Wisdom of the Masses Q&A


Saturday is the day we can express opinions and answer questions to enjoy the wisdom of the masses.

ecuador-parade

At times the masses can be colorful.

My answers to some of last week’s questions are below.

First, let me remind you.  Tomorrow is the last day for our special extended summer offer.

How We Can Serve You

How to Have Real Safety

Regain Real Security

There is a path to true security.

I was reminded of this once when I made a horrible mistake.  Almost!

The supposed error?  Letting my mind wander six decades back to an hour I spent with a girl.

Learn from this near disaster, seven most powerful sources of wealth, health, security and fulfillment in this era.

The girl was pretty and blond.  Terry was her name. My imagination spanned decades returning to my Oregon roots seeing her as if she were there.

We were 11 or 12 and had known each other since we started Rockwood grade school.  Just buddies, our non-romantic friendship lasted 12 years, from first grade till high school’s end.  Then she went off to Pepperdine College in California.  I started traveling the world.  Never saw her again.  I hope her life has gone well.  But until that reflection I’d never thought much of Terry in so many years.

What could have been the tragic error was letting that memory touch my heart.  Two kids, walking on a crisp, Pacific Northwest autumnal afternoon.

We walked down a sun filled, pine needle covered, dirt path.  Huge, fat, green Douglas firs lined the road.  Traffic was no problem, not many cars.  Crossing Stark Street we turned left, hiking three blocks to 182nd.  There we passed an old clapboard candy store.  I can still hear the wooden sidewalk of that store slap beneath my feet, felt the soggy planks sag and smelled astringent pitch from the fir trees.  Then we turned right, up 182nd for about a mile.  There was Terry’s house.

I carried on, walking through a big field, waist high grass turned straw brown by an early frost.  There were dozens of paths made by who knows what.  Animals perhaps or countless generations of other kids walking home alone from school.  I chose one following it to another wood of tall, rough-barked fir.  Crossing one more field, I climbed a rock wall, struggled through a barbed wire fence (my Mom hated that fence ripping my jeans).  I was home!

Sweet simplicity, that dream.  Two kids holding hands, walking on a dirt trail under a crisp, but blue, sunny sky.  Pure innocence.

My tragic error was looking back.  I returned to Rockwood, Oregon with Merri and my kids to show them this part of their roots.  Following the route, Terry and I had walked were the candy store, grange hall, old wooden buildings and their home spun honesty and charm.

Instead we found six lanes of fast, frantic traffic and road rage.  McDonalds, KFC, strip shopping centers.  The car radio blared warnings of local gangs and drive-by-shootings. Beauty, innocence, sweet simplicity, replaced by drive ins and drive bys.  Gangs and drive-by shootings replacing a tender walk in the sun.  Good bye memories, good bye.

How can our kids walk in places like this?  How can we return to those old feeling of security and comfort?

How can any of us possibly keep pace in this world that’s moving so fast?  Then something inside snapped. “There has to be an answer for honest, hard working folks to enjoy the wonderful opportunities of today and regain what we’ve lost over the past forty years”, I swore to myself.

How can we keep up, without having such a fast paced life we turn into machines?  Where do we find time for God, family, charity, and our friends?  How can we rediscover those sun filled, pine needle covered, dirt paths we want to walk?

“There has to be places that are still innocent and pure”, I thought.  “There has to be a way of life that does not pound us with stress”.

This thinking led me to begin reviewing the thousands of economic and business experiences I have shared with readers over the decades.  This started a search for a simpler way of life and a better place to earn and protect our wealth.

By digging, asking and observing, traveling and talking to investors and investment managers all over the world I found that there are true paths to real security in the here and now.  That knowledge helped me develop courses on how to have natural health, everlasting wealth and purposeful investments.

This knowledge helped Merri and me invest in stocks and real estate all over the world.  It helped us find and develop Merrily Farms into a sanctuary here on Little Horse Creek.

That almost error led us to create an entire portfolio of information on how to keep pace, get ahead, enjoy our modern society but, to enjoy life wherever you choose without having to move too fast.

This is why I am making a special three day “Let’s get our lives back offer”.

“What would you think in the last 30 seconds of your life if you were the richest man in the world but were unhappy?”

This quote is from the opening slide of our Value Investing Seminar, “How to Secure Your Future With a Value Breakout Plan”.   This a vital question because few investors think about the value of comfort and happiness.  Yet the truth is, those who are comfortable and happy with their investments are most likely to make good investment, business and lifestyle decisions.

Without comfort, no matter how much money a person has changes are, they’ll eventually lose it or kill themselves with stress from worry.

There is a way to have the perfect form of financial security.  Let’s call it the perfect pension.  To help understand how to build an unshakable economic platform, here is Part One of the report, The Pruppie Factor.

The Pruppie Factor – Seven Steps to Comfortable Living & Profits.

“May you live in interesting times”.  That’s a Chinese curse that seems to have been cast on our modern world.  We can enjoy comfort and profits in the year ahead despite this fact.

Become a Pruppie.  Integrate your earning with your investing and enjoy peak living, everlasting wealth and natural health with PIEC Investing in the year ahead.

Before we look at what PIEC means, let’s delve into Pruppieism, the new economic and social realism.  Pruppies expect everything to expand.  They take advantage of every new benefit and technology they can.  Pruppies enjoy using the fruits of our ancestor’s deliberations and labors to earn in this advanced technological world.  They also engage in activity that they love that would sustain them in case society and the incredibly intricate weave of our global economy and society should fail.

Pruppies are prepared in case everything, everywhere, or at least everything relating to their income and savings fails and the fabric that surrounds their lives disintegrates into an unknown veil.  Yet a Pruppie’s preparation is not a sacrifice, but a joy as you will see.

Hope springs eternal and it should.  One of the key themes in my first book, Passport to International Profit, (published in the 1970s) was “The Sun Always Shines Somewhere”.  This thought has been in and remains a foundation of everything I do.

Sometimes this sunshine is hard to see because the press always focuses on doom and gloom.  Current news often makes the world seem about to end.  We cannot blame the press. Bad news sells.  The majority seem to want to worry instead of learn about all that’s good.  This does not make doom and gloom right.  This is why the majority are also the rich portion of the population, but bad news is an economic fact for the press.

Yet despite all the negative headlines, we have lived through the Cold War and MAD, Y2K, GridX II, the Peak Oil Crisis, the recession of the 1970s, 1980s 2007, etc. etc. etc.  Chicken Little is always out there, selling the falling sky.  Don’t buy into this story!

History suggests that there will always be opportunity.  The sun always shines somewhere.

Brexit, global warming and the election of Donald trump as President of the United States are 2016 examples of how the press gravitates to negative news.  These three events may be bad news or not.  The future will tell, but they are examples of how the media focuses on tiny parts of our infinite existence.  They can make anything and just about everything seem negative.  This can blind us to the positive realities ahead, if we let it.  Don’t.  Expect that the world will remain standing and look for opportunity instead!

Our wealth and economic opportunity is pushed by supply and demand.  We are part of a growing global population.  New technology makes more people, as a whole, more productive every day.  The world has increasingly larger markets creating more supply in increasingly efficient ways.

This reality increases everyone’s wealth.  Yes there is a lot of bad news in many places.  There is inequality.  There is crime.  There is war and hate and injustice.   Despite these negatives there is even more that is positive.  Opportunity grows.

Pruppies tap into and use every bit of the good news they can.  They have a plan B if everything goes wrong, but Plan B is based on something a Pruppie wants to do we love, not just a shelter from bad news.

At the end of this report, you’ll find three day special offer that can help you integrate earning and investing for the ultimate form of profit and safety.

Imagine this example of Pruppism.  The Tiffany lamp casts an amber glow, rich, ivory and warm in the grey gloom of early dusk.  The gold knobbed mahogany desk, its deep patina waxed and smooth, shines with reflections of ancient leather Chesterfields stuffed full, but rumpled with age and of maritime shots that hang in brass frames on the wall. The room speaks of settled tradition, the kind that might never end.  But thoughts instead are on the demise of the business that has supported this room.

The late Jim Slater of Slater Walker, a British industrial conglomerate turned bank in the 1970s was in that room.  I recall his bank’s collapse well as I was living in Hong Kong and Slater Walker was a huge going concern in what was a British colony in those days.  The Slater Walker crash was big news that unsettled the entire British banking system at the time.

Slater, the founder, had been a really high roller, using every modern banking tactic available including buying many assets with cheap loans.  Then in the mid 1970s banking crisis interest rates skyrocketed and his bank was unable to refinance its debt.  The company failed and Slater had to resign.  Numerous charges were brought against him and he spent considerable time defending what he had done.

In the end he was only fined a nominal sum but despite this, his banking career was well and truly dead.

However he had already moved on.

He wrote about this in his autobiography, “Return To Go”.  He had always had a hobby making puppet shows and telling stories to his children, so instead of banking, he turned his passion into profit and wrote some children’s books.  His first effort sold a respectable 35,000 copies.  His next a monster series for younger children, became a huge hit.

He had also maintained a hobby of salmon fishing so again turned his passion into profit by creating a business that bought up fishing rights and resold them as time-shares.  He had quite a success.

Some day a catastrophe beyond our control could redirect the course of our lives.  We might lose a job, learn that our pension won’t pay or that our dollars won’t buy as much as they must.

Though Jim Slater was a banker, outside economic forces beyond his control caused his business disaster.  Yet he had options because he had been doing things he loved that were not related to his banking, but could become useful income generators in difficult time.

I do not know if Slater understood Pruppism but that’s what he was practicing.

Pruppism is a positive realism based on the knowledge that much of our lives are directed by events that we do not know or expect and could not change them even if we did.  There is always something we do not know and that’s okay.

Years ago I was speaking at an investing seminar in Marbella Spain.  One of the speakers was a brilliant strategist, Johan Peter Paludan, of the Copenhagen Institute for Futures Studies.  This institute has a large interdisciplinary staff with expertise in economics, political science, ethnography, psychology, engineering, PR and sociology.  They identify and analyze global trends that influence the future.  Paludan was speaking of these trends and answering questions that delegates had about the world’s economic future.

One delegate asked what to do if there was a global nuclear exchange.  Paludan replied that the results of some events are so unpredictable that it is not worth trying to plan for them.

This thought has stuck with me for decades because it helped me realize that no matter how cautious, how defensive and careful we are, there are events that we cannot even imagine that can turn our lives upside down, for the good or bad.  With this in mind my wife Merri and I have created a lifestyle where we turn our passions into profit but in a way that whatever happens we are likely to be in a position to spot the positive and the opportunity.

A PIEC Experience

Pruppies gain the benefits of PIEC wealth.  PIEC is an acronym for “Personal Income Earning Corridor”.  PIEC income and wealth come from doing what you do for love, rather than just the money.

Traditionally people get jobs to create income.  They work to live and support their lifestyle while attempting to spend less than they earn.  They hope, that maybe the savings will bring, sometime in the future, a lifestyle of doing something enjoyable without work.

Pruppies reverse the priorities.  Instead of working for money to save and invest, they focus their prime effort on doing something they enjoy right now.  Then they learn how to enjoy the effort in some profitable way.  They learn to create “Avenues of Abundance” that combine lifestyle with the necessary task of accumulating wealth.

If economic circumstances tie them to an existing income effort, they create hobbies that are income producers of the future.

For example, if a Pruppie loves golf; instead of working six days a week, 50 weeks a year just to golf on Sundays and during short vacations, instead he or she will create a business in some aspect of the golfing trade.

In another example, a client of mine, who loved animals became a vet.  But he learned that the vet’s lifestyle was not one he enjoyed.  He wanted to travel and move around, which is difficult for a professional who needs to stay at his office and build a practice.  So he built a business that prepares special animal foods for race horses.  Now he travels globally visiting horse breeders and makes much more money as well.

Pruppies combine money with time, energy and desires.  They generate income doing something desired.  Desire and fulfillment become at least as, if not more, important as the money.

#1: Do What You Love!

The reason PIECs work well is that when we love to do something, we do it better, for longer and with greater enthusiasm.

Effort, determination and tenacity are wealth building attributes that cannot fail.  Yet Pruppism does not mean we should suddenly abandon our jobs and try becoming golf pros, when we have never been able to break 100.  Smart Pruppies start small and gradually expand into their passion.

For example, as a writer and lecturer, I was never fully satisfied sitting behind a desk or standing on a podium all day long, even though I was making over a million bucks a year. I’m the physical, outdoors type and yearned for exercise and the wilds of the deep woods. “What good’s the money if this isn’t fun?” I often asked myself.

Rather than quit writing and teaching, I looked for ways to combine these professions with the outdoor life.  Through research I learned that many city folk like myself yearn to be in the primitive outdoors.  So I bought an isolated farm high in the Blue Ridge Mountains and an Andean plantation high in Ecuador where I developed seminar centers with charming but simple dwellings, set in rustic surroundings, with clean water and pure air.  Now I live in nature so after I finish the writing or talking, I can walk in the woods or take my axe and chop firewood or something physical.  I’ve combined my writing with physical work and have blended the life I want, with my readers’ needs in a way that makes great financial sense.

We built a series of cabins in the wild that bring more profits than most stocks or bonds could ever return.

The process took six years to shift. Now we have been at this for nearly two decades and we are far from finished.  But while doing what we love, who cares? This is one of the great benefits of PIEC investing. We can slow down and enjoy the work instead of always rushing ahead, looking for something more.

Those who work nine to five can start PIEC businesses part time if they are too uneasy to quit their jobs. Others, who like myself, already have a business can slowly shift their product or service in a sensible way and let it evolve toward their PIEC.

But where do we start?

There is a seven step process we can all use whether we have our own careers, a business or even if we are retired (PIEC investing is especially good for retired folks who have found the supposed good life flat or financially short).

The first step is to get a clear idea or vision of our dream.  This is sometimes harder to achieve than it seems.  We are so deluged with false ideals from Washington, Wall Street, Madison Avenue, etc. that we have to stop and really take stock.  What do we sincerely want?

There is a very practical economic reason to look inwards for wealth.  Warren Buffet recommends that we only invest in what we understand. What can we understand better than ourselves?

This inner search will lead us to an ideal that begins the second step which is gaining enthusiasm.  How can we be anything but enthusiastic about finally fulfilling our deepest dreams?  The enthusiasm leads to the third step; gaining an education.

