Why Bitcoin is the Trade of a Lifetime #Podcast

Bitcoin and cryptocurrency and blockchain in general present a once-in-a-lifetime opportunity to experience explosive wealth generation within an asset class that is set to not only disrupt the banking but also the legal sector.

Although investing in established asset classes are safer (e.g. stocks, bonds, and property) safer assets also have less potential for growth. It is unlikely you will make significant money in safe investments. Great wealth made quickly is normally achieved by ramping up risk significantly, e.g. through leverage or by shifting funds into risky areas, e.g. emerging and frontier countries as well as emerging and frontier technologies.

Blockchain is a frontier technology, a nascent market unburdened by excessive regulation or rent-seeking monopolistic entities. It will not be like this forever. We have already seen web, social media, and smartphone technologies becoming dominated by large companies that have laid in place the infrastructure upon which commerce in these areas operate, e.g. Google in web; Facebook in social media; and Google, Samsung, and Apple in smartphones. These three tech sectors of web, social media, and smartphones make up the bulk of the Nasdaq 100, an index that is now quite saturated.

Investing Under a Trump Presidency [Podcast]

I am certainly not a Trump fan. I actually find the man quite disgusting, and I watched in horror as he was elected President of the USA. That being said, the stock market boom following his election has increased my net worth considerably, and I expect more gains in 2017. However, there are significant risks involved in investing in American equities at this time, so while you should be exposed to the market to capture all the gains from this bull market, you must be prepared to exit the market quickly once it is clear the boom is over.

Other topics discussed in this podcast include Wall Street’s complete takeover of the White House as well as reasons why residential real estate is a bad investment.

 

Is Your Primary Residence an Asset? Yes, But…

I was having lunch with a colleague a week ago and he said the following to me: “Your primary residence is not an asset but a liability because you have to continually pay for it. You don’t own your house. The bank owns it.”

This got me thinking because years of education has taught me that a house is an asset since assets are defined as anything that produces value. A house can be rented out to produce rental income. Indeed, it is an asset according to this definition.

But technicalities aside, I do understand what my friend was trying to say. After some googling, I found that this concept derives from the book Rich Dad, Poor Dad in which Robert Kiyosaki explains that a house generates negative cashflow and therefore is a liability for you.

He is wrong. It is not the house that creates the negative cashflow. It is the mortgage. The problem is, for most people, in order to afford a house, they need to accept the mortgage because they simply don’t have enough cash to buy a house outright.

It is this connection that the bank has concocted that fools people. When you buy a house, you get an asset, but it doesn’t end there. Two sets of assets are created. The first asset is the house, which you hold. The second asset is debt, which is held by the bank. Houses tend to go up in value, but not always. House prices tend to move up only slowly and are volatile. The asset the bank holds, on the other hand, is much more valuable. The bank holds debt. It produces income no matter what. Even if you default, the bank simply takes your house. Effectively, when the bank lends you money to buy a house, it is doing two things: (1) directing cashflow from you to itself and (2) transferring risk from itself to you. The cash the bank would have held would have sat in a vault doing nothing but by lending it to you, that cash now generates interest that flows to the bank. Rather than buying real estate itself and suffer from the risk of volatile prices, the bank simply puts that risk on you by lending to you. It gets a steady income while you wear the risk.

I am not against buying a home. What I advise against is the debt. Unfortunately, when most people buy homes, it is connected to debt. It is like coffee. Research shows the antioxidants in coffee prevents prostate cancer in men. But if you put four teaspoons of sugar in your coffee, the sugar will hurt your health. Likewise, even though a house is great for you, the debt that is attached is what will work against you. If you need to buy a home, I recommend you buy a small home to minimise the debt. Otherwise, pay off the debt as quickly as possible. Rent out spare rooms. I have nothing against buying a house as an investment, but it is best to stay out of debt.

The Physical and Economic Aspects of Alpha Maleness

Debt is slavery

What do I mean when I talk about an alpha male? In the animal kingdom, alpha males are those who rise to the top of the hierarchy. They have the power to do what they want. It is about power, but my desire for power is not linked to any desire to hurt others. I simply wish to defend myself. As a beta male, other males put me down and control me. Women disrespect me. I need to correct this. I need to become an alpha male. This will make men fear me and women respect me.

Being an alpha male is not just about swaggering around, swearing, or calling women bitches. There is also an economic aspect as well. An alpha male needs enough money saved up or invested to be free from wage slavery. An alpha male also needs to have his debt under control for the same reason. I’ve seen many beta males out there who have a wife at home, three children, and a massive mortgage, and these people come to work and slave away barely making ends meet. Freedom comes from running surpluses. Freedom comes from making sure what comes in to your bank account is much greater than what goes out. The opposite of this is slavery. Debt is slavery.