Journal of a Wayward Philosopher Archives - Page 11 of 33

Through the eyes of a child…

Fall has descended upon us up here in the mountains of Virginia.

Every day a few more leaves turn yellow, orange, and red… and every day the morning fog seems to be a little thicker. I love it.

For some reason I always think of the frontier days during this time of year.

We are way up in the Appalachian mountains. The population here has always been sparse—and that’s accentuated now that the nearby towns have lost roughly 50% of their population over the last several decades.

Apparently this area was predominantly settled by the Scotch-Irish back in the 18^th century. They must have been the only ones crazy enough to think they could farm such a rugged, mountainous landscape.

It’s also well-documented that several of the prominent American founders made the trek to these lands once a year back then. Both George Washington and Thomas Jefferson were known to visit this area often. They came specifically to bathe in the hot springs which are prevalent up here.

The springs were considered to have healing properties back then. If you ask the local resort, they’ll tell you the springs still do.

I don’t know. Maybe they know what they are talking about. This is the same resort that was around back then. It was founded in 1766. Both Washington and Jefferson would stay there when they visited.

This kind of history fascinates me. But then my gaze shifts…

Fall is upon us in the mountains…

Fall is upon us up here in the mountains of Virginia. This is by far my favorite time of year.

Humidity has disappeared. Mist slowly rolls across the mountains each morning. A cool breeze blows from the west. The leaves are beginning to turn yellow, orange, and red—one by one.

It’s simply amazing. And invigorating. Every day I say a silent prayer of thankfulness. I’m thankful to be here in this place at this time.

This is my first note to you in over a week. We’ve been busy putting together our first real marketing campaign for our trail-blazing investment membership The Phoenician League. Amidst the hustle and bustle I just haven’t found time to write.

That’s on me. But I’m happy to say that I’ve learned some valuable lessons these past few weeks. The biggest of which is this…

Redefining Retirement

We’ve been talking all week about the need to shift our approach to personal finance and retirement planning. The Age of Paper Wealth has ended… and what worked reasonably well the last forty years is not likely to work well going forward.

Yesterday, we dived deep into the art of asset allocation. And we pointed out that if we want true financial security, a robust asset allocation model is how we get it.

If that narrative shifted your perspective, brace yourself, because today we’ll be challenging a deep-seated notion even further. The entire idea of retirement.

When we say ‘retirement plan’, what’s the first thing that comes to mind?

For most, it’s a magic number. Maybe it’s $1 million. Maybe it’s $5 million. Maybe even more…

We’ve been conditioned to believe that if we can just hit our number, we’ll be able to retire early and finally be free from the job. We can hit the golf course in the morning and lounge by the pool in the evening.

But I have to ask… Have we ever stopped to question the very foundation of this idea? Is it really necessary to compartmentalize our life like this?

Crafting Financial Security in an Uncertain Economic Climate

Yesterday we touched on the inevitable fall of the Age of Paper Wealth. And we pointed out that it will inevitably lead to a renaissance for real assets. Especially those that produce cash flow.

Today, let’s take it a step further. Let’s discuss how asset allocation can be a game changer in these unpredictable economic times.

Asset allocation is the art of diversifying investments. And I mean true diversity here.

The CNBC definition of diversity is to buy stocks across different industries. Our definition is to build a portfolio around multiple asset classes. This is critical for the economic climate we now find ourselves in.

Consider this: What’s the best way to navigate a storm? By putting all your cargo in one part of the ship? Or by evenly distributing it to ensure balance?

The same logic applies to personal finance. Diversifying your investments across various assets can be a buffer against financial storms. This is how we cope with rising interest rates and volatile stock prices.

But here’s the thing – all assets are not created equal.

Real Assets in a Virtual World: The Key to Breaking Free from Financial Illusions

Yesterday we talked about America’s declining “exorbitant privilege”. Now we stand at a crossroads.

The narrative of personal finance as we’ve known it for decades is beginning to unravel. The Age of Paper Wealth is over. That means the days of dwindling interest rates and rising stock prices across the board are behind us.

The world has changed. And our understanding of wealth and financial stability must evolve with it.

I often ask myself, why do so many of us place blind trust in virtual numbers on screens, often far removed from tangible realities?

We’ve been conditioned to see wealth as a constantly fluctuating balance in our bank and brokerage accounts. Something that depends solely on the health of the financial markets. But what if we could step away from this illusory chase and root our financial future in something more solid… something real?

Rethinking Wealth in the Age of Deception

Our financial world has dramatically shifted. America’s “exorbitant privilege” is fading…

Starting in 1944, the US was allowed to print money in exchange for real goods from other countries. And the only limit on this privilege was the dollar’s convertibility into gold.

Then, in 1971, President Nixon closed the gold exchange window. From that moment on, the US dollar became a floating abstraction based on one thing… People’s willingness to use it.

