. More military spending also equates with more disability and medical claims from young men. Up to 35% of Iraq/Afghanistan Veterans suffer from PTSD, and over one million veterans from those wars were injured. (The VA stopped publishing data on injured veterans in 2013.) The disability insurance went broke in 2016, and is borrowing from Social Security. Tax cuts mean even more borrowing to try and make ends meet – a recipe for disaster. When cutting taxes and increasing military spending is prioritized at the expense of education and investments that fuel desirable, new industries, then GDP growth is held back by the inability to pay what we already owe and increased social and financing costs.

5. Cash is not the safest investment in today’s Debt World, though it is better than bonds and money market funds.
Bonds have lost money over the last decade and are vulnerable in the years to come. Credit risk (bankruptcies and restructurings, ala Detroit, Puerto Rico and the retail stores going belly-up) and interest rate risk are both concerns. Money market funds now have redemption gates and liquidity fees. When currency moves happen, cash can lose buying power overnight. We saw this in the fall of the euro and the British pound in the wake of BREXIT, when both currencies lost 15% or more overnight after the vote.

So, what’s safe? Safe, income-producing hard assets that you purchase for a good price. Every word in that sentence is key, particularly now when real estate is higher than it was in 2007, before the Great Recession. Fortunately, our team has identified some great investments that meet these criteria. The annual savings for most people is in the thousands, and for many can add up to tens of thousands in annual cost benefits. That’s the best ROI in today’s world, and also the lowest risk!
 
In short, if you’re getting your news from the mainstream media and your budgeting and investing strategy from salesmen and debt collectors, you’re as vulnerable today as you were in 2007. In the Great Recession, stocks lost 55%, 7 million Americans lost their homes and most of the banks, brokerages and insurance companies were bailed out.
 
Wisdom is the cure. Call 310-430-2397 to get access to budgeting and investing strategies that have worked since 1999 – earning gains in both of the last two (devastating) recessions and outperforming the bull markets in between. If you want to be sure to implement these strategies before August, then attend the June 10-12, 2017 Financial Empowerment Retreat in Cocoa Beach, Florida.
 
About Natalie Pace
Natalie Wynne Pace is the co-creator of the Earth Gratitude project and the author of the Amazon bestsellers The Gratitude Game, The ABCs of Money and Put Your Money Where Your Heart Is (aka You Vs. Wall Street). She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical).

 
 

​5 Distressing Facts You Probably Don’t Know About Social Security
 
1.  Cash Negative: Social Security went cash negative in 2010, five years earlier than anticipated, according to the Brookings Institute.
 
2.  A Big Percentage of the Federal Debt: Social Security adds to the federal debt every year. The current amount of debt that is attributable to “Intragovernment Holdings” (the name given to various federal accounts, including the social security trust fund) is $5.5 trillion and growing. The total U.S. public debt is $19.8 trillion (as of 5.26.17). The social security trusts (and a few other accounts) add up to 27.8% of the debt.
 
3.   Tax Cuts and GDP Growth Are Unlikely to Fix It: According to Fitch Ratings (in a press release in 2016), “The most immediate fiscal challenge is to restore the social security system - largely unaddressed by 2016 budget proposals - to a more sustainable state.” On May 25, 2017, Charles Seville, Fitch Ratings senior director and lead analyst on the US sovereign rating, wrote that “The President’s Budget’s proposal to eliminate the federal deficit and reduce the debt/GDP ratio over 10 years rest on an optimistic long-run growth assumption of 3%, which is unlikely to be realized.” Tax cuts are unlikely to generate a lasting and substantial boost to growth, in Fitch's view.
 
4. The Disability Fund Dried Up in 2016 and is Borrowing from Social Security. The Disability Insurance Fund has been borrowing from the Old Age and Survivors Insurance (OASI) Trust Fund since 2016 – just before the DI Fund was depleted (source: Social Security Administration). The DI Fund is predicted to be drained dry in 2022 (in just 5 years), if no changes are made.
 
5. Tapped Out in 17 Years. The Social Security Funds are predicted to be depleted by 2034, unless measures are taken to shore the funds up. The last time this was about to happen, in 1983, Congress saved the day with measures that are not predicted to work as well this time. This also assumes that the fund depletion doesn’t move faster than predicted, as happened when the Social Security system went cash negative in 2010.
 
With one bonus, Social Security Note.
 