We need to find out everything we can about our idea.  To succeed we must take the third step and become real experts in the product or service we offer.

Fourth, this educational process allows us to develop an intelligent, focused business plan we can act upon and the action is the fifth step which brings us the experience. Experience gives us the sixth step, a financial loss or profit.  We always profit in increased knowledge which creates the seventh step, more ideas.

Then the entire cycle starts all over again: Idea, Enthusiasm, Education, Action, Experience, Financial Profit and New Ideas.

This is a way to keep adding new opportunities into our lives.  Business is rarely static. It is an ever evolving process instead.

This seven step cycle may take days, weeks, months or years, but the moment you begin you’ll start moving into an avenue of affluence where you love your work so though money isn’t your main goal it comes more easily.

#2: Do what you love, but also be of service.  Do something for others that is meaningful and important to you.

We all have a purpose in life and when we are filling it, we feel fulfilled.  Wealth and fulfillment is the goal.  Fulfillment is important because of the law of diminishing returns.  A 2008 study that analyzed Gallup surveys of 450,000 Americans suggested that day-to-day contentment improves until income hits around $75,000 per annum.  After that, more money just brings more stuff, with far less gain in happiness.  Income beyond $75,000 does not do much for a person’s daily mood.

This is a pretty general study and regional differences in costs, inflation and life circumstances will create many fluctuations from this norm, but the point is when money is the main goal, the better you get, the harder it will be to gain satisfaction.

Giving, on the other hand, never has limitations, especially when the giving helps complete a purpose that is part of our destiny.

This is true in business and investing.  A study of investors for example found that investors with socially responsible ideals gained the best returns.  A dual goal of profit and achieving some social benefit provides a purpose beyond returns.  This brings comfort and determination to the investments and the added stick-to-it-ness helps increase profits.

The financial giant State Street Corporation’s Center for Applied Research did an 18 month study of 7,000 investors to get a better understanding of the role incentives play in making investment decisions.  Based on this study a new measure of investment performance called “Phi” was created.  Portfolios were previous rated by their Alpha, Beta, and Gamma. Phi is the newest measure of performance.

Alpha measures an investment’s performance against a market index.  If the Standard & Poor’s 500-stock index is up 10 percent and a mutual fund is up 15 percent, for example, that 5 percentage point difference is alpha.

Beta is the return of any given market.  And charting beta is what a passive index fund does.  Comparing different indexes’ beta — say domestic equities and international bonds — helps investors in deciding how to allocate their investments.

Gamma is a measure of the impact on returns of more intelligent financial planning decisions.  A Gamma rating quantifies the additional value that can be achieved by optimal asset allocation, a dynamic withdrawal strategy, incorporating guaranteed income products (i.e., annuities), tax-efficient decisions, and liability-relative asset allocation optimization.

What phi aims to add is a way for investors to quantify how their motivations — or those of the people managing their money — will affect long-term investment returns.

The study examined what motivates a person to invest — or not and found that main investment motivations are market-based motives, the most frequent and powerful being fear in the market.  Both market motivations, the prospect of profit and the fear of loss, can have a negative effect on long-term performance.

A deep sense of purpose is what causes a high phi score.  A high phi factor is not about outperforming markets or peers, and it’s not an asset-gathering measure of performance.  Pi performance is defined as sustainable investing with a deeper sense of purpose.

People who invested with socially responsible ideals did best in the study.  The dual goal of profit and achieving some social benefit provides a purpose beyond returns.  This brings comfort and determination to the investments.

The study helped define three aspects of investing that are generally ignored, purpose, habits and incentives.

Purpose.  Purpose requires some soul-searching questions about what we each want our life to be.  This purpose is more important than the investment goal.  The purpose of the money we have becomes more important than the amount in the portfolio.

Habits.  Habits come next because we need to create habits and routines that keep us on the path of our unique purpose.  The marketplace does all it can to distract us from our goals.  There is an endless stream of news, rumor, conjecture, facts figures, ideas and tactics generated by every part of every stock market aimed at getting us to act in ways that benefit the agenda of others.

Habits help us avoid being distracted from what we are meant and want to do.  The muffle the noise of Madison Avenue, the spin from Washington DC and the hidden agendas of big business.

Incentive.  Changing incentives to accomplish a purpose instead of a numerical (percentage or profit) goal helps us adopt better behavior.  We react to accomplishing our meaningful purpose instead of drama created by media as well as manipulation and short term whims in markets.

The study showed that changing incentives in this way improved phi when they had a meaningful impact on a person’s investment strategy.

The study found these facts: Every one-point increase in people’s orientation toward investment goals with a purpose — and the scale is 0 to 3 — equated to 42 percent greater odds that the investors know what they are paying in fees, 37 percent greater odds that investors are not rejecting their financial adviser, 38 percent greater odds that the people consider investing in socially responsible investments and 79 percent greater odds that investors will trade less frequently, the research found.

As in so many others cases, two of the most important factors of success are keeping costs and trading activity low.  These are among the most powerful ways to increase wealth.  Having greater fulfillment as well as more wealth is a bonus that Pruppies call “Everlasting Wealth”.

Figure out what is really important in life for you and then find ways to invest in that purpose.  When you do, you’ll be on a solid path to everlasting wealth that is not so easily diverted by the daily drama that seems to be unfolding in the modern world.

Learn to focus your investments using purpose as the most important investment goal.  The purpose of money becomes more important than the amount.

Learn how to create habits and routines that keep us on the path of our unique purpose.  The market will do all it can to distract us from our goals.  Understand that many banks, brokers, the media, the government and commerce all have agendas to take our money, not make more for us.   Good wealth habits and routines protect us from this.

#3: Integrate your earning and investing. 

Long term success in business and investing are determined by control and comfort.

Comfort comes from feeling in control, but since there is always something we do not know, real comfort comes from knowing that we are serving a valuable purpose, the best we can, regardless of how events unfold.

Real comfort helps maintain determination, dedication and enthusiasm, all among the most vital parts in the process of succeeding in investing and business.

Our own business increases comfort because a business is simply an investment that gives us more control due to the addition of our own time and energy. 

A Personal Income Earning Corridor (PIEC) begin with a main income generator that we control.  For some this is a job with a salary.  For others it is a pension. For many it is their own business.

Integration of business and investing is important because investments are not always good income generators.

Years ago I managed an investment portfolio for Canada’s largest private investment management firm.  One day, during lunch with the president of the firm, we discussed the difficulties of professional fund management.  He explained that one of his biggest problems was the excessive expectation of customers.

“I have a retired client who has a million dollars”, he said.  “The client wants $90,000 a year to live on.  In a good year, we might earn 11%.  The client can take 9%. Our fee is 1% and the client’s fund increase by 1%.  In a bad year, we might earn 5%. The client takes 9%.  Our fee is 1% and the client’s funds drop by $50,000.  In the next year the client has even less to work with so a withdrawal of $90,000 may be more than 9% of the portfolio.  The client tends to take even more in good years, but never reduces the demand in bad years.”

The number one golden rule of investing is that there is always something we do not know.  Risk is always our partner.  When we invest, there is always potential that will negatively affect our financial welfare.  Our investments might rise or fall because of market conditions (market risk).  Corporate decisions, such as whether to expand into a new area of business or merge with another company, can affect the value of our investments (business risk).  If we own an international investment, events within that country can affect our investment.  There is both political and currency risk.  There is liquidity risk because we may need to draw on an investment at a time when it price is low.

Plus there are broken promises.

We live in an era of broken promises.  Defaults could ruin most average retirees and even investors.

A look at government, social and currency breakdown at its worst can help us see the problem.  Germany is an example when it borrowed heavily to pay WWI costs.  Such borrowing almost always leads to currency and social erosion and this did then.  Right after the war there was some stability, before government spending began to run wild.  By 1923, it reached the worst in history.  This caused prices to sometimes double in hours. In Germany by late 1923 it took 200 billion marks to buy a loaf of bread.

Hard-working people with modest spending habits could not even buy a postage stamp with their life savings.  All debt was wiped out but so too were all savings.

Salaries were paid three times a day yet shops were empty.  Food riots raged. Businesses closed down, unemployment soared.  The economy collapsed.

Anyone on a fixed income was destitute.  They sold everything just to buy food.

Small businesses however survived because they could hold material things such as clothing, food, anything people could consume. 

Recent news about Social Security, pensions and health care shows that the US government has excessive debt today and that we as individuals need tactics to make sure, when governments, pensions and insurers weasel out of their promises, that we can take care of ourselves.

One big broken promise is Social Security and Medicare.  The most recent Social Security trustee report shows that the programs will begin to spend more than they earn within just three or four years.   The Medicare hospital-insurance trust fund, could use all its reserves by 2028.  They face insolvency over the next 20 years because Social Security runs totally out of money by 2034.

This is a bigger problem then it may seem because it creates an even bigger broken promise concerning the US dollar.

Medicare and Social Security already account for 41% of federal spending.  That was the expenditure last year.  This is not a static problem.  Each year that percentage is growing worse.  This creates a special risk for the dollar because Social Security’s reserves are not really assets at all.  The purported assets are simply IOUs from the US government.

Social Security assets are a liability of the government, so eventually the money comes from the same place as all other government expenditure, taxes or federal debt.  This means that if Social Security has to sell an asset, then the government, already overburdened by debt, will have to borrow the money from somewhere else.

If the Fed cannot raise enough money to pay Social Security only two options are left, devalue the greenback or don’t pay.

When Social Security was established in 1935, the President and Congress imposed taxes to pay the promised benefits. Thirty years later politics had changed.  When Medicare was established in 1965, the government took credit for the popular health coverage but left the payment problem for future generations.

President Nixon and Congress also enjoyed the popularity of they increased Social Security benefits  in the 1970s but left future generations the bill.

The public has not been fooled.  A survey in 1964 found that 77% of the population answered yes to the question “Do you trust the government to do the right thing “just about always” or “most of the time”.  Only 19% answered yes in 2015 according to Pew Research.

Yet what can individuals do other than what we have, voting in new administrations?

Voters attempted to create change in 2008 with a new administration.  The election process and result of 2016 suggests they were no pleased with the results. 2017 and beyond may be “interesting” years.

There should be little wonder that Americans have stopped trusting politicians who promise benefits to get and remain elected but leave the burdens of paying for the promises to pile up waiting to sink the next administration.

This problem has grown so large that in 2011 Federal Reserve Chairman Ben Bernanke “maintaining the status quo is not an option. Creditors will not lend to a government whose debt, relative to national income, is rising without limit.”

In 2014 Federal Reserve Chair Janet Yellen told Congress that more work must be done “to put fiscal policy on a sustainable course.”

If the government does not resolve this problem soon, then the world of lenders will.  If the US has to raise interest rates to continue attracting loans, a downward spiral will grow.  Higher rates create greater debt and greater debt demands higher interest payments. The costs will be catastrophic.  As investors flee US bonds and T-Bills for safer investment, the US dollar will lose purchasing power.

Social Security, if paid and even if paid in the same amounts as before, will buy less.  If Medicare stops working then all that’s left for backup is Obamacare and the private insurers in the plan.

This is another broken promise.  When United Health Group, the nation’s largest health insurer, recently announced that it was pulling out of Obamacare insurance the public learned that it will face higher premiums.  Many will need to choose a new plan, change doctors and hospitals as well.  United Health is not the first or only insurer to quit. A dozen nonprofit health insurance cooperatives shut down just last year.  The giants Aetna and Blue Cross Blue Shield are even considering a drop out.

If Social Security and health care promises are broken that just leaves our pensions. Right?

Yet if we look at the Pensionrights.org website we see hundreds of corporations that have reduced pension benefits including the likes of Honda Motor Co., Ltd., Allstate Corp., Coca Cola, Boeing, Caterpillar, Kraft Foods, Hewlett Packard, Fedex GM and GE to name a few of over a hundred.

This problem is not limited to corporate pension.  An Economic Budget Issue Brief issued to Congress from the CBO (Congressional Budget office”) says:

“By any measure, nearly all state and local pension plans are underfunded, which means that the value of the plans’ assets is less than their accrued pension liabilities for current workers and retirees” CBO.

The report shows that even five years ago the short fall of State and Local Pensions was over 3 trillion dollars, more than all other state and local debt

That leaves the Pension Benefit Guaranty Corporation (PBGC) as a safety net.  In the 2015 PBGC’s annual report the Director’s message says:  “One of the most important functions of PBGC is assuming responsibility for pension plans when their sponsors can no longer keep them going.  We insure the benefits of more than 40 million workers and retirees.  Currently, we pay more than 800,000 people each month.  An additional 585,000 workers are scheduled to receive benefits from PBGC when they retire.”

But if you look at the first paragraph of the Financial Report in that annual report you see:

“PBGC’s combined financial position decreased by $14,577 million, increasing the Corporation’s combined deficit (net position) to $76,349 million as of September 30, 2015 an all time record high from  $61,772 million as of September 30, 2014”.

Every step along the way we see shortfalls, debt with little hope of repayment and an economic overhang that will eventually create broken promises at every level from the pensions, healthcare, Social Security and most from a falling US dollar.

These facts will ruin the life styles of millions, but not all.

In short, there is risk in even the safest investments and there is a possibility that a negative financial outcome might occur.

This is why multi dimensional business opportunities make sense.  You can profit from expanding your utility.  The US currency may fall but your business can offer valuable, needed services or products that will be worth more than gold.

You can gain from having a source of income in a place where you have the best chances of control.  This is why for centuries… small business have had a home upstairs and business below, so the owner could control their business.

Those who profit most in changing times are those who add new dimensions to old time proven ways.  Modern technology offers many exciting ways to create multi dimensional profit and can earn income at home.

When you have your own business, you reduce the need to place excessive demands on your savings and you reduce the risks of broken promises especially when your have a multi dimensional business with multiple streams of income.

At the end of this report, you’ll find three day special offer that can help you integrate multiple streams of income and investing for the ultimate form of profit and safety.

Merri and I aim to create multi dimensional opportunity wherever we live.

In Florida we bought a house and an orange grove next door.  Then we added a rental unit.

In North Carolina we bought a farm, then we added a seminar center, rental units and a trout raising business.

Products and services of essentials, food, clothing, shelter, protection and good health are the real golden assets in the worst times.