This is what French Premier Charles de Gaulle called America’s exorbitant privilege. Because the US dollar acts as the world’s reserve currency, only the United States could print money at scale to buy real goods from overseas.

That dynamic created what I call the Age of Paper Wealth.

What comes next…

Today I’d like to share one final excerpt from my new book with you. It’s titled Beyond the Nest Egg, How to Be Financially Independent Outside of a Broken System.

Yesterday we set the stage for the book’s macroeconomic discussion. Today we’ll set the stage for the book’s suggested approach to personal finance.

The thing is – to manage our own finances successfully, we have to understand how all this macroeconomic activity impacts us personally. Here’s excerpt #3:

The Fed has spent the last thirty years consistently pumping cheap money into the financial system. By “cheap,” I mean money that it created from nothing.

In total, the Fed has created at least $8 trillion. That’s what we can verify. And there’s a good chance the Fed engineered even more new dollars through back-channels.

This onslaught of money created from nothing drove interest rates down to near-zero.

Then the commercial banks pyramided credit on top of these trillions of dollars by roughly ten-to-one. In other words, for every new dollar created, the banks could lend out ten dollars against it. And remember, this necessarily creates new money from nothing as well.

This all served to create a massive financial bubble in the US and many developed countries around the world.

Was George Carlin right??

We’re going beyond the nest egg all week long.

That is to say, I’m sharing excerpts from my new book Beyond the Nest Egg, How to Be Financially Independent Outside of a Broken System.

Yesterday we covered the introduction. Today we’ll set the stage for the book’s macroeconomic analysis. Here’s excerpt #2:

I spent about eight years in the world of corporate banking. That was my first career. After that, I spent nearly a decade immersed in the world of high-end–investment research. That was my second career. That’s the lens through which I am writing to you today.

The focus of this book is how to get our personal finances right, in lieu of the shifting macroeconomic climate we find ourselves in. My passion is financial independence, but I don’t approach this from a consumerist mindset. To me, it’s all about living a purpose-driven life.

That said, there are forces at work out there that have an outsized impact on the economy and the financial system. And as I’m sure many of us have noticed, these forces have been pushing substantial changes over the last few years.

We are living through an incredible point in history. The sequence of events that take place over the next several years will shape the order of the new world.

I suspect most of us already know this to be true. We can “feel” it. We’ve probably felt it for several years now.

In the next few chapters, I’ll summarize what I think is happening on the world stage… who the major players are… and what it means for us. There are some important actions each of us should take right now to get ahead of what’s coming.

Let’s go beyond the nest egg…

As I mentioned yesterday, I’m putting out a new book in the coming days. It’s titled Beyond the Nest Egg, How to Be Financially Independent Outside of a Broken System.

As such, I thought I would share a few excerpts with you this week. And I suppose it makes the most sense to start with the introduction. Here it is:

The world has fundamentally changed.

It used to be that a lack of information was one of our biggest challenges. Prior to the internet, finding information was much more difficult and time-consuming. It could take days, weeks, sometimes even months. Today, however, we have the opposite problem. We are inundated with incredible amounts of information all day, every day.

The problem is, most of this information is just noise. Much of it is nothing more than junk. And if we fill our heads with junk, we’re far more likely to make bad decisions.

The advent of the internet and the over-availability of information is just the beginning of how our world has changed, significantly and permanently.

Like me, I suspect many can “feel” that things aren’t going back to the way they used to be. At first, that’s an unsettling thought. What does that mean for us? And by us, I mean the regular folks.

Should we keep doing things the way we always have and hope for the best? Or should we make changes? And if it’s the latter, what changes should we make?

To answer this question, we must understand what’s actually happening on the greater world stage. And to gain this understanding, we must cut through the smoke, the mirrors, and the biases that pervade the information we take in every day.

We are creators in this world…

“I write because I don’t know what I think until I read what I say.” –Flannery O’Connor

I love this quote. It comes from early 20^th century American novelist Flannery O’Connor. Perhaps ironically, I’m not familiar with any of O’Connor’s books. But someone shared this quote with me years ago and I find it to be 100% spot-on.

The act of writing is both therapeutic and insightful.

It’s therapeutic in the sense that we all carry around a bunch of information in our head all day, every day. Our brain expertly processes this information for us. It instantly goes to work trying to filter out the “noise” so we can focus only on what’s important.

This gives us a greater understanding of the information we’ve taken in. And the act of putting that information to paper feels something like a release. It’s like a weight’s been lifted from our shoulders. As a writer, we feel like we’ve done something important when we put out what we consider to be quality content.

Writing is also incredibly insightful. As we sit down and try to communicate our understanding of the information we deem important… our understanding grows. To me, this magical. I can’t explain it.