Should You Wait Until Age 70 to Retire?
It’s easy to see why the government website and many mainstream media outlets encourage people to wait until 70 to retire, under the rationale that waiting offers you a larger annual stipend. Waiting to retire helps the system stay afloat. However, if you do the math, then you realize it takes 12-20 years to make up the amount you forego when you wait that long. (If you wait until 67 to retire, instead of age 62, you could be giving up $100,000. If you wait until age 70, you could be passing up over $200,000.) If you’re an active income-earner, it won’t add up to retire early, when you could earn your full salary instead. However, if you’re out of work, the early retirement could be a Godsend.
 
Incidentally, the Brookings Institute reminds us that public pensions went cash negative over 25 years ago, in 1985. (2003 was one year when distributions were less than contributions, however, the majority of the time has been in the red.)
 
The bottom line is that if you’re counting on getting a fat check from your company or the government in retirement (or disability), your expectations are likely to hit a reality check in the years to come. Many pensioners, particularly those in the auto manufacturing and airlines industries, have already learned this the hard way – having received a big cut in the pension, health care and other post employment benefits that they were promised, but are not receiving. Private pension promises are rewritten and cut in bankruptcy proceedings. Politicians are having a hard time announcing reform to the public pension system, which is one of the big reasons why the U.S. debt is increasing each year.
 
The bankruptcies in the private system remind us that borrowing from Peter to pay Paul always has an expiration date. Let’s hope we can all come together to resolve the problems before that happens. Until then, it’s a good idea to have a Plan B for your retirement future. There are many ways that you can do a better job of providing for your future, while living a richer life today, by shoring up your assets, and making smarter choices in your energy, budget and savings expenses and strategy. Call 310-430-2397 to learn more about Natalie Pace’s:

1. Easy-as-a-pie-chart nest egg strategy that earns money while you sleep, while protecting you from downturns and,
2. The Thrive Budget, which saves thousands every year in your annual budget with smarter choices, which allows you to live a richer life today, provide far better for tomorrow and enjoy more bucket list vacations to boot! 

Until you get this information, chances are that you are making the taxman, the insurance salesman, the gas station, the utility company, the banks and other billionaires rich at your own expense. 
 

Financial Engineering.
Good math goes a long way in today’s world. It has been fueling the rise in the stock market, and it is also helping to make ends meet for the U.S. Federal Government. For instance, if you wait to retire until you are 67, the Social Security Administration will give you XYZ benefit level, and even more if you wait to 70. On the face of it, waiting looks like a good idea. However, if you do the math, you’ll realize that it will take you 20 years to make up the losses of waiting until you’re 67 to retire – longer than most people live. (Something that is never mentioned in the glossy brochure or blog.) That’s great for the U.S. (and “us”), but not so good for you individually, particularly if you are 62 and out of work.
 
And that’s the issue with stocks, too. The boom/bust economy that we’ve been embroiled in during this new Millennium can be great in the short term, but costs everyone dearly in the correction (which has been happening in an 8-year cycle since 2000). In 2000, Dot Com companies were given the cheap, easy money, resulting in a 78% correction in the NASDAQ Composite Index that took 15 years to recover from. Prior to the Great Recession, money flowed into liar loans, subprime and real estate, costing the Dow Jones Industrial Average a drop of 55%. The American taxpayer had to bail out the banks, insurance companies and brokerages, and over seven million people lost their homes. 5.4 million homes are still seriously underwater and the debt in the developed world has become astronomical (at $20 trillion in U.S. public debt and over $65 trillion in U.S. total debt and loans). This hits Main Street the hardest, since the “smart money” always moves out first.

 
So, where is the cheap, easy money flowing these days? Who is benefiting, and what will be the ultimate cost? The short answer is that corporations are getting the bulk of the money. They are buying back their own stock, which pushes up the stock market. Just as Internet companies couldn’t get to cash break even in 2000 (despite an inflow of investment money), many legacy companies are suffering from sluggish sales and drowning in debt, pensions and other post employment benefits – something that borrowing money doesn’t correct. Large corporations have been borrowing money very cheaply and using it to push up the value of their own stock, rather than investing in new products, people or productivity. Here’s how the financial engineering works.
 
Corporate Buybacks Look Great on Paper Because…
 
The Share Price Stays High
Earnings Look Higher Than They Are
Price to Earnings Ratio Looks like a Bargain
 
However, what is really happening is that …
 
Share Price Stays High
The share price is staying high because the company’s own buying makes it look like the stock is popular.
 