Imagine the scenario where our entire structure melts down.  “See the man who has just come in to get some milk for his family.  He stares at the rows for canned milk.  They were empty. Cleaned out.  He closes his eyes.  The world spins.  He snaps his eyes open and checked the rows again.  They are still empty.  He feels oddly betrayed.  Grocery stores are the supports of life.  When you need something you come here.  This is a fact of life in today’s world.  How can he not take this for granted.

“He rushes to the dairy case.  That’s empty too.  He runs to other shelves and sees shoppers piling up food, any food they can grab, throwing entire rows into their carts.  He is pushed and shoved in a mad rush to take any remaining food.

“The man speeds off to the nearest Dollar Store but finds the parking lot filled, lines waiting just to get in the door.”

Just one disruption in the supply line and in a day, the stores were empty. Our modern world is so intricately connected and stores operate on a just-in-time inventory control system.  When you buy anything a computer orders more and it comes next shipment, next day. One glitch in this complex system, one short break and the shelves rapidly go empty.  The barer the shelves, the faster everything goes.

Yesterday everything had been normal. Suddenly there was no milk anywhere.

The man’s tale is imaginary, but the fabric behind it is not, as the real story below shows.

In September and November of 2016, the Colonial pipeline that supplies millions of people with gasoline was shut down.

In November, one simple error caused the disruption.  A track hoe digging for utilities accidentally struck the pipeline, ignited gasoline and caused an explosion.

In September there was a leak (over a quarter million gallons of gas) that caused the disruption.  While shut down, so many people rushed to the gas station to fill up that it created a panic and shortage.

I spoke with the owner of the local gas station we use. He said people were lining up to fill their cars, gas cans and even large tanks in pickups.  He had to limit sales.

A shortage of just about any essential quickly creates panic.  In the pipeline disruptions motorists running to gas stations deviated from their normal consumption habits at the pump and quickly exhausted existing supplies.

There was still plenty of gasoline, but the ability to transport the product to North Carolina (and four other states) was restricted.  Loss of common sense, civility and safety flew out the window within hours.

This was despite the good news that there are two pipes that run side-by-side.  Only one was ruptured, so the disruption was not as bad as it could be.

The September leak, just one small problem in just one pipeline led to days of dry pumps and higher gas prices in Alabama, Georgia, Tennessee and the Carolinas while repairs were made.

Five states are so dependent on just two side by side  pipelines that their shutdown can create panic for millions of people in under one day.

Merri and I make each of our houses multi dimensional…a home and a source of income from some essential product.

Governments are going further into debt globally.  This creates serious debt and economic problems everywhere.  These burdens mean that governments and societies lose their ability to keep their promises.  Multi dimensional earnings can help overcome the risks these conditions create.

Our website has long shared the idea of multi dimensional business, investing and living.  We have looked at the idea of living as a landlord or the idea of multi dimensional writing and farming or Ecuador farming with B&B, plus Ecuador B&Bs on the beach or in the Amazon to name a few.

Multi dimensional opportunity earns in numerous ways.

Merri and I have always created multi dimensional opportunity in our global travels.  We have united self publishing, seminars, tours, real estate, teaching, currencies, investing and real estate to enhance our income and living.  For example in London we converted a house into an office and bedroom time share. We found special currency deals that helped.

I came across this (one of my first) multi dimensional opportunities when I wanted to finance a house purchase in London.  My business plan was to create a small office-apartment complex.  I would live in part of the house, have an office in part that I would share with a number of my readers.  The deal was aimed at helping overseas businesses people have an office and a place to stay when they were in London.  I set up a club something like a timeshare.  Not quite a timeshare but close enough.

My track record with the bank was good and I had always repaid loans.  Yet the policy at that bank was “timeshares are no-nos”.  I could almost see the glaze come over my bank manager’s eyes as I explained the project.  It was the look that said “No matter what you say, the answer will be NO”.  Once a manager thinks that what you want is against company policy, it is better to do something realistic like climb Mount Everest on a lunch break.  I come from a family of modest means and had no relatives or friends with the cash to start the deal so my alternative was to find overseas investors.

After making the necessary polite motions with my banker and letting him do likewise, I thanked him for his time and was preparing to leave.

Then he said, “By the way let me show you our new American Express Gold Card plan”.  The bank had just started to offer credit cards and they came with a 7,500 pound unsecured overdraft.  He told me that overseas investors could have these as well as local investors and customers.

Overdrafts are a peculiarly British line of credit that allows you to borrow up to the limit of the overdraft without any regular payment plan.  The banker sort of expects to see the amount borrowed rise and fall.  The borrower just pays interest on whatever amount is owed and on occasion the bank reviews the overdraft with you.

At that time one pound equaled about 2.2 dollars so this meant that everyone who obtained this credit card received a $16,500 dollar unsecured line of credit. $15,000 was the amount I was charging each member who joined my London office-apartment club!  I immediately saw how to use this to attract overseas investors.

I wanted 50 members at $15,000 each which was double the $375,000 I needed to buy and develop the property. I saw how to turn my customers into my overseas investors.

My head was spinning as I left the bank.  The bank would not give me a $375,000 loan secured by property.  Yet they would lend my buyers of the club the full price of membership on an unsecured basis.  All I needed was get half my buyers right now on a nothing down pre -purchase deal.  This is exactly what I did.  My customers became my overseas investors.

I hustled out, called my customers and offered them this deal they could not refuse.  “Join our club now and you get an American Express gold card.  The bank will lend you the money unsecured for your club membership.  Pay it back when you can.” 

That was a deal that few overseas investors could refuse.

This was a much better deal for me than borrowing the money from overseas investors to start.  The original 25 sales were financed by the bank.  My customers had to pay the money back, not me.

My clients loved me for this deal.  The British pound collapsed shortly after.  That 7,500 loan that created over $15,000 became much less expensive…. barely $10,000.  Those who borrowed made about $5,000 (33%) forex profit on the loan as well as the good real estate deal.

They made such a profit on the currency change I wrote a report about it and earned additional income from the report sales.

In that real example, I used my writing to enhance a real estate deal.  The real estate helped me promote my seminars and sell a report plus I ended up with a income and a wonderful central London house to live in.

There are many multi dimensional real estate opportunities, land that offers a low stress, healthy home, farm income and other profit potential all at the same time.  Merri and I sponsored many Ecuador real estate tours to help readers buy multi dimensional real estate like Ecuador beach farms that provide rentals and farm income.

When investing and business are balanced the building of wealth becomes a more fulfilling, enjoyable process of service.  Great financial rewards are an extra benefit rather than ultimate goals.  Worries about money become less dominant and we gain an inherent power because we want to work harder and longer.  We don’t need to search (and spend) so much for fulfillment and are more likely to excel financially.

Three Layer Financial Plan

Having our own business allows us to operate at peak performance and create a PIEC (Personal Income Earning Corridor).  Having a PIEC business does not mean you should put all your money in just your own business (though at times you may).  Diversification is always good.

PIEC portfolios come in three layers, first the personal business, then a layer of very safe investments over a third, much smaller layer of speculative deals.

The majority of PIEC diversification beyond our business should be in stodgy, liquid investments such as utilities, CDs, bonds and good value equities.

I prefer Country Index ETFs that provide diversification into entire equity markets.  These investments might pay little in the short term, but are safe and they are highly liquid at a known price.  The low return on these investments is acceptable because they support your PIEC business which maximizes profits and adds comfort like few other investments can.

These very safe investments act as reserves if your business hits a sticky patch and can provide ready finance if sudden business opportunities arise.  They also don’t take up much time in research, accounting, watching the market, etc. so you can devote your energy doing what you love (your business).

However, if you genuinely love researching and tracking the market and have the mentality, capital and experience for it, just being an investor can be a wonderful PIEC business in itself.

The third layer of diversification can be speculative because modern portfolio theory suggests that safe investments are enhanced and made safer by adding a small amount of higher risk deals.  This also allows us to fulfill any casino mentality we might have left if having our own business is not enough.

PIEC investing makes it easier to create and keep wealth.  It enhances our lifestyles now, because it lets us make money being who we really are.  It makes life more fulfilling and fun.

Integrating investing and business reduces the risks of placing excessive demands on your savings, especially if we have an anchor of value.

#4: Find your Anchor of Value.

Find your passion.  Knowing ourselves also helps begin a business with a most powerful business tool I call the Golden Rule of Simplicity.  This rule says there are millions of people just like us.  When we truly see ourselves we look into a mirror that reflects an entire market who feel and desire just as we do.  This is a simple rule yet gives us a finely tuned market research system which shows us how to get create our product, get in touch with our market, deliver the product or service and surrounds us with like minded souls.

Self-knowledge is also essential for comfort and comfort is a vital part of everlasting wealth.  When investors are not comfortable, no profit is enough.  Uncomfortable investors have a never-ending thirst for more that cannot be quenched.  This indefatigable desire gums up the money making process.  Amounts don’t matter.  Even investors with incredible assets suffer this never-ending lust.  A well documented example is Bunker Hunt’s huge losses when he speculated in silver in the 1970s.  He had hundreds of millions yet speculated it all to make even more. When is hundreds of millions not enough?

Develop your investment rules.  Whatever your passion you will need to establish your method – the criteria you will use to select shares for your portfolio.

Whatever your preference you need to establish your key criteria.  Once you have your method working well, improvements come from experience and practice – learning from the successes and failures of each and every investment you make.  The quote “The harder I practice, the luckier I get” applies here.

Know when to sell – and when not to.  A key factor in effective portfolio management is to run profits and cut losses.  This is counter-intuitive for most people because it is natural to want to grab a profit and rather unpleasant to realize a loss.

If you run your profits they can become very big.  If you cut your losses they will always be relatively small.

To understand this approach better, let me ask a question.  What if I offered you a free Mercedes Benz?

You would probably say YES… but would be thinking… “What’s the catch?”  That’s good because we all know there is no such thing as a free lunch, much less a free new car.

Would an answer be harder if instead there was a choice, a FREE Mercedes or $4 million bucks (as in US dollars)?

Most would choose the cash.  Yet of course we would still be expecting a catch.  There is a penny to drop, some risk and the need to ignore the thundering herd and an absolute requirement of discipline.

Let me share a true story about how and why an investor in similar circumstances got the Mercedes and had the $4 million, but then lost it.

The story contains three valuable tips.

Once upon a time, 1981 to be exact, there was a recession. An economic and political mess arose across the land.  The story began with unemployment.  In 1981, the US Presidential election was over, the US economy was hurting and the new government and president were turning on the money printing machine.

This was a gloomy time, those early 1980s.  Really.  That was the worst recession since the great depression.

You often hear that the worst recession since the great depression was the great recession of 2007.  This is statistically wrong.  1982 was worse.

The times were dark and this story begins at the end of the 1980 Presidential election when the US economy was at its worst in 50 years and getting worse.

Our hero in the story thought the stock market would recover, despite the fact that everyone thought everything was bleak and black.  He approached his bankers and asked to make some leveraged investments in the stock market.

His goal was to make enough profit to buy a brand new Mercedes Benz.

He opened the account and bought shares. He used those shares as collateral to leverage these investments with borrowed Japanese yen.

His timing was lucky.  The stock market rose quickly.  The Japanese yen collapsed.  His profits shot past his goal to buy the car.

The Fever

Bubble fever had set in so when the hero’s investment manager called with that great news, “You have enough for your new Mercedes“, the investor changed his mind.  “Let it roll,” the investor said.  “I want to make a million instead”.

The investment manager left the portfolio alone and soon the investor’s profit rocketed past 1 million dollars.

The investment manager called.  “You have made a million bucks… perhaps we should take some profits.

Let it roll,” the investor said. “I have decided to make two million instead.”

The investment manager left the portfolio alone and soon the investor’s profit rocketed past 2 million dollars.

The investment manager called.  “You have made two million bucks… perhaps we should take some profits.

Let it roll,” the investor said. “I have decided to make three million instead.”

The investment manager left the portfolio alone and soon the investor’s profit rocketed past 3 million dollars.

The investment manager called.  “You have made three million bucks… really we should take some profits.

Let it roll,“… the investor said. “I have decided to make four million.”

As the portfolio was nearing four million in value the investment manager called.  “You have made almost four million bucks… perhaps we should take some profits.

Let it roll,” the investor said. “I have decided to make four million and enough for a Mercedes.”

Shortly after the stock market corrected and the yen strengthened.  Profits fell so quickly the investor lost a million almost overnight.

The investment manager called.  “You have lost a million bucks… we had better take the profits.

Hold,” the investor said. “The market will come back”.

The stock market fell more and the yen grew stronger.  The profits fell even faster and the investor lost another million.

The investment manager called again.  “You have lost another million bucks… it’s time to take your profits.

Hold,” the investor said. “The market will come back”.

The stock market continued to plummet and the yen rose more.  The investor lost another million.

The investment manager called.  “You have lost three million bucks now…  You really should take the profits left.

Hold,” the investor said. “The market will come back”.

Finally as the market plunged more and profits faded away, the investor, having lost more than 3.5 million, closed his positions and had just enough profit left to buy his new car.

The Mercedez was black and shiny… a big 500 SEL model… king of the road.  The hero never enjoyed it much.

The moral of the story is that when you invest you need a plan, a discipline and to know when to holdem and when to foldem.

Remember that there are always three distinct options – buy, sell and hold.  We’ll look at how to decide when to buy, to sell and to hold later in this report.

Make sure you have some liquidity. You should always keep an eye on the “liquidity”, the ease with which you can sell all or part of your portfolio. If you are invested mainly in big cap stocks you will have little trouble going into cash if necessary.  However, if you have focused on smaller growth shares it makes sense to keep enough of your PIEC portfolio in large companies.

Select shares that can, if necessary, be turned into cash instantly and provide some comfort if the market as a whole turns ugly.

The potential gains on very large companies are not likely to be as high as those from smaller growth companies, but they can and often do well enough to give you a warm feeling.  Remember comfort counts!

Diversify – but not too much.  Your portfolio should contain no fewer than 10 shares, and you could put 10 percent of your money in each of your top selections.  Diversification is essential to reduce risk, but too much of it can hinder performance.

One of the best ways to have huge diversification in a small portfolio is with Country Index ETFs.  These ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country. ETFs do not try to beat the index they represent. The management is passive and tries to emulate the performance of the index.

