Smart Money Investment Strategies: How to Make Money Like the Top 1%
The Main Principle of Smart Money Investment
The smart money term refers to the top 1% of wealthy people who know how to invest in long term appreciating trends. The smart money always have access to inside information and pay attention to financial and economic trends. They are keenly aware of what asset will yield them a 10x+ return on investment.
So why don’t we learn from the smart money how to get the best return on our money?
The Top 1% Does Not Invest in the Stock Market
Let us get one thing out of the way. One percenters do not make money investing in the stock market. They control it. They own companies that offer stocks at the New York Stock Exchange and EuroNext.
What about Warren Buffet? What about him. He bought companies not stocks and index funds. Not only does he own companies but he owns insurance companies. Insurance companies have the highest profit margin amongst all industries. After all Berkshire Hathaway has been the most profitable company.
Think about it. It is easy to buy an insurance policy. However, it is a lot more difficult to cash it out. Insurance companies sell thin air. They sell fear through well managed perception. Of course, everyone wants peace of mind. And you will have peace of mind if you have a lot of money. Therefore, you do not need an insurance policy, you need money, do you? Money is security, an insurance policy is a perception of security.
The top 1% prefer certainty and control. Investing in stocks of companies you cannot influence contradicts certainty and control. You surely can speculate on stocks and produce some gains. However, investing all your money in index funds and stocks, that 401(k) investment amounts you to, constitutes reckless money management practices. Yet masses do it. When these practices do not produce desirable gains or lose most of it, they feel regret for the lost time and money.
Sell or Be Sold
Forget the stock market if you want to invest like the top 1% does. Truly wealthy people invest in businesses they design. Furthermore, they understand the Sell or Be Sold principle well and they capitalize on the former.
We deduce that smart money is smart for a reason and they have proof – their wealth. If you want to build wealth, learn what smart money have been moving their money into.
Why Smart Money Invest in Gold and Silver
The top 1% have been taking long positions in gold and silver. In plain language, ultra wealthy people have been buying physical gold and silver. Of course, you will not hear about it in the mainstream media.
The currency trading mogul, George Soros changed his cash positions to physical gold back in 2016.
JP Morgan Chase Bank has been taking long positions in physical silver building up a strong reserve as the currency value plummets.
Central Banks of the East have been accumulating gold. Gold has been deemed the best store of value in many middle eastern cultures for their entire existence.
Currency Cycles and Inflation
The reason these wealthy people have been acquiring precious metals lies in their understanding of the currency cycles. Each paper currency depends on money printing. The more credit is created, the less purchasing power a single unit of the currency holds.
In 1970 the average weekly salary could buy 3.7 ounces of gold. To compensate for inflation today, it has to equal $4,914 per week, or almost $20,000 a month ($19,700). However, modern day salaries do not keep up. Purchasing power is gradually decreasing leading to an economic slow down. To stimulate the economy the government implements quantitative easing, the strategy of extending cheap credit and printing more money. Since more debt (credit) is created, the value of the currency decreases. For you it denotes, the further loss of purchasing power.
Physical gold protects your purchasing power. Smart money know it and accumulate collectible numismatic gold (rare gold coins) to preserve their wealth.
Why Gold is the Only Safe Haven Under the Current Market Conditions
Most financial assets such as real estate and fiat products are overpriced. In fact, most investment real estate is mortgaged and based on mortgage backed securities and derivatives. Thus, real estate in the United States is a fiat product. Actually, easy mortgage credits allow real estate prices to go unreasonably high. Up to the point when these prices become unsustainable. Then the bubble bursts leaving the ignorant in an unfortunate situation.
Since purchasing power decreases, people are unable to buy overpriced assets and the party stops.
Currently, the purchasing power of the dollar only provides 3 cents. The amount of debt reached $22 trillion this month. These factors increase the need of a financial reset. The financial reset allows to re-assess the currency and tie it to the value of a stable asset such as gold and to hyper inflate the debt that cannot be repaid.
Cashless Society and Tangible Assets
Leaders of the world have been pushing us into a cashless society. No it does not mean everything will be free. I actually heard that things will be free in a cashless society. I normally step away from such people. It is called something else, not a cashless society.
So what a cashless society mean? It means that you have no control of your earnings but someone else does. You want tangible assets in a cashless society. You true tangible assets that have no contract or other contract associated counter party risk.
If you have a solely digital account with a bank, the bank will fully control what interest you earn. In the event of an economic slow down quantitative easing will fully affect you digital savings. The essence of quantitative easing is to stimulate the economy. Spending stimulates the economy best through cheap credit. You will likely see negative interest rates eroding your principle in the bank. If you do not want to spend, you will have no choice with your digital wealth: it will be slowly evaporating in favor of negative interest and economy stimulation by way of quantitative easing.
Gold and Silver
Gold and silver will be the answer to true ownership and to preserving your purchasing power in the upcoming financial switch. A prominent proponent of the cashless society, Ken Rogoff, officially acknowledged that gold will be the best store of value in a cashless society.
Sam Zell, a property magnate and a billionaire, recommended to dedicate a significant portion of the investment portfolio to gold.
The top 1% know it and capitalize on the low spot price of gold and silver. Do yourself a favor and invest some of your money in gold and silver. First, of course, pay off your debt as much as you can.
Follow smart money strategies, learn how to build wealth, and protect your own wealth.
Until next time,