Earnings Look Higher Than they Are
Many companies buy back their own stock in order to make their quarterly earnings look good. How does this work? When you reduce the number of shares (as happens when corporations buy shares and take them out of circulation), the earnings per share goes up, even if the revenue (sales) is actually flat or even lower than it was a year ago.

Price to Earnings Ratio Looks like a Bargain
The Price to Earnings Ratio also looks more attractive when the share count is reduced. Investors think that the stock is on sale, and might be tempted to buy at what they perceive is a bargain price.  

According to Howard Silverblatt, the senior index analyst for S&P Dow Jones Indices, corporate buybacks have boosted EPS by 20% over the last 4 years.
 
The Smart Money Exits Quietly, First
Corporate buybacks were down in 2016 and 2015, from the highs set in 2014 (which were on par with the highs set in 2007, before the Great Recession). The last two consecutive declines in buybacks occurred in 2008 and 2009 (when the Dow Jones Industrial Average dropped to a low of 6547).
 
In spring of 2005 (two years before the subprime crisis), home builder CEOs were selling hundreds of millions of their company stock, including Angelo Mozillo at Countrywide, the Toll Brothers and the KB Home CEO.  Over the last year, Apple insiders have taken profits on over $610 million in stock. Microsoft executives and directors have cashed out over $4.5 billion. Jeff Bezos (the CEO of Amazon) has sold over $1.7 billion of Amazon stock.
 
The First Signs of Distress: Retail Bankruptcies
The retail bankruptcies of the last few years have shocked consumers, but haven’t weighed on the stock markets – yet. Retailers continue to be at risk, with the threat of bankruptcy in the next 12-24 months looming for Sears Holding Company, Claire’s Stores, True Religion Apparel, 99 Cents Only Stores, Nebraska Book Company (for the 2nd time in five years), Nine West Holdings and Rue21 (source: Fitch Ratings). Payless declared bankruptcy on April 4, 2017. The loss of income for mall REITs can’t be good. Publicly traded mall REITs are heavily indebted, with Taubman Centers Inc. carrying a debt to equity ratio of 51 (source: Money.MSN.com).
 
No One Ever Predicts a Recession
In 2007, even as mortgage banks were going out of business in droves and the auto manufacturers were hanging on with backdoor borrowing from the U.S. Treasury, Treasury Secretary Henry Paulsen was still reassuring investors that the subprime mess wouldn’t affect the overall economy (source: Bloomberg, July 26, 2007). GDP growth predictions for 2009 were still 2-3% growth in June of 2008, even though Bear Stearns had already collapsed and Lehman Brothers, Washington Mutual, Merrill Lynch, AIG and many of the largest U.S. banks, insurance companies and brokerages were teetering on the edge of bankruptcy and negotiating behind closed doors for emergency capital to save their assets. Even after the bailouts, the October 2008 economic projections were still touting GDP growth. It wasn’t until January 28, 2009, just a month and a half before the bottom of the Great Recession, that the GDP growth predictions finally reflected negative growth. If you wait for the headlines that we’re in a recession, it’s too late to protect yourself.
 
What’s Really Going On Behind the Scenes
The basic analysis of what is really going on behind the scenes today is that everyone in most of the developed world (with rare exceptions), including governments, corporations and individuals, are borrowing from Peter to pay Paul. According to the Urban Institute, 1/3 of Americans with a credit score are in debt collections. It doesn’t take any amount of data to know that most of the people you know are struggling financially, buying less of everything, taking fewer vacations and being forced to come up with creative solutions for housing.
 
Financial engineering (fuzzy math) only takes things so far. When the correction occurs, there isn’t a warning. In fact, there is always a lot of high-level rhetoric reassuring everyone, while behind the scenes the smart money is cashing in as much as they can as fast as they can.
 
And that is why I’m encouraging everyone to make sure that you are safe and protected now. If you lost more than half in the Great Recession, and you haven’t made any changes to your strategy, you are as vulnerable today as you were then. The safe side of your portfolio is even more vulnerable. There are safe, easy, time-efficient, time-proven strategies that earned gains in the last two recessions, outperformed the bull markets in between and are easy-as-a-pie-chart. You can also save thousands of dollars every year with smarter energy, budgeting and investing choices (without a loss of life style), when you stop making the billionaires rich at your own expense. Wisdom is the cure.
 