Most country index ETFs are invested in dozens, often a hundred or more, shares.

For example, the iShares MSCI Australia (symbol EWA) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Australia Index which is composed mainly of large cap and small cap stocks traded primarily on the Australian Stock Exchange mainly of companies in consumer staples, financials and materials. With 72 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in Australia.

A portfolio of a dozen country index ETFs represents diversification to hundreds of shares and a dozen currencies.

Diversifying into countries is safe because countries  generally do not go away, go bankrupt or become challenged by changing technology and altering markets.

Diversifying into countries is also relatively simple because, there is sufficient analysis of global markets so every country’s stock market can be compared and markets of best value included in a safe portfolio.

In addition these valuations do not change quickly.  In 2016 our portfolio of 20 good value country index ETFs had only one change, an addition of the Turkey Index ETF, in the year.

This low volume turnover gives us time to put our focus and energy on our business and the passion we love most.  Studies over decades suggests that this simple slow trading, highly diversified approach increases long term profits and increases safety.

Country ETFs provide massive, good value diversification at a really low cost.

Most passive country index ETFs have minimal cost structures.

#5: Keep costs down. 

High trading costs are one of the biggest drags on the performance of your PIEC portfolio.

There are numerous costs we need to keep an eye on.

Load fees. Avoid back-end and ongoing load. When looking at mutual funds, we’ll typically see them listed as A shares, B shares, and C shares.  All of these share classes have some type of load.  Avoid them.

A shares include a front-end, a guaranteed loss the minute you buy.  B shares come with a back-end load, a guaranteed reduction of any profit or expansion of any loss.  B shares typically charge 5% if they are sold within a specified time (normally five to seven years). There are also higher ongoing operating expenses for B shares. Fund companies typically charge up to an extra 1 percent a year for B share operating expenses.

C shares charge a penalty (usually 1 percent) if a sale is made within the first year.  They also carry higher expense ratios.

12b-1 fees are fees hard to see internal fees that cover a fund’s marketing and distribution costs. Funds can 12b-1 fees to pay brokers incentives for selling their funds. We should watch 12b-1 fees to make sure our broker is advising this fund because it is a good investment, not because he or she is receiving an incentive.

Management fees. We should make sure we get what we pay for, a good manager who makes us feel comfortable by helping build safety and steady performance in our portfolio.

Churning. Some funds and brokers churn, or buy and sell more than is really required.  History suggests that the less activity in a portfolio, the higher the return. Active management is one thing, but funds and brokers can increase their income with excessive transactions that do little or nothing to help us as investors.

Misallocation. Many investors are misallocated for the benefit of the bank or broker.  There are a remarkable array of unnecessarily risky, undiversified portfolios created to generate fees, and that have nothing to do with a client needs. Beware of complex and expensive portfolios full of bits and pieces that are hard to understand. Low transparency can often be associated with high costs.

Expense ratios in fund doesn’t cover all of the costs.  All investors, whether using funds or not face other costs such as brokerage and bid-ask spreads.

Bid-ask spreads for example are subject to market friction.  Markets are liquid because makers standing ready to buy or sell shares at all times.  They are paid by the difference between what they will buy and or sell for.

Shares that have less liquidity, ie.  Not many buyers and sellers, have bigger spreads between buying and selling prices.

Investing in widely held index funds and index ETFs can reduce this cost gap.  Such investments normally trade within fractions of a cent, keeping this this hidden expense in check.

Trading commissions make active trading an expensive way to increase profits. Trading costs sandbag our profits from the start.

Taxes need to also be considered. Buying and selling quickly increases fees and also creates short-term capital gains taxes.

Be careful of margin account as well. Most brokers will let us borrow money (for a fee) so we can leverage our investments.  This increases any profits or losses created, but also adds the interest cost of the leverage.

If we add up all the potential fees, redemption fees, brokerage fees, back-end load fees, management fees, inactivity fees, 12b-1 fees, transfer fees, minimum equity requirement fees, commissions, the cost of limit orders and consultancy costs, before investing.

We should know what all our fees are.

Passive Funds Usually Cost Less. Because reducing costs is a major factor in investment success, low cost passive funds that do not require high cost managers generally out perform managed funds in the long run.

Over a 15 or 25 year period very few managers outperform the respective benchmarks of sectors where they invest by a couple of percentage points.

It’s an easy way to game the stock market, and getting easier by the day.

In Part Two of this report we’ll look at the more speculative end of our PIEC portfolio.

While we are sharing this report, I want to make a special offer, limited to the next three days, that can help you integrate your business and investing.

We offer two courses for attaining financial security.

The first is our “Live Well and Free Anywhere Program”.  The program contains  a series of courses and reports that show ways to earn and be free. These courses and reports are:

  • “International Business Made EZ” course
  • “Self Fulfilled – How to Write to Sell” course
  • Video Workshop by our webmaster David Cross,
  • The entire weekend “Writer’s Camp” in MP3,
  • The report “How to Raise Money Abroad”
  • Report and MP3 Workshop “How to Gain Added Success With Relaxed Concentration”
  • Any updates to any of the courses, workshops, reports or recordings for a year.

You can learn all about this program at How to Have Real Freedom, but do not order the program there for $299 .  If you subscribe to the Purposeful investing Course in the next three days, I’ll send you the program free.

I invite you to join me and a small selective group who for the next year will participate in an intensive program called the Purposeful investing Course (Pi).  The purpose of Pi is finding value to increase the value of and protect our savings, pensions, income and wealth in good times as well as devastating economic conditions.

Learn Slow, Worry Free, Good Value Investing

Stress, worry and fear are three of an investor’s worst enemies.  They create a Behavior Gap, that causes investors to underperform in any market good or bad.  The behavior gap is created by natural human responses to fear.   Pi helps create profitable strategies that avoid losses from this gap.

Lessons from Pi are based on the creation and management of a Primary Pi Model Portfolio, called the Pifolio.  There are no secrets about this portfolio except that it ignores the stories from economic news (often created by someone with vested interests) and is based mainly on good math that reveals the truth through financial news.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets using my (almost) 50 years of global experience and my study of the analysis of four mathematical investing geniuses (and friends).

The Pifolio analysis begins with a continual research of international major stock markets that compares their value based on:

#1:  Current book to price

#2:  Cash flow to price

#3:  Earnings to price

#4:  Average dividend yield

#5:  Return on equity

#6:  Cash flow return

#7:  Market history

We combine the research of several brilliant mathematicians and money managers with my years of investing experience.

This is a complete and continual study of what to do about the movement of international major and emerging stock markets.  I want to share this study throughout 2017 with you.

This analysis forms the basis of a Good Value Stock Market Strategy.  The analysis is rational, mathematical and does not worry about short term ups and downs.  This strategy is easy for anyone to follow and use.  Pi reveals the best value markets and provides contacts to managers and analysts and Country Index ETFs so almost anyone can create and follow their own strategy.

The costs are low and this type of ETF is one of the hardest for institutions to cheat.  Expense ratios for most ETFs are lower than those of the average mutual fund.  Little knowledge, time, management or guesswork are required.  The investment is simply a diversified portfolio of good value indices.  Investments in an index are like investments in all the shares of a good value market.

Pi opens insights to numerous long term cycles that most investors miss because they have not been investing long enough to see them.

For example, in the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  Then the cycle ended.  Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview.  He said:  Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

I did well then, but always thought, “I should have invested more!”  Now those circumstances have come together and I am investing in them again.

The circumstances that created fortunes 30 years ago were an overvalued US market (compared to global markets) and an overvalued US dollar.  The two conditions are in place again!   There are currently ten good value (non US) developed markets,  plus 10 good value emerging markets.

Pi shows how to easily create a diversified, worry free portfolio in some of these good value markets using Country Index ETFs.

The current strength of the US dollar is a second remarkable similarity to 30 years ago.   The dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but when you subscribe to Pi you’ll receive the report, “Three Currency Patterns For 50% Profits or More” FREE.

Plus get the $39.99 report, “The Silver Dip” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80 and has remained near this level, compared to a range of the 230s only two years ago.

These two events are a strong sign to invest in precious metals.

I prepared a special report “Silver Dip 2015” and updated this in 2017.   The report explains the exact conditions you need to make leveraged silver & gold speculations that can increase the returns in a safe portfolio by as much as eight times.  The purpose of the report is to share long term lessons about speculating in precious metals gained through 30 years of speculating and investing in gold and silver.

The low price of silver offers special value now so I want to send you this report because the “Silver Dip 2017” offers enormous profit potential in 2017.

Save $457.95 if You Act Now

Subscribe to the first year of the Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns For 50% Profits or More”, the $27  report “Silver Dip 2015” and the $299 “Live Well and Free Anywhere Program”.

Triple Guarantee

Enroll in Pi.  Get the first monthly issue of Pi and the report “Three Currency Patterns For 50% Profits or More” and the “Live Well and Free Anywhere Program” right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through your own purposeful business and slow, worry free purposeful investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  I guarantee you can keep “Three Currency Patterns for 50% Profits or More” and “Silver Dip 2015” plus the Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.  You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to a Pi annual subscription for $197 and receive all the above.

I am so confident that you’ll gain from this offer that if you are not fully satisfied, simply email me within 60 days for a full refund  and keep the $299 “Live Well and Free Anywhere Program” as my thanks for giving Pi a try.  

ecuador-parade

At times the masses can be fun like in this Cotacachi, Ecuador parade!

Each day when I complete my message, I ask myself, “Is there something here that is interesting… and useful that can help make our readers’ lives better?”

This is why you won’t read a lot of bad global news at our site.  Knowing all the terrible stuff in the world that we cannot do a thing about may be a favorite form of entertainment for the many… but honestly… it is not very useful.   In fact this type of knowledge can be a burden and obstacle.

Plus once one becomes positive enough to overcome the morbid side of life… looking at dead bodies… pain and suffering doesn’t have much kick.   Most news is a waste of time… and time is the one resource we all have… but a resource that is also truly limited.

We live in a universe of unlimited abundance and wisdom.  Yet that infinite wisdom also uses time to make everything go.

Other times the masses can be impossible and… crazy even in the short term.

ecuador-parade

In fact short term it is usually best to avoid the masses. See why at “avoid lines”

ecuador-parade

Long term, the masses bring music into our lives.

To share the inner intelligence we all have we are making Saturday “Mass Share Day”.

I need your questions and… your answers.

Question: Gary, My wife and I have been living in Cuenca for a month and really love it. I have 12k in a 401k back in the states.
I am 57 and could really use your wisdom on what to do with it.  Your insight would be greatly appreciated. George

Answer: Questions of this nature are impossible to answer accurately without more feedback such as “Is there a purpose you have in mind?”…  “How long can the money be invested before it is needed?” etc so I’ll have to make assumptions and assume that this is a long term investment… that this writer has sufficient income to live now… and that this is set aside for producing income later.

There are two elements to ponder.  First, the investment. Second, the tax and legal position.

Re the investment… first of all, do not bring the money to Ecuador… unless you are ging to invest in real estate or an Ecuador business of your own.

I have written about this numerous times… why I do not trust Ecuador banks and… why even if  one does trust them, it is good to live in one country, bank in a second, through a structure in a third.

See several of my articles about this at Ecuador DiversifiedTriple Protection and Ecuador Florida.

Re the investment, if long term is your goal… then how much risk aversion does one have.

There is a struggle between inflationary and deflationary forces at this time.  Falling real estate prices are hugely deflationary.  Unemployment is deflationary. Falling stock prices deflationary.  Lack of consumer confidence is deflationary.

War… debt…. excessive government interference… early retirement… unfunded welfare and Social Security are all inflationary.

The US appears to be following Japan’s model for dealing with the slowed economy… then deflation will win for now.

In times of deflation…. bonds are the best investment… but right now most bonds pay really low returns.. Plus the deflation will eventually turn to inflation and if one misses the shift… bonds will lose purchasing power.

An alternative is to invest in emerging bonds.  They pay a higher income and have shown some great increases.

According to Morningstar there are two high performing, no load, emerging bond funds.

The first of these two bond funds is MFS Emerging Markets Debt.

The Morningstar stats as of June 2010 show the fund up 10.5% this year.

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The portfolio has a fair degree of risk as its quality breakdown shows. This is the price right now for higher income.  The Morningstar data shows that the fund is manly invested in the lower end of investment  grade bonds.

charts

Here are the top ten bonds held in this fund… a bit top heavy in Russia.

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The TCW Emerging Markets Income Fund has performed even better, up 14.77% this year.

charts

This fund’s portfolio has a few safer bonds also. Here is its quality breakdown.

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The bonds this funds hold are quite different to the MFS portfolio.

charts

An investment split into each of these funds would add diversification without giving up opportunity.

The US dollar has been quite strong and there are many reasons why the US dollar will correct.  Now may be a good time to invest in an emerging market bond fund.

When to exit? Watch interest rates in industrialized countries. As long as the central banks keep interest rates near zero…. demand for emerging bonds will grow.  If major market rates start to climb… reassess your position.  Also watch out for bubbles… the market could push these bonds to sub prime loan level.

Re the structure. Though 401 Ks can be extremely complex, I would try to keep this investment as simple as possible.   If the funds are in a 401K… can be left there and… if they can be invested in the funds above or similar bond funds, then why change?   401K investments are protected by pension (ERISA) laws. This includes the additional protection of the funds from garnishment or attachment by creditors or assigned to anyone else, except in the case of domestic relations court cases dealing with divorce decree or child support orders so the extra asset protection is good.

Usually age 59 is the first age when you can withdraw without penalty as well.   However if your investment options are limited to bad investments you could lend the money to yourself and reinvest, etc.

As mentioned, the 401K laws are complex so check with an expert on this which I am not.  A good source of data on 401Ks is at The Investment FAQ.

Next Question: Thank you for writing.  I’ve wired about 500k to Ecuador this year and I wanted to write off what I can.  With other funds, we bought two parcels of land out here in Vilcabamba and they are right next to each other.  My wife and I are very popular in the raw foods movement.  I was thinking to create a retreat center type business where people come to our land to relax, heal and learn about health.   We are in the process of building a 7 bedroom 7 bathroom guest house and this is where they would stay.  I think that there is a lot we can write-off and depreciate if we create a business out here. Additionally, next year we can earn foreign income and get that 87k tax break.  I don’t know how to structure this, do I create a US or Ecuadorian Business?

Answer: You need to speak with two tax professionals… one in Ecuador and one in the US. I have sent you the email addresses of those I use separately.

Have them check a scenario where you operate as a DBA in Ecuador with an overseas travel company registered outside Ecuador and maybe even outside the USA.

Assuming you have US tax concerns, your advisers may find that you gain an advantage in owning and operating the food and house business in your own name.  This will allow you to wrote off all costs and depreciation that reduces your US income tax liability.

Ask them about creating a non Ecuador travel agency that collects reservations and receives a commission thus reducing Ecuador profits and tax liability.

This company can pay you an income… which as long as it is earned income and as you have noted gets reduced by the overseas earned income tax relief. This by the way has risen to $91,500 and is applicable to both husband and wife if both qualify, so could provide $183,000 exemption on foreign earned income.

Let your advisers make sure you qualify for the foreign earned income exclusion either because you work and reside outside the United States or meet either the Bona Fide or Physical Presence tests.

I believe you will find (from your advisers) that you and your wife can earn a salary of up to 91,500 each from your travel company without creating income tax liability.

Plus additional income generated will be reduced by the expenses and depreciation of your housing and food operation (such as employees to help out as well as expenses) in Ecuador.

You may go one step further and find 50% partners for your travel firm in which case you may have a NON controlled foreign corporation.

There are seven levels of corporate structures you can use with international business. One foolproof level for reducing tax is to use a non-controlled foreign corporation.

Learn more about the seven levels of structure at Lesson One of Everlasting Wealth.

Non controlled corporations are explained in detail in my course International Business made EZ. Tomorrow is the last day for you to order this and get my two other courses free.  Enroll here with our extended summer special and save $598.

Next Week’s NEW Questions. Please send your opinions.

Question: Hi Gary, you asked for it!  Your thoughts on the merits of collective wisdom were interesting and in my opinion right on the money.

I believe in the democracy as the best form of government. Direct democracy is for the most part not practical therefore I suppose representative democracy is second best.

In the USA there is considerable “interference” with the purity of this process. Your 1906 example of 800 people judging the weight of the oxen worked because each individual viewed the oxen personally. For US citizens to apply worthwhile collective wisdom in the operation of our country we must each receive similar, accurate information about issues on which we are to make decisions.

I have friends who get all their information from Fox News and have a considerably different view of the world than I do. Other friends get their information from MSNBC and have another view point.

It seems that sustaining all of our “freedoms” will depend on the primary freedom that a modern democracy relies on which is “freedom of the press”. This term should today be “freedom of the media”. Democracy requires a media that presents accurate information without the influence of their corporate owners, reporters, or others, and lets us develop our own opinions.

Today after years of unbridled consolidation, 90% of all US media (TV-Radio-Publishing-online-etc.) is owned by 5 giant entities. All of these five are interested in making money much more than presenting unbiased news.

My question to you is; Can our form of government long exist when our collective wisdom is constantly bombarded with information tainted with opinion which supports a prejudiced view point, instead of neutral, impartial reporting by journalists dedicated to the truth as they witness it or discover it through investigation?

Question: I wish I had sufficient cash flow to finance my life without debt but alas that is not the case.  Can debt be beneficial sometimes?  I have a lot of real estate debt but I always make sure that I keep it in control.  In my financial statement I have a line item for my overall debt ratio.  37.8% at the moment.  I also make sure that my debt is for things that pay me.  Cash flowing real estate.  I insist on a minimum 20% cash on cash return, and usually make much more.

But here is my question.  The US government has a real debt problem which they will need to “solve”.  Probably with higher inflation.  So isn’t it beneficial for me to have the same “problem” so they can inflate away my debt too?  Note that I have no car or credit card  debt.

Question… Actually Comment.

Gary –  Re “The Wisdom of Crowds” – As with other pop-psych and pop-economics books, I had a lot of problems with this book (not least because it conflates a “crowd” with a “flock”. Also, the “wisdom” contradicts many of the points in your own living and investment strategies.

That said, I agree that a blog with the experiences – bad as well as good – of expats is a great idea. Don’t know if you follow Gringo Tree, but the reports of expats lasting 6 months or less before giving up and going home are tragic. Advice when you’re making a major move – even within the US – is give it at least 2 years. No matter where you go, things are really different from what you are used to. In my own case, when I moved from NYC to Seattle, I did give it 2 years at the end of which I realized I would never fit into the Pacific NW and came back to NY.

Although there is no way to prepare for the huge changes of a major move, people need to realize that things will be different, that not all the differences will be wonderful, and it’s they who will have to adapt not the place to which they are going.

Karen J-B

New Question.

I will answer these next week but want your input as well. If you have thoughts or experience that can help answer these questions… send them to me.

Good Morning, Gary:

This morning’s article on the 99’ers was revealing and chilling. I am especially blessed because I was career military under the “old plan”: 50%
of base pay at the highest rank I held. That and early collection of Social Security for my wife and I keeps us relatively comfortable–for the
present. Frankly, I have an ominous feeling that these benefits may be cut or lost at some point. That is a major reason why your information on
international living alternatives, is of great interest to me.

Here’s my question. I have some debt from a surgery a few years ago and some failed business attempts–less than $10k US. Of course, there’s the
note on the car. Do you have to be debt-free to make the move to Ecuador, Mexico or wherever? Would it make sense to pay off the debt faster by
taking advantage of the lower living expenses overseas.

Send your opinions and or questions!

Gary

How We Can Serve You

How to Have Real Safety

Regain Real Security

There is a path to true security.

I was reminded of this once when I made a horrible mistake.  Almost!

The supposed error?  Letting my mind wander six decades back to an hour I spent with a girl.

Learn from this near disaster, seven most powerful sources of wealth, health, security and fulfillment in this era.

The girl was pretty and blond.  Terry was her name. My imagination spanned decades returning to my Oregon roots seeing her as if she were there.

We were 11 or 12 and had known each other since we started Rockwood grade school.  Just buddies, our non-romantic friendship lasted 12 years, from first grade till high school’s end.  Then she went off to Pepperdine College in California.  I started traveling the world.  Never saw her again.  I hope her life has gone well.  But until that reflection I’d never thought much of Terry in so many years.

What could have been the tragic error was letting that memory touch my heart.  Two kids, walking on a crisp, Pacific Northwest autumnal afternoon.

We walked down a sun filled, pine needle covered, dirt path.  Huge, fat, green Douglas firs lined the road.  Traffic was no problem, not many cars.  Crossing Stark Street we turned left, hiking three blocks to 182nd.  There we passed an old clapboard candy store.  I can still hear the wooden sidewalk of that store slap beneath my feet, felt the soggy planks sag and smelled astringent pitch from the fir trees.  Then we turned right, up 182nd for about a mile.  There was Terry’s house.

I carried on, walking through a big field, waist high grass turned straw brown by an early frost.  There were dozens of paths made by who knows what.  Animals perhaps or countless generations of other kids walking home alone from school.  I chose one following it to another wood of tall, rough-barked fir.  Crossing one more field, I climbed a rock wall, struggled through a barbed wire fence (my Mom hated that fence ripping my jeans).  I was home!

Sweet simplicity, that dream.  Two kids holding hands, walking on a dirt trail under a crisp, but blue, sunny sky.  Pure innocence.

My tragic error was looking back.  I returned to Rockwood, Oregon with Merri and my kids to show them this part of their roots.  Following the route, Terry and I had walked were the candy store, grange hall, old wooden buildings and their home spun honesty and charm.

Instead we found six lanes of fast, frantic traffic and road rage.  McDonalds, KFC, strip shopping centers.  The car radio blared warnings of local gangs and drive-by-shootings. Beauty, innocence, sweet simplicity, replaced by drive ins and drive bys.  Gangs and drive-by shootings replacing a tender walk in the sun.  Good bye memories, good bye.

How can our kids walk in places like this?  How can we return to those old feeling of security and comfort?

How can any of us possibly keep pace in this world that’s moving so fast?  Then something inside snapped. “There has to be an answer for honest, hard working folks to enjoy the wonderful opportunities of today and regain what we’ve lost over the past forty years”, I swore to myself.

How can we keep up, without having such a fast paced life we turn into machines?  Where do we find time for God, family, charity, and our friends?  How can we rediscover those sun filled, pine needle covered, dirt paths we want to walk?

“There has to be places that are still innocent and pure”, I thought.  “There has to be a way of life that does not pound us with stress”.

This thinking led me to begin reviewing the thousands of economic and business experiences I have shared with readers over the decades.  This started a search for a simpler way of life and a better place to earn and protect our wealth.

By digging, asking and observing, traveling and talking to investors and investment managers all over the world I found that there are true paths to real security in the here and now.  That knowledge helped me develop courses on how to have natural health, everlasting wealth and purposeful investments.

This knowledge helped Merri and me invest in stocks and real estate all over the world.  It helped us find and develop Merrily Farms into a sanctuary here on Little Horse Creek.

That almost error led us to create an entire portfolio of information on how to keep pace, get ahead, enjoy our modern society but, to enjoy life wherever you choose without having to move too fast.

This is why I am making a special three day “Let’s get our lives back offer”.

“What would you think in the last 30 seconds of your life if you were the richest man in the world but were unhappy?”

This quote is from the opening slide of our Value Investing Seminar, “How to Secure Your Future With a Value Breakout Plan”.   This a vital question because few investors think about the value of comfort and happiness.  Yet the truth is, those who are comfortable and happy with their investments are most likely to make good investment, business and lifestyle decisions.

Without comfort, no matter how much money a person has changes are, they’ll eventually lose it or kill themselves with stress from worry.

There is a way to have the perfect form of financial security.  Let’s call it the perfect pension.  To help understand how to build an unshakable economic platform, here is Part One of the report, The Pruppie Factor.

The Pruppie Factor – Seven Steps to Comfortable Living & Profits.

“May you live in interesting times”.  That’s a Chinese curse that seems to have been cast on our modern world.  We can enjoy comfort and profits in the year ahead despite this fact.

Become a Pruppie.  Integrate your earning with your investing and enjoy peak living, everlasting wealth and natural health with PIEC Investing in the year ahead.

Before we look at what PIEC means, let’s delve into Pruppieism, the new economic and social realism.  Pruppies expect everything to expand.  They take advantage of every new benefit and technology they can.  Pruppies enjoy using the fruits of our ancestor’s deliberations and labors to earn in this advanced technological world.  They also engage in activity that they love that would sustain them in case society and the incredibly intricate weave of our global economy and society should fail.

Pruppies are prepared in case everything, everywhere, or at least everything relating to their income and savings fails and the fabric that surrounds their lives disintegrates into an unknown veil.  Yet a Pruppie’s preparation is not a sacrifice, but a joy as you will see.

Hope springs eternal and it should.  One of the key themes in my first book, Passport to International Profit, (published in the 1970s) was “The Sun Always Shines Somewhere”.  This thought has been in and remains a foundation of everything I do.

Sometimes this sunshine is hard to see because the press always focuses on doom and gloom.  Current news often makes the world seem about to end.  We cannot blame the press. Bad news sells.  The majority seem to want to worry instead of learn about all that’s good.  This does not make doom and gloom right.  This is why the majority are also the rich portion of the population, but bad news is an economic fact for the press.

Yet despite all the negative headlines, we have lived through the Cold War and MAD, Y2K, GridX II, the Peak Oil Crisis, the recession of the 1970s, 1980s 2007, etc. etc. etc.  Chicken Little is always out there, selling the falling sky.  Don’t buy into this story!

History suggests that there will always be opportunity.  The sun always shines somewhere.

Brexit, global warming and the election of Donald trump as President of the United States are 2016 examples of how the press gravitates to negative news.  These three events may be bad news or not.  The future will tell, but they are examples of how the media focuses on tiny parts of our infinite existence.  They can make anything and just about everything seem negative.  This can blind us to the positive realities ahead, if we let it.  Don’t.  Expect that the world will remain standing and look for opportunity instead!

Our wealth and economic opportunity is pushed by supply and demand.  We are part of a growing global population.  New technology makes more people, as a whole, more productive every day.  The world has increasingly larger markets creating more supply in increasingly efficient ways.

This reality increases everyone’s wealth.  Yes there is a lot of bad news in many places.  There is inequality.  There is crime.  There is war and hate and injustice.   Despite these negatives there is even more that is positive.  Opportunity grows.

Pruppies tap into and use every bit of the good news they can.  They have a plan B if everything goes wrong, but Plan B is based on something a Pruppie wants to do we love, not just a shelter from bad news.

At the end of this report, you’ll find three day special offer that can help you integrate earning and investing for the ultimate form of profit and safety.

Imagine this example of Pruppism.  The Tiffany lamp casts an amber glow, rich, ivory and warm in the grey gloom of early dusk.  The gold knobbed mahogany desk, its deep patina waxed and smooth, shines with reflections of ancient leather Chesterfields stuffed full, but rumpled with age and of maritime shots that hang in brass frames on the wall. The room speaks of settled tradition, the kind that might never end.  But thoughts instead are on the demise of the business that has supported this room.

The late Jim Slater of Slater Walker, a British industrial conglomerate turned bank in the 1970s was in that room.  I recall his bank’s collapse well as I was living in Hong Kong and Slater Walker was a huge going concern in what was a British colony in those days.  The Slater Walker crash was big news that unsettled the entire British banking system at the time.

Slater, the founder, had been a really high roller, using every modern banking tactic available including buying many assets with cheap loans.  Then in the mid 1970s banking crisis interest rates skyrocketed and his bank was unable to refinance its debt.  The company failed and Slater had to resign.  Numerous charges were brought against him and he spent considerable time defending what he had done.

In the end he was only fined a nominal sum but despite this, his banking career was well and truly dead.

However he had already moved on.

He wrote about this in his autobiography, “Return To Go”.  He had always had a hobby making puppet shows and telling stories to his children, so instead of banking, he turned his passion into profit and wrote some children’s books.  His first effort sold a respectable 35,000 copies.  His next a monster series for younger children, became a huge hit.

He had also maintained a hobby of salmon fishing so again turned his passion into profit by creating a business that bought up fishing rights and resold them as time-shares.  He had quite a success.

Some day a catastrophe beyond our control could redirect the course of our lives.  We might lose a job, learn that our pension won’t pay or that our dollars won’t buy as much as they must.