Call 310-430-2397, or email info @ NataliePace.com to learn more. Join me on my teleconference this Thursday at 9 am PT (noon ET) for an interactive conversation on financial engineering, where I am happy to answer your questions. If you want to protect your assets before summer (and frolic in the warm Atlantic with new friends), then join me at my June 10-12, 2017 Oceanfront Florida Financial Empowerment Retreat. Only a few seats remain available.
 

Should You Sell in May and Go Away?
 
As we enter the 9th year of the current bull market (something akin to unicorns, historically), it’s definitely time to ask ourselves, “Should I sell in May and go away on holiday?” Is this the time to take profits, count  blessings, get a little defensive and take an epic vacation? Below are a few considerations.

1. Market Timing Doesn’t Work.
2. How Do the Markets Perform Under First Time Presidents?
3. How’s the Economy Doing These Days?
4. What Positive or Negative Events Are on the Horizon?
5. What’s Fueling the Bull Market?
6. What Other Opportunities Exist for Investors?
7. What’s at Stake?

 
And here are details on each of these considerations.

1. Market Timing Doesn’t Work.

Sadly, our systems are programmed to buy high and sell low, which is why market timing rarely works. Most people want to jump into the markets when they’ve seen a lot of gains (buying high) and slink away when they’ve been burned (selling low). Buy and hold doesn’t work either because the last two recessions have looked more like depressions – where investors have lost more than half of their retirement. It takes 8 years (or more) to come back to even when you lose half, meaning that most investors are only now back to where they were in 2008 or 2000. What does work? Diversifying, avoiding the bailouts, adding in hot industries, knowing what’s safe (bonds, annuities, insurance and money market funds are vulnerable) and annual rebalancing. If you want to learn these time-proven strategies, read my books, and attend my Investor Educational Retreats to learn the ABCs of Money that we all should have received in high school. It’s easier than algebra.

      2. How Do the Markets Perform May-October Under First Time Presidents?
As you can see from the chart below, the performance is more affected by the business cycle, than it is by the President. President George W. Bush had a terrible time his first year. However, he inherited an economy that was ripe for a recession. The U.S. had experienced eight years of prosperity under President Clinton. NASDAQ was a bubble that was ready to pop. When President Obama took office, the U.S. was near the bottom of the Great Recession (the exact bottom was March 9, 2009). There was nowhere to go but up. This year marks the 9th year of the current bull market – a difficult time for market gains, historically.





     

      3. How’s the Economy Doing These Days?
The predictions are for very slow growth, at just 2.1% GDP growth for 2017. (No one ever predicts a recession.) The 1st quarter 2017 GDP growth was the lowest it has been in years, at 0.07%. Other issues include: $20 trillion in public debt, over $66 trillion in total U.S. Debt and Loans, and business, governments and people who are borrowing from Peter to pay Paul to try and make ends meet.

      4. What Positive or Negative Events Are on the Horizon?
The current Budget funds government only through September 30, 2017. The U.S. Treasury Secretary is currently using extraordinary means to pay bills because the Debt Ceiling has been hit again. If the Debt Ceiling isn’t raised before the U.S. runs out of money to pay bills, then Fitch Ratings might downgrade the U.S. credit. The new budget and Debt Ceiling will have to be resolved in September to avoid all of this. The last time that Congress raised the Debt Ceiling, House Speaker John Boehner lost his job. He had to enlist the support of Democrats to get the Debt Ceiling raised. While the bipartisan Budget that was just passed makes it seem possible that all of this can get done, everyone is mum on the issues. If you wait for the headlines this fall, and they turn out to be contentious or problematic, it will be too late to protect yourself.   

      5. What’s Fueling the Bull Market?
Free, easy money (for corporations and countries, but not individuals or small businesses). Corporate buybacks. Financial engineering. For more on this, tune into my May 25, 2017 teleconference. Get call in instructions and listen back 24/7 on demand at http://www.BlogTalkRadio.com/NataliePace.

      6. What Other Opportunities Exist for Investors?
The best opportunities today are safe, income-producing hard assets that you purchase for a good price. Real estate is more expensive in many areas than it was before the real estate bubble burst in the Great Recession. So, income property is not necessarily a good price right now (although it might be in some areas that have not experienced a return to the pre-Recession highs). Most of the best areas of opportunities lie in purchases you can make now to reduce the money that you spend monthly on big ticket items like housing, transportation, electricity, insurance, medical insurance, etc. (This is another major area of focus at my Investor Educational Retreats.)

      7. What’s at Stake?
The last two times that the U.S. economy went 8 years without a correction, the economy crashed. Investors lost more than half in the Great Recession (and over 7 million people also lost their homes), and more than 3/4ths in the Dot Com Recession. This economy is far more fragile than it was in either of those two recessions, with all of the debt that abounds.