Though Jim Slater was a banker, outside economic forces beyond his control caused his business disaster.  Yet he had options because he had been doing things he loved that were not related to his banking, but could become useful income generators in difficult time.

I do not know if Slater understood Pruppism but that’s what he was practicing.

Pruppism is a positive realism based on the knowledge that much of our lives are directed by events that we do not know or expect and could not change them even if we did.  There is always something we do not know and that’s okay.

Years ago I was speaking at an investing seminar in Marbella Spain.  One of the speakers was a brilliant strategist, Johan Peter Paludan, of the Copenhagen Institute for Futures Studies.  This institute has a large interdisciplinary staff with expertise in economics, political science, ethnography, psychology, engineering, PR and sociology.  They identify and analyze global trends that influence the future.  Paludan was speaking of these trends and answering questions that delegates had about the world’s economic future.

One delegate asked what to do if there was a global nuclear exchange.  Paludan replied that the results of some events are so unpredictable that it is not worth trying to plan for them.

This thought has stuck with me for decades because it helped me realize that no matter how cautious, how defensive and careful we are, there are events that we cannot even imagine that can turn our lives upside down, for the good or bad.  With this in mind my wife Merri and I have created a lifestyle where we turn our passions into profit but in a way that whatever happens we are likely to be in a position to spot the positive and the opportunity.

A PIEC Experience

Pruppies gain the benefits of PIEC wealth.  PIEC is an acronym for “Personal Income Earning Corridor”.  PIEC income and wealth come from doing what you do for love, rather than just the money.

Traditionally people get jobs to create income.  They work to live and support their lifestyle while attempting to spend less than they earn.  They hope, that maybe the savings will bring, sometime in the future, a lifestyle of doing something enjoyable without work.

Pruppies reverse the priorities.  Instead of working for money to save and invest, they focus their prime effort on doing something they enjoy right now.  Then they learn how to enjoy the effort in some profitable way.  They learn to create “Avenues of Abundance” that combine lifestyle with the necessary task of accumulating wealth.

If economic circumstances tie them to an existing income effort, they create hobbies that are income producers of the future.

For example, if a Pruppie loves golf; instead of working six days a week, 50 weeks a year just to golf on Sundays and during short vacations, instead he or she will create a business in some aspect of the golfing trade.

In another example, a client of mine, who loved animals became a vet.  But he learned that the vet’s lifestyle was not one he enjoyed.  He wanted to travel and move around, which is difficult for a professional who needs to stay at his office and build a practice.  So he built a business that prepares special animal foods for race horses.  Now he travels globally visiting horse breeders and makes much more money as well.

Pruppies combine money with time, energy and desires.  They generate income doing something desired.  Desire and fulfillment become at least as, if not more, important as the money.

#1: Do What You Love!

The reason PIECs work well is that when we love to do something, we do it better, for longer and with greater enthusiasm.

Effort, determination and tenacity are wealth building attributes that cannot fail.  Yet Pruppism does not mean we should suddenly abandon our jobs and try becoming golf pros, when we have never been able to break 100.  Smart Pruppies start small and gradually expand into their passion.

For example, as a writer and lecturer, I was never fully satisfied sitting behind a desk or standing on a podium all day long, even though I was making over a million bucks a year. I’m the physical, outdoors type and yearned for exercise and the wilds of the deep woods. “What good’s the money if this isn’t fun?” I often asked myself.

Rather than quit writing and teaching, I looked for ways to combine these professions with the outdoor life.  Through research I learned that many city folk like myself yearn to be in the primitive outdoors.  So I bought an isolated farm high in the Blue Ridge Mountains and an Andean plantation high in Ecuador where I developed seminar centers with charming but simple dwellings, set in rustic surroundings, with clean water and pure air.  Now I live in nature so after I finish the writing or talking, I can walk in the woods or take my axe and chop firewood or something physical.  I’ve combined my writing with physical work and have blended the life I want, with my readers’ needs in a way that makes great financial sense.

We built a series of cabins in the wild that bring more profits than most stocks or bonds could ever return.

The process took six years to shift. Now we have been at this for nearly two decades and we are far from finished.  But while doing what we love, who cares? This is one of the great benefits of PIEC investing. We can slow down and enjoy the work instead of always rushing ahead, looking for something more.

Those who work nine to five can start PIEC businesses part time if they are too uneasy to quit their jobs. Others, who like myself, already have a business can slowly shift their product or service in a sensible way and let it evolve toward their PIEC.

But where do we start?

There is a seven step process we can all use whether we have our own careers, a business or even if we are retired (PIEC investing is especially good for retired folks who have found the supposed good life flat or financially short).

The first step is to get a clear idea or vision of our dream.  This is sometimes harder to achieve than it seems.  We are so deluged with false ideals from Washington, Wall Street, Madison Avenue, etc. that we have to stop and really take stock.  What do we sincerely want?

There is a very practical economic reason to look inwards for wealth.  Warren Buffet recommends that we only invest in what we understand. What can we understand better than ourselves?

This inner search will lead us to an ideal that begins the second step which is gaining enthusiasm.  How can we be anything but enthusiastic about finally fulfilling our deepest dreams?  The enthusiasm leads to the third step; gaining an education.

We need to find out everything we can about our idea.  To succeed we must take the third step and become real experts in the product or service we offer.

Fourth, this educational process allows us to develop an intelligent, focused business plan we can act upon and the action is the fifth step which brings us the experience. Experience gives us the sixth step, a financial loss or profit.  We always profit in increased knowledge which creates the seventh step, more ideas.

Then the entire cycle starts all over again: Idea, Enthusiasm, Education, Action, Experience, Financial Profit and New Ideas.

This is a way to keep adding new opportunities into our lives.  Business is rarely static. It is an ever evolving process instead.

This seven step cycle may take days, weeks, months or years, but the moment you begin you’ll start moving into an avenue of affluence where you love your work so though money isn’t your main goal it comes more easily.

#2: Do what you love, but also be of service.  Do something for others that is meaningful and important to you.

We all have a purpose in life and when we are filling it, we feel fulfilled.  Wealth and fulfillment is the goal.  Fulfillment is important because of the law of diminishing returns.  A 2008 study that analyzed Gallup surveys of 450,000 Americans suggested that day-to-day contentment improves until income hits around $75,000 per annum.  After that, more money just brings more stuff, with far less gain in happiness.  Income beyond $75,000 does not do much for a person’s daily mood.

This is a pretty general study and regional differences in costs, inflation and life circumstances will create many fluctuations from this norm, but the point is when money is the main goal, the better you get, the harder it will be to gain satisfaction.

Giving, on the other hand, never has limitations, especially when the giving helps complete a purpose that is part of our destiny.

This is true in business and investing.  A study of investors for example found that investors with socially responsible ideals gained the best returns.  A dual goal of profit and achieving some social benefit provides a purpose beyond returns.  This brings comfort and determination to the investments and the added stick-to-it-ness helps increase profits.

The financial giant State Street Corporation’s Center for Applied Research did an 18 month study of 7,000 investors to get a better understanding of the role incentives play in making investment decisions.  Based on this study a new measure of investment performance called “Phi” was created.  Portfolios were previous rated by their Alpha, Beta, and Gamma. Phi is the newest measure of performance.

Alpha measures an investment’s performance against a market index.  If the Standard & Poor’s 500-stock index is up 10 percent and a mutual fund is up 15 percent, for example, that 5 percentage point difference is alpha.

Beta is the return of any given market.  And charting beta is what a passive index fund does.  Comparing different indexes’ beta — say domestic equities and international bonds — helps investors in deciding how to allocate their investments.

Gamma is a measure of the impact on returns of more intelligent financial planning decisions.  A Gamma rating quantifies the additional value that can be achieved by optimal asset allocation, a dynamic withdrawal strategy, incorporating guaranteed income products (i.e., annuities), tax-efficient decisions, and liability-relative asset allocation optimization.

What phi aims to add is a way for investors to quantify how their motivations — or those of the people managing their money — will affect long-term investment returns.

The study examined what motivates a person to invest — or not and found that main investment motivations are market-based motives, the most frequent and powerful being fear in the market.  Both market motivations, the prospect of profit and the fear of loss, can have a negative effect on long-term performance.

A deep sense of purpose is what causes a high phi score.  A high phi factor is not about outperforming markets or peers, and it’s not an asset-gathering measure of performance.  Pi performance is defined as sustainable investing with a deeper sense of purpose.

People who invested with socially responsible ideals did best in the study.  The dual goal of profit and achieving some social benefit provides a purpose beyond returns.  This brings comfort and determination to the investments.

The study helped define three aspects of investing that are generally ignored, purpose, habits and incentives.

Purpose.  Purpose requires some soul-searching questions about what we each want our life to be.  This purpose is more important than the investment goal.  The purpose of the money we have becomes more important than the amount in the portfolio.

Habits.  Habits come next because we need to create habits and routines that keep us on the path of our unique purpose.  The marketplace does all it can to distract us from our goals.  There is an endless stream of news, rumor, conjecture, facts figures, ideas and tactics generated by every part of every stock market aimed at getting us to act in ways that benefit the agenda of others.

Habits help us avoid being distracted from what we are meant and want to do.  The muffle the noise of Madison Avenue, the spin from Washington DC and the hidden agendas of big business.

Incentive.  Changing incentives to accomplish a purpose instead of a numerical (percentage or profit) goal helps us adopt better behavior.  We react to accomplishing our meaningful purpose instead of drama created by media as well as manipulation and short term whims in markets.

The study showed that changing incentives in this way improved phi when they had a meaningful impact on a person’s investment strategy.

The study found these facts: Every one-point increase in people’s orientation toward investment goals with a purpose — and the scale is 0 to 3 — equated to 42 percent greater odds that the investors know what they are paying in fees, 37 percent greater odds that investors are not rejecting their financial adviser, 38 percent greater odds that the people consider investing in socially responsible investments and 79 percent greater odds that investors will trade less frequently, the research found.

As in so many others cases, two of the most important factors of success are keeping costs and trading activity low.  These are among the most powerful ways to increase wealth.  Having greater fulfillment as well as more wealth is a bonus that Pruppies call “Everlasting Wealth”.

Figure out what is really important in life for you and then find ways to invest in that purpose.  When you do, you’ll be on a solid path to everlasting wealth that is not so easily diverted by the daily drama that seems to be unfolding in the modern world.

Learn to focus your investments using purpose as the most important investment goal.  The purpose of money becomes more important than the amount.

Learn how to create habits and routines that keep us on the path of our unique purpose.  The market will do all it can to distract us from our goals.  Understand that many banks, brokers, the media, the government and commerce all have agendas to take our money, not make more for us.   Good wealth habits and routines protect us from this.

#3: Integrate your earning and investing. 

Long term success in business and investing are determined by control and comfort.

Comfort comes from feeling in control, but since there is always something we do not know, real comfort comes from knowing that we are serving a valuable purpose, the best we can, regardless of how events unfold.

Real comfort helps maintain determination, dedication and enthusiasm, all among the most vital parts in the process of succeeding in investing and business.

Our own business increases comfort because a business is simply an investment that gives us more control due to the addition of our own time and energy. 

A Personal Income Earning Corridor (PIEC) begin with a main income generator that we control.  For some this is a job with a salary.  For others it is a pension. For many it is their own business.

Integration of business and investing is important because investments are not always good income generators.

Years ago I managed an investment portfolio for Canada’s largest private investment management firm.  One day, during lunch with the president of the firm, we discussed the difficulties of professional fund management.  He explained that one of his biggest problems was the excessive expectation of customers.

“I have a retired client who has a million dollars”, he said.  “The client wants $90,000 a year to live on.  In a good year, we might earn 11%.  The client can take 9%. Our fee is 1% and the client’s fund increase by 1%.  In a bad year, we might earn 5%. The client takes 9%.  Our fee is 1% and the client’s funds drop by $50,000.  In the next year the client has even less to work with so a withdrawal of $90,000 may be more than 9% of the portfolio.  The client tends to take even more in good years, but never reduces the demand in bad years.”

The number one golden rule of investing is that there is always something we do not know.  Risk is always our partner.  When we invest, there is always potential that will negatively affect our financial welfare.  Our investments might rise or fall because of market conditions (market risk).  Corporate decisions, such as whether to expand into a new area of business or merge with another company, can affect the value of our investments (business risk).  If we own an international investment, events within that country can affect our investment.  There is both political and currency risk.  There is liquidity risk because we may need to draw on an investment at a time when it price is low.

Plus there are broken promises.

We live in an era of broken promises.  Defaults could ruin most average retirees and even investors.

A look at government, social and currency breakdown at its worst can help us see the problem.  Germany is an example when it borrowed heavily to pay WWI costs.  Such borrowing almost always leads to currency and social erosion and this did then.  Right after the war there was some stability, before government spending began to run wild.  By 1923, it reached the worst in history.  This caused prices to sometimes double in hours. In Germany by late 1923 it took 200 billion marks to buy a loaf of bread.

Hard-working people with modest spending habits could not even buy a postage stamp with their life savings.  All debt was wiped out but so too were all savings.

Salaries were paid three times a day yet shops were empty.  Food riots raged. Businesses closed down, unemployment soared.  The economy collapsed.

Anyone on a fixed income was destitute.  They sold everything just to buy food.

Small businesses however survived because they could hold material things such as clothing, food, anything people could consume. 

Recent news about Social Security, pensions and health care shows that the US government has excessive debt today and that we as individuals need tactics to make sure, when governments, pensions and insurers weasel out of their promises, that we can take care of ourselves.

One big broken promise is Social Security and Medicare.  The most recent Social Security trustee report shows that the programs will begin to spend more than they earn within just three or four years.   The Medicare hospital-insurance trust fund, could use all its reserves by 2028.  They face insolvency over the next 20 years because Social Security runs totally out of money by 2034.

This is a bigger problem then it may seem because it creates an even bigger broken promise concerning the US dollar.

Medicare and Social Security already account for 41% of federal spending.  That was the expenditure last year.  This is not a static problem.  Each year that percentage is growing worse.  This creates a special risk for the dollar because Social Security’s reserves are not really assets at all.  The purported assets are simply IOUs from the US government.

Social Security assets are a liability of the government, so eventually the money comes from the same place as all other government expenditure, taxes or federal debt.  This means that if Social Security has to sell an asset, then the government, already overburdened by debt, will have to borrow the money from somewhere else.

If the Fed cannot raise enough money to pay Social Security only two options are left, devalue the greenback or don’t pay.

When Social Security was established in 1935, the President and Congress imposed taxes to pay the promised benefits. Thirty years later politics had changed.  When Medicare was established in 1965, the government took credit for the popular health coverage but left the payment problem for future generations.

President Nixon and Congress also enjoyed the popularity of they increased Social Security benefits  in the 1970s but left future generations the bill.

The public has not been fooled.  A survey in 1964 found that 77% of the population answered yes to the question “Do you trust the government to do the right thing “just about always” or “most of the time”.  Only 19% answered yes in 2015 according to Pew Research.

Yet what can individuals do other than what we have, voting in new administrations?

Voters attempted to create change in 2008 with a new administration.  The election process and result of 2016 suggests they were no pleased with the results. 2017 and beyond may be “interesting” years.

There should be little wonder that Americans have stopped trusting politicians who promise benefits to get and remain elected but leave the burdens of paying for the promises to pile up waiting to sink the next administration.

This problem has grown so large that in 2011 Federal Reserve Chairman Ben Bernanke “maintaining the status quo is not an option. Creditors will not lend to a government whose debt, relative to national income, is rising without limit.”

In 2014 Federal Reserve Chair Janet Yellen told Congress that more work must be done “to put fiscal policy on a sustainable course.”

If the government does not resolve this problem soon, then the world of lenders will.  If the US has to raise interest rates to continue attracting loans, a downward spiral will grow.  Higher rates create greater debt and greater debt demands higher interest payments. The costs will be catastrophic.  As investors flee US bonds and T-Bills for safer investment, the US dollar will lose purchasing power.

Social Security, if paid and even if paid in the same amounts as before, will buy less.  If Medicare stops working then all that’s left for backup is Obamacare and the private insurers in the plan.

This is another broken promise.  When United Health Group, the nation’s largest health insurer, recently announced that it was pulling out of Obamacare insurance the public learned that it will face higher premiums.  Many will need to choose a new plan, change doctors and hospitals as well.  United Health is not the first or only insurer to quit. A dozen nonprofit health insurance cooperatives shut down just last year.  The giants Aetna and Blue Cross Blue Shield are even considering a drop out.

If Social Security and health care promises are broken that just leaves our pensions. Right?

Yet if we look at the Pensionrights.org website we see hundreds of corporations that have reduced pension benefits including the likes of Honda Motor Co., Ltd., Allstate Corp., Coca Cola, Boeing, Caterpillar, Kraft Foods, Hewlett Packard, Fedex GM and GE to name a few of over a hundred.

This problem is not limited to corporate pension.  An Economic Budget Issue Brief issued to Congress from the CBO (Congressional Budget office”) says:

“By any measure, nearly all state and local pension plans are underfunded, which means that the value of the plans’ assets is less than their accrued pension liabilities for current workers and retirees” CBO.

The report shows that even five years ago the short fall of State and Local Pensions was over 3 trillion dollars, more than all other state and local debt

That leaves the Pension Benefit Guaranty Corporation (PBGC) as a safety net.  In the 2015 PBGC’s annual report the Director’s message says:  “One of the most important functions of PBGC is assuming responsibility for pension plans when their sponsors can no longer keep them going.  We insure the benefits of more than 40 million workers and retirees.  Currently, we pay more than 800,000 people each month.  An additional 585,000 workers are scheduled to receive benefits from PBGC when they retire.”

But if you look at the first paragraph of the Financial Report in that annual report you see:

“PBGC’s combined financial position decreased by $14,577 million, increasing the Corporation’s combined deficit (net position) to $76,349 million as of September 30, 2015 an all time record high from  $61,772 million as of September 30, 2014”.

Every step along the way we see shortfalls, debt with little hope of repayment and an economic overhang that will eventually create broken promises at every level from the pensions, healthcare, Social Security and most from a falling US dollar.

These facts will ruin the life styles of millions, but not all.

In short, there is risk in even the safest investments and there is a possibility that a negative financial outcome might occur.

This is why multi dimensional business opportunities make sense.  You can profit from expanding your utility.  The US currency may fall but your business can offer valuable, needed services or products that will be worth more than gold.

You can gain from having a source of income in a place where you have the best chances of control.  This is why for centuries… small business have had a home upstairs and business below, so the owner could control their business.

Those who profit most in changing times are those who add new dimensions to old time proven ways.  Modern technology offers many exciting ways to create multi dimensional profit and can earn income at home.

When you have your own business, you reduce the need to place excessive demands on your savings and you reduce the risks of broken promises especially when your have a multi dimensional business with multiple streams of income.

At the end of this report, you’ll find three day special offer that can help you integrate multiple streams of income and investing for the ultimate form of profit and safety.

Merri and I aim to create multi dimensional opportunity wherever we live.

In Florida we bought a house and an orange grove next door.  Then we added a rental unit.

In North Carolina we bought a farm, then we added a seminar center, rental units and a trout raising business.

Products and services of essentials, food, clothing, shelter, protection and good health are the real golden assets in the worst times.

Imagine the scenario where our entire structure melts down.  “See the man who has just come in to get some milk for his family.  He stares at the rows for canned milk.  They were empty. Cleaned out.  He closes his eyes.  The world spins.  He snaps his eyes open and checked the rows again.  They are still empty.  He feels oddly betrayed.  Grocery stores are the supports of life.  When you need something you come here.  This is a fact of life in today’s world.  How can he not take this for granted.

“He rushes to the dairy case.  That’s empty too.  He runs to other shelves and sees shoppers piling up food, any food they can grab, throwing entire rows into their carts.  He is pushed and shoved in a mad rush to take any remaining food.

“The man speeds off to the nearest Dollar Store but finds the parking lot filled, lines waiting just to get in the door.”

Just one disruption in the supply line and in a day, the stores were empty. Our modern world is so intricately connected and stores operate on a just-in-time inventory control system.  When you buy anything a computer orders more and it comes next shipment, next day. One glitch in this complex system, one short break and the shelves rapidly go empty.  The barer the shelves, the faster everything goes.

Yesterday everything had been normal. Suddenly there was no milk anywhere.

The man’s tale is imaginary, but the fabric behind it is not, as the real story below shows.

In September and November of 2016, the Colonial pipeline that supplies millions of people with gasoline was shut down.

In November, one simple error caused the disruption.  A track hoe digging for utilities accidentally struck the pipeline, ignited gasoline and caused an explosion.

In September there was a leak (over a quarter million gallons of gas) that caused the disruption.  While shut down, so many people rushed to the gas station to fill up that it created a panic and shortage.

I spoke with the owner of the local gas station we use. He said people were lining up to fill their cars, gas cans and even large tanks in pickups.  He had to limit sales.

A shortage of just about any essential quickly creates panic.  In the pipeline disruptions motorists running to gas stations deviated from their normal consumption habits at the pump and quickly exhausted existing supplies.

There was still plenty of gasoline, but the ability to transport the product to North Carolina (and four other states) was restricted.  Loss of common sense, civility and safety flew out the window within hours.

This was despite the good news that there are two pipes that run side-by-side.  Only one was ruptured, so the disruption was not as bad as it could be.

The September leak, just one small problem in just one pipeline led to days of dry pumps and higher gas prices in Alabama, Georgia, Tennessee and the Carolinas while repairs were made.

Five states are so dependent on just two side by side  pipelines that their shutdown can create panic for millions of people in under one day.

Merri and I make each of our houses multi dimensional…a home and a source of income from some essential product.

Governments are going further into debt globally.  This creates serious debt and economic problems everywhere.  These burdens mean that governments and societies lose their ability to keep their promises.  Multi dimensional earnings can help overcome the risks these conditions create.

Our website has long shared the idea of multi dimensional business, investing and living.  We have looked at the idea of living as a landlord or the idea of multi dimensional writing and farming or Ecuador farming with B&B, plus Ecuador B&Bs on the beach or in the Amazon to name a few.

Multi dimensional opportunity earns in numerous ways.

Merri and I have always created multi dimensional opportunity in our global travels.  We have united self publishing, seminars, tours, real estate, teaching, currencies, investing and real estate to enhance our income and living.  For example in London we converted a house into an office and bedroom time share. We found special currency deals that helped.

I came across this (one of my first) multi dimensional opportunities when I wanted to finance a house purchase in London.  My business plan was to create a small office-apartment complex.  I would live in part of the house, have an office in part that I would share with a number of my readers.  The deal was aimed at helping overseas businesses people have an office and a place to stay when they were in London.  I set up a club something like a timeshare.  Not quite a timeshare but close enough.

My track record with the bank was good and I had always repaid loans.  Yet the policy at that bank was “timeshares are no-nos”.  I could almost see the glaze come over my bank manager’s eyes as I explained the project.  It was the look that said “No matter what you say, the answer will be NO”.  Once a manager thinks that what you want is against company policy, it is better to do something realistic like climb Mount Everest on a lunch break.  I come from a family of modest means and had no relatives or friends with the cash to start the deal so my alternative was to find overseas investors.

After making the necessary polite motions with my banker and letting him do likewise, I thanked him for his time and was preparing to leave.

Then he said, “By the way let me show you our new American Express Gold Card plan”.  The bank had just started to offer credit cards and they came with a 7,500 pound unsecured overdraft.  He told me that overseas investors could have these as well as local investors and customers.

Overdrafts are a peculiarly British line of credit that allows you to borrow up to the limit of the overdraft without any regular payment plan.  The banker sort of expects to see the amount borrowed rise and fall.  The borrower just pays interest on whatever amount is owed and on occasion the bank reviews the overdraft with you.

At that time one pound equaled about 2.2 dollars so this meant that everyone who obtained this credit card received a $16,500 dollar unsecured line of credit. $15,000 was the amount I was charging each member who joined my London office-apartment club!  I immediately saw how to use this to attract overseas investors.

I wanted 50 members at $15,000 each which was double the $375,000 I needed to buy and develop the property. I saw how to turn my customers into my overseas investors.

My head was spinning as I left the bank.  The bank would not give me a $375,000 loan secured by property.  Yet they would lend my buyers of the club the full price of membership on an unsecured basis.  All I needed was get half my buyers right now on a nothing down pre -purchase deal.  This is exactly what I did.  My customers became my overseas investors.

I hustled out, called my customers and offered them this deal they could not refuse.  “Join our club now and you get an American Express gold card.  The bank will lend you the money unsecured for your club membership.  Pay it back when you can.” 

That was a deal that few overseas investors could refuse.

This was a much better deal for me than borrowing the money from overseas investors to start.  The original 25 sales were financed by the bank.  My customers had to pay the money back, not me.

My clients loved me for this deal.  The British pound collapsed shortly after.  That 7,500 loan that created over $15,000 became much less expensive…. barely $10,000.  Those who borrowed made about $5,000 (33%) forex profit on the loan as well as the good real estate deal.

They made such a profit on the currency change I wrote a report about it and earned additional income from the report sales.

In that real example, I used my writing to enhance a real estate deal.  The real estate helped me promote my seminars and sell a report plus I ended up with a income and a wonderful central London house to live in.

There are many multi dimensional real estate opportunities, land that offers a low stress, healthy home, farm income and other profit potential all at the same time.  Merri and I sponsored many Ecuador real estate tours to help readers buy multi dimensional real estate like Ecuador beach farms that provide rentals and farm income.

When investing and business are balanced the building of wealth becomes a more fulfilling, enjoyable process of service.  Great financial rewards are an extra benefit rather than ultimate goals.  Worries about money become less dominant and we gain an inherent power because we want to work harder and longer.  We don’t need to search (and spend) so much for fulfillment and are more likely to excel financially.

Three Layer Financial Plan

Having our own business allows us to operate at peak performance and create a PIEC (Personal Income Earning Corridor).  Having a PIEC business does not mean you should put all your money in just your own business (though at times you may).  Diversification is always good.

PIEC portfolios come in three layers, first the personal business, then a layer of very safe investments over a third, much smaller layer of speculative deals.

The majority of PIEC diversification beyond our business should be in stodgy, liquid investments such as utilities, CDs, bonds and good value equities.

I prefer Country Index ETFs that provide diversification into entire equity markets.  These investments might pay little in the short term, but are safe and they are highly liquid at a known price.  The low return on these investments is acceptable because they support your PIEC business which maximizes profits and adds comfort like few other investments can.

These very safe investments act as reserves if your business hits a sticky patch and can provide ready finance if sudden business opportunities arise.  They also don’t take up much time in research, accounting, watching the market, etc. so you can devote your energy doing what you love (your business).

However, if you genuinely love researching and tracking the market and have the mentality, capital and experience for it, just being an investor can be a wonderful PIEC business in itself.

The third layer of diversification can be speculative because modern portfolio theory suggests that safe investments are enhanced and made safer by adding a small amount of higher risk deals.  This also allows us to fulfill any casino mentality we might have left if having our own business is not enough.

PIEC investing makes it easier to create and keep wealth.  It enhances our lifestyles now, because it lets us make money being who we really are.  It makes life more fulfilling and fun.

Integrating investing and business reduces the risks of placing excessive demands on your savings, especially if we have an anchor of value.

#4: Find your Anchor of Value.

Find your passion.  Knowing ourselves also helps begin a business with a most powerful business tool I call the Golden Rule of Simplicity.  This rule says there are millions of people just like us.  When we truly see ourselves we look into a mirror that reflects an entire market who feel and desire just as we do.  This is a simple rule yet gives us a finely tuned market research system which shows us how to get create our product, get in touch with our market, deliver the product or service and surrounds us with like minded souls.

Self-knowledge is also essential for comfort and comfort is a vital part of everlasting wealth.  When investors are not comfortable, no profit is enough.  Uncomfortable investors have a never-ending thirst for more that cannot be quenched.  This indefatigable desire gums up the money making process.  Amounts don’t matter.  Even investors with incredible assets suffer this never-ending lust.  A well documented example is Bunker Hunt’s huge losses when he speculated in silver in the 1970s.  He had hundreds of millions yet speculated it all to make even more. When is hundreds of millions not enough?

Develop your investment rules.  Whatever your passion you will need to establish your method – the criteria you will use to select shares for your portfolio.