Access my teleconference, "Should You Sell in May and Go Away?" at http://www.BlogTalkRadio.com/NataliePace/2017/05/05/sell-in-may-and-go-away.

About Natalie Pace
Natalie Wynne Pace is the co-creator of the Earth Gratitude project and the author of the Amazon bestsellers The Gratitude Game, The ABCs of Money and Put Your Money Where Your Heart Is (aka You Vs. Wall Street). She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 year (in its vertical).

Rich people know and understand the basics of money, and how to make the best out of any situation. It’s like playing tennis with Serena Williams. She can ace a tennis ball like a missile off your head, lob, volley or fake you out. She’s been practicing endless hours every day, and has thousands of tools at hand that you’ve never heard of.
 
There are many times when you’re going to be standing there stunned, wondering what just happened, as another ball zings past your face before you’ve even seen it. If you’ve ever felt that way about the economy, like say in 2008 and 2000, that’s what’s happening. The “smart” money knows when a house of cards is about to fall. The CEOs of KB Home, Countrywide, Toll Brothers and Goldman Sachs (and many more) all sold hundreds of millions of dollars of stock between 2005 and 2008 – before the Great Recession. It may be bittersweet to make money when others are devastated, but it is certainly better than losing.
 
In finance, amateurs get wiped out in recessions. Everyone makes money in bull markets, just as anyone can float downstream on a slow-moving river. It’s the white-water rapids that let you know, as Warren Buffett says, “Who has been swimming naked.”
 
As we enter the 9th year of the current bull market, and the white-water rapids of the next recession become nearer, here are some very important facts to consider.

• The last two times the economy went 8 years without a correction, most people lost more than half. There were 55% losses in the Dow Jones Industrial Average during the Great Recession, and 78% losses in NASDAQ in the Dot Com Recession.
• If you lost more than half in 2008-2009, and you haven’t made any changes to your nest egg, you’re more vulnerable today than you were then. Why? The U.S. economy is far more fragile, with $20 trillion in public debt and almost $66 trillion in total debt and loans outstanding.
• The U.S. risks a credit downgrade if the Debt Ceiling isn’t raised without a fuss by the end of summer or early fall (whenever the Treasury runs out of money to pay bills using extraordinary means).
• The U.S. is currently using extraordinary means to pay bills.
• The 1st quarter GDP growth will be reported on April 28, 2017. It is predicted to be just 0.6%, which is barely breathing. It won’t be alarming because this is where the 1st quarter has been for the last few years.

 
Below are a few ways that Rich Americans protect themselves to rise above tough times and soar when the wind is at their back… Billionaires and Royals place a priority on family, on keeping their hard-earned money and on earning money while they sleep. If you know the tricks, you can embrace and adopt them, too.
 
10 Money Secrets Billionaires and Royals Know.

The rich are getting richer. The middle class is getting squeezed. And the lower class is still at the back of the line. You can change all of this by learning the ABCs of Money that we all should have received in high school. Call 310-430-2397 to learn more now.

If you want to get safe before the end of summer, join me at my next Investor Educational Retreat.

In the updated 2017 nest egg pie charts, I have an important alert for the safe side. Bonds and money market funds are vulnerable. FDIC-insured cash is safer. Safe, income-producing hard assets that you purchase for a good price are best. Why do I say that and what does that mean? (Click to get your own personalized nest egg pie chart in my free web app.) Is there any safe investment that pays a good return (like 20-40%)?
 
Bonds are vulnerable. They have already begun losing value, and in the worst-case scenario they become toilet paper or illiquid (the airline industry, auto manufacturers and Greek bond “restructurings” are examples). In today’s Debt World, this is a real consideration. Read my blog, “The U.S. Treasury Secretary is Using Extraordinary Means to Pay Bills” for more information on the risks of investing during such a highly-leveraged time. There are two aphorisms to remember when it comes to bonds today.
 
“I am more concerned about the return of my money than the return on my money,” Roy Rogers.

“Never reach for yield.” It’s hard to know who first coined this one. (If you know, please Tweet me.) But it has been said by many a wise woman and man over the years.
 
Money market funds now have redemption gates and liquidity fees. That means exactly what it sounds like. There could be times when you have to wait or pay to have access to your money.
 