Whatever your preference you need to establish your key criteria.  Once you have your method working well, improvements come from experience and practice – learning from the successes and failures of each and every investment you make.  The quote “The harder I practice, the luckier I get” applies here.

Know when to sell – and when not to.  A key factor in effective portfolio management is to run profits and cut losses.  This is counter-intuitive for most people because it is natural to want to grab a profit and rather unpleasant to realize a loss.

If you run your profits they can become very big.  If you cut your losses they will always be relatively small.

To understand this approach better, let me ask a question.  What if I offered you a free Mercedes Benz?

You would probably say YES… but would be thinking… “What’s the catch?”  That’s good because we all know there is no such thing as a free lunch, much less a free new car.

Would an answer be harder if instead there was a choice, a FREE Mercedes or $4 million bucks (as in US dollars)?

Most would choose the cash.  Yet of course we would still be expecting a catch.  There is a penny to drop, some risk and the need to ignore the thundering herd and an absolute requirement of discipline.

Let me share a true story about how and why an investor in similar circumstances got the Mercedes and had the $4 million, but then lost it.

The story contains three valuable tips.

Once upon a time, 1981 to be exact, there was a recession. An economic and political mess arose across the land.  The story began with unemployment.  In 1981, the US Presidential election was over, the US economy was hurting and the new government and president were turning on the money printing machine.

This was a gloomy time, those early 1980s.  Really.  That was the worst recession since the great depression.

You often hear that the worst recession since the great depression was the great recession of 2007.  This is statistically wrong.  1982 was worse.

The times were dark and this story begins at the end of the 1980 Presidential election when the US economy was at its worst in 50 years and getting worse.

Our hero in the story thought the stock market would recover, despite the fact that everyone thought everything was bleak and black.  He approached his bankers and asked to make some leveraged investments in the stock market.

His goal was to make enough profit to buy a brand new Mercedes Benz.

He opened the account and bought shares. He used those shares as collateral to leverage these investments with borrowed Japanese yen.

His timing was lucky.  The stock market rose quickly.  The Japanese yen collapsed.  His profits shot past his goal to buy the car.

The Fever

Bubble fever had set in so when the hero’s investment manager called with that great news, “You have enough for your new Mercedes“, the investor changed his mind.  “Let it roll,” the investor said.  “I want to make a million instead”.

The investment manager left the portfolio alone and soon the investor’s profit rocketed past 1 million dollars.

The investment manager called.  “You have made a million bucks… perhaps we should take some profits.

Let it roll,” the investor said. “I have decided to make two million instead.”

The investment manager left the portfolio alone and soon the investor’s profit rocketed past 2 million dollars.

The investment manager called.  “You have made two million bucks… perhaps we should take some profits.

Let it roll,” the investor said. “I have decided to make three million instead.”

The investment manager left the portfolio alone and soon the investor’s profit rocketed past 3 million dollars.

The investment manager called.  “You have made three million bucks… really we should take some profits.

Let it roll,“… the investor said. “I have decided to make four million.”

As the portfolio was nearing four million in value the investment manager called.  “You have made almost four million bucks… perhaps we should take some profits.

Let it roll,” the investor said. “I have decided to make four million and enough for a Mercedes.”

Shortly after the stock market corrected and the yen strengthened.  Profits fell so quickly the investor lost a million almost overnight.

The investment manager called.  “You have lost a million bucks… we had better take the profits.

Hold,” the investor said. “The market will come back”.

The stock market fell more and the yen grew stronger.  The profits fell even faster and the investor lost another million.

The investment manager called again.  “You have lost another million bucks… it’s time to take your profits.

Hold,” the investor said. “The market will come back”.

The stock market continued to plummet and the yen rose more.  The investor lost another million.

The investment manager called.  “You have lost three million bucks now…  You really should take the profits left.

Hold,” the investor said. “The market will come back”.

Finally as the market plunged more and profits faded away, the investor, having lost more than 3.5 million, closed his positions and had just enough profit left to buy his new car.

The Mercedez was black and shiny… a big 500 SEL model… king of the road.  The hero never enjoyed it much.

The moral of the story is that when you invest you need a plan, a discipline and to know when to holdem and when to foldem.

Remember that there are always three distinct options – buy, sell and hold.  We’ll look at how to decide when to buy, to sell and to hold later in this report.

Make sure you have some liquidity. You should always keep an eye on the “liquidity”, the ease with which you can sell all or part of your portfolio. If you are invested mainly in big cap stocks you will have little trouble going into cash if necessary.  However, if you have focused on smaller growth shares it makes sense to keep enough of your PIEC portfolio in large companies.

Select shares that can, if necessary, be turned into cash instantly and provide some comfort if the market as a whole turns ugly.

The potential gains on very large companies are not likely to be as high as those from smaller growth companies, but they can and often do well enough to give you a warm feeling.  Remember comfort counts!

Diversify – but not too much.  Your portfolio should contain no fewer than 10 shares, and you could put 10 percent of your money in each of your top selections.  Diversification is essential to reduce risk, but too much of it can hinder performance.

One of the best ways to have huge diversification in a small portfolio is with Country Index ETFs.  These ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country. ETFs do not try to beat the index they represent. The management is passive and tries to emulate the performance of the index.

Most country index ETFs are invested in dozens, often a hundred or more, shares.

For example, the iShares MSCI Australia (symbol EWA) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Australia Index which is composed mainly of large cap and small cap stocks traded primarily on the Australian Stock Exchange mainly of companies in consumer staples, financials and materials. With 72 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in Australia.

A portfolio of a dozen country index ETFs represents diversification to hundreds of shares and a dozen currencies.

Diversifying into countries is safe because countries  generally do not go away, go bankrupt or become challenged by changing technology and altering markets.

Diversifying into countries is also relatively simple because, there is sufficient analysis of global markets so every country’s stock market can be compared and markets of best value included in a safe portfolio.

In addition these valuations do not change quickly.  In 2016 our portfolio of 20 good value country index ETFs had only one change, an addition of the Turkey Index ETF, in the year.

This low volume turnover gives us time to put our focus and energy on our business and the passion we love most.  Studies over decades suggests that this simple slow trading, highly diversified approach increases long term profits and increases safety.

Country ETFs provide massive, good value diversification at a really low cost.

Most passive country index ETFs have minimal cost structures.

#5: Keep costs down. 

High trading costs are one of the biggest drags on the performance of your PIEC portfolio.

There are numerous costs we need to keep an eye on.

Load fees. Avoid back-end and ongoing load. When looking at mutual funds, we’ll typically see them listed as A shares, B shares, and C shares.  All of these share classes have some type of load.  Avoid them.

A shares include a front-end, a guaranteed loss the minute you buy.  B shares come with a back-end load, a guaranteed reduction of any profit or expansion of any loss.  B shares typically charge 5% if they are sold within a specified time (normally five to seven years). There are also higher ongoing operating expenses for B shares. Fund companies typically charge up to an extra 1 percent a year for B share operating expenses.

C shares charge a penalty (usually 1 percent) if a sale is made within the first year.  They also carry higher expense ratios.

12b-1 fees are fees hard to see internal fees that cover a fund’s marketing and distribution costs. Funds can 12b-1 fees to pay brokers incentives for selling their funds. We should watch 12b-1 fees to make sure our broker is advising this fund because it is a good investment, not because he or she is receiving an incentive.

Management fees. We should make sure we get what we pay for, a good manager who makes us feel comfortable by helping build safety and steady performance in our portfolio.

Churning. Some funds and brokers churn, or buy and sell more than is really required.  History suggests that the less activity in a portfolio, the higher the return. Active management is one thing, but funds and brokers can increase their income with excessive transactions that do little or nothing to help us as investors.

Misallocation. Many investors are misallocated for the benefit of the bank or broker.  There are a remarkable array of unnecessarily risky, undiversified portfolios created to generate fees, and that have nothing to do with a client needs. Beware of complex and expensive portfolios full of bits and pieces that are hard to understand. Low transparency can often be associated with high costs.

Expense ratios in fund doesn’t cover all of the costs.  All investors, whether using funds or not face other costs such as brokerage and bid-ask spreads.

Bid-ask spreads for example are subject to market friction.  Markets are liquid because makers standing ready to buy or sell shares at all times.  They are paid by the difference between what they will buy and or sell for.

Shares that have less liquidity, ie.  Not many buyers and sellers, have bigger spreads between buying and selling prices.

Investing in widely held index funds and index ETFs can reduce this cost gap.  Such investments normally trade within fractions of a cent, keeping this this hidden expense in check.

Trading commissions make active trading an expensive way to increase profits. Trading costs sandbag our profits from the start.

Taxes need to also be considered. Buying and selling quickly increases fees and also creates short-term capital gains taxes.

Be careful of margin account as well. Most brokers will let us borrow money (for a fee) so we can leverage our investments.  This increases any profits or losses created, but also adds the interest cost of the leverage.

If we add up all the potential fees, redemption fees, brokerage fees, back-end load fees, management fees, inactivity fees, 12b-1 fees, transfer fees, minimum equity requirement fees, commissions, the cost of limit orders and consultancy costs, before investing.

We should know what all our fees are.

Passive Funds Usually Cost Less. Because reducing costs is a major factor in investment success, low cost passive funds that do not require high cost managers generally out perform managed funds in the long run.

Over a 15 or 25 year period very few managers outperform the respective benchmarks of sectors where they invest by a couple of percentage points.

It’s an easy way to game the stock market, and getting easier by the day.

In Part Two of this report we’ll look at the more speculative end of our PIEC portfolio.

While we are sharing this report, I want to make a special offer, limited to the next three days, that can help you integrate your business and investing.

We offer two courses for attaining financial security.

The first is our “Live Well and Free Anywhere Program”.  The program contains  a series of courses and reports that show ways to earn and be free. These courses and reports are:

  • “International Business Made EZ” course
  • “Self Fulfilled – How to Write to Sell” course
  • Video Workshop by our webmaster David Cross,
  • The entire weekend “Writer’s Camp” in MP3,
  • The report “How to Raise Money Abroad”
  • Report and MP3 Workshop “How to Gain Added Success With Relaxed Concentration”
  • Any updates to any of the courses, workshops, reports or recordings for a year.

You can learn all about this program at How to Have Real Freedom, but do not order the program there for $299 .  If you subscribe to the Purposeful investing Course in the next three days, I’ll send you the program free.

I invite you to join me and a small selective group who for the next year will participate in an intensive program called the Purposeful investing Course (Pi).  The purpose of Pi is finding value to increase the value of and protect our savings, pensions, income and wealth in good times as well as devastating economic conditions.

Learn Slow, Worry Free, Good Value Investing

Stress, worry and fear are three of an investor’s worst enemies.  They create a Behavior Gap, that causes investors to underperform in any market good or bad.  The behavior gap is created by natural human responses to fear.   Pi helps create profitable strategies that avoid losses from this gap.

Lessons from Pi are based on the creation and management of a Primary Pi Model Portfolio, called the Pifolio.  There are no secrets about this portfolio except that it ignores the stories from economic news (often created by someone with vested interests) and is based mainly on good math that reveals the truth through financial news.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets using my (almost) 50 years of global experience and my study of the analysis of four mathematical investing geniuses (and friends).

The Pifolio analysis begins with a continual research of international major stock markets that compares their value based on:

#1:  Current book to price

#2:  Cash flow to price

#3:  Earnings to price

#4:  Average dividend yield

#5:  Return on equity

#6:  Cash flow return

#7:  Market history

We combine the research of several brilliant mathematicians and money managers with my years of investing experience.

This is a complete and continual study of what to do about the movement of international major and emerging stock markets.  I want to share this study throughout 2017 with you.

This analysis forms the basis of a Good Value Stock Market Strategy.  The analysis is rational, mathematical and does not worry about short term ups and downs.  This strategy is easy for anyone to follow and use.  Pi reveals the best value markets and provides contacts to managers and analysts and Country Index ETFs so almost anyone can create and follow their own strategy.

The costs are low and this type of ETF is one of the hardest for institutions to cheat.  Expense ratios for most ETFs are lower than those of the average mutual fund.  Little knowledge, time, management or guesswork are required.  The investment is simply a diversified portfolio of good value indices.  Investments in an index are like investments in all the shares of a good value market.

Pi opens insights to numerous long term cycles that most investors miss because they have not been investing long enough to see them.

For example, in the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  Then the cycle ended.  Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview.  He said:  Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

I did well then, but always thought, “I should have invested more!”  Now those circumstances have come together and I am investing in them again.

The circumstances that created fortunes 30 years ago were an overvalued US market (compared to global markets) and an overvalued US dollar.  The two conditions are in place again!   There are currently ten good value (non US) developed markets,  plus 10 good value emerging markets.

Pi shows how to easily create a diversified, worry free portfolio in some of these good value markets using Country Index ETFs.

The current strength of the US dollar is a second remarkable similarity to 30 years ago.   The dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but when you subscribe to Pi you’ll receive the report, “Three Currency Patterns For 50% Profits or More” FREE.

Plus get the $39.99 report, “The Silver Dip” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80 and has remained near this level, compared to a range of the 230s only two years ago.

These two events are a strong sign to invest in precious metals.

I prepared a special report “Silver Dip 2015” and updated this in 2017.   The report explains the exact conditions you need to make leveraged silver & gold speculations that can increase the returns in a safe portfolio by as much as eight times.  The purpose of the report is to share long term lessons about speculating in precious metals gained through 30 years of speculating and investing in gold and silver.

The low price of silver offers special value now so I want to send you this report because the “Silver Dip 2017” offers enormous profit potential in 2017.

Save $457.95 if You Act Now

Subscribe to the first year of the Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns For 50% Profits or More”, the $27  report “Silver Dip 2015” and the $299 “Live Well and Free Anywhere Program”.

Triple Guarantee

Enroll in Pi.  Get the first monthly issue of Pi and the report “Three Currency Patterns For 50% Profits or More” and the “Live Well and Free Anywhere Program” right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through your own purposeful business and slow, worry free purposeful investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  I guarantee you can keep “Three Currency Patterns for 50% Profits or More” and “Silver Dip 2015” plus the Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.  You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to a Pi annual subscription for $197 and receive all the above.

I am so confident that you’ll gain from this offer that if you are not fully satisfied, simply email me within 60 days for a full refund  and keep the $299 “Live Well and Free Anywhere Program” as my thanks for giving Pi a try.  


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