Cash is vulnerable, too. When there is a shift in global currency trends, it takes a lot more cash to buy things. Inflation can whip up out of nowhere. We’ve already experienced that in housing, where many markets are simply unaffordable to 90% of the population.
 
So what are safe, income producing hard assets that you can purchase for a good price?
Let me stress that every single word in that sentence counts. The first thing that you might be thinking is buying a house and renting it out on AirBnB. I’ve known many a exasperated landlord who would warn against it. You definitely have to know what you’re getting into, including renter rights, before you become an income-property owner. You’ll also need to set up a business entity to protect yourself, and account for expenses and payments to independent contractors. But income property is not the first or best hard asset to purchase! (Be sure to read this blog to the bottom.)
 
Income Property
When I did my first Investor Empowerment Retreat in Cocoa Beach, Florida back in 2013, as we were playing the Billionaire Game® on the beach at dawn, we noticed a group of guys dressed up like Vikings. They were there to launch a satellite at nearby Cape Canaveral, and were doing an early-morning team building exercise out on the sand. (Drinking? Just kidding.)
 
Later that day, as we discussed the important considerations for purchasing a home or apartment building to rent out, I mentioned that I would like to buy a beach house in Cocoa Beach to rent out to Elon Musk and his satellite launch crew, when they come into town for space launches. At the time, the Cocoa Beach Beachfront Hilton rooms were going for about $99 a night. Today, just four years later, the rooms at the Cocoa Beach Hilton are often selling for $199 a night or higher. Why? Because there are so many satellite launches coming into town.
 
Since 2013, another consideration has been rising into the mix for Florida real estate – sunny day flooding. The entire Eastern seaboard is vulnerable to rising sea levels. According to the former Secretary of the Navy Ray Mabus, the naval base at Norfolk, Virginia is at risk if we don’t slow the rate of sea level rise. Sarasota realtors must disclose that rising sea levels could become a problem in that area within the next 15 years. Clearly, you don’t want to just have a great idea, and then purchase something that you might be stuck with until it is covered in water. Climate change is one of the reasons why I didn’t purchase in Cocoa Beach, Florida in 2013. Real estate is not a liquid asset (or one that works well underwater). You have to have a 10-year horizon at minimum when you think about income property.
 
There are a lot of homes in Cocoa Beach that were built during the first Space Race in the 1960s. They are pretty run down, and optimum for renovating. Due to high foreclosures and bank-owned property in the area, they could be a steal. Are they vulnerable to climate change? Is it worth it? These are some of the things that we are able to examine firsthand at the Florida retreat, which we aren’t able to do at the California retreats, where real estate has become unaffordable.
 
Rethinking ROI
Some of the best income-producing hard assets aren’t those that earn you an income, but are those that save you money. Life has become unaffordable for many Americans, due to the high cost of basic needs, like housing, transportation, gasoline, electricity and food. There are many ways that you can invest and save, literally, thousands of dollars every year in your annual budget.
 
As just one example:
 
If you purchase solar panels for $20,000,
Take a tax credit for 1/3 of the costs,
And your electricity costs drop to $30/month, from $300/month,
It will take you four years to pay off the $13,200.
Thereafter your “yield” or return on investment is 24.5%, with $3,240/annual savings on electricity.
 
If you switch to an electric car and “fuel” it up with solar energy instead of gasoline, that could save you an additional $2,000 or more each year, putting the annual savings at $5,240 (or more), with a yield of 40% annually.
 
You just don’t get anything close to that ROI on any bond. Even junk bonds only pay 6%.
 
One important tip: always do an air-test on your home, insulate properly, and switch your light bulbs to LEDs, before you purchase your own energy system (like solar). Reducing your energy consumption is one simple trick that can cut your energy costs by up to 80% on its own!
 
These are just a few examples of how learning The ABCs of Money that we all should have received in high school transforms our life. Most people report earning back the price of the retreat in the first few months in budget savings alone. One retreat attendee is saving $20,000 each year! That allows you to live a richer life today, provide far better for your future, take more bucket list vacations and sleep better at night.
 
Wisdom is the cure.
 
Join me for an intimate, empowering investor educational, boardroom retreat in the beautiful beach town of Cocoa Beach, Florida, June 10-12, 2017 for a life transforming, fun 3-days, where you’ll learn great strategies for protecting what you have, keeping more of what you earn and thriving with a well-designed, easy-as-a-pie-chart investment strategy! Register by March 31, 2017 to receive the best price. Get a great discount when you come with a friend. Call 310-430-2397 to learn more.