Your money is no different than you.
It has taste, prefers things, moves, and hates things.
Put it in an environment it likes, and watch it grow.
Mistreat it; it’ll leave.
Care for it; it’ll care for you.
A strange thought.
However, after being a professional investor for over a decade, I understand that this dynamic is critical to growing money better.
Today, we’re discussing what money likes so you can treat yours better and get more of it.
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Global markets have transformed in the last four years and ushered in a new era of investing, which kicked off in 2023.
Here’s how we got here.
From the ashes of the great financial crisis of 2008 and 2009, the 2010s were marked by one of the best rallies ever.
Assets went up and to the right, led by an infinite money supply, low interest rates, tech wizards, and strong economies.
Look at any investment chart, and you’ll see.
Then, 2020 hit, and oh my, what an experience that was.
I remember March 2020 vividly, like it was yesterday, actually better than yesterday, unfortunately.
I watched the financial markets explode like you did – everyone was selling, business stopped, and we all went home.
Then everyone started buying, almost just as fast.
Why? A gigantic money canon unleashed money into our global economy on a scale never seen before.
Then, in 2022, the training wheels came off – inflation was flying, interest rates followed suit, consumer confidence fell apart, and the bond market had its worst year since the 1850s.
2023 ushered in the largest banking crisis since 2008 and was also the year inflation was slayed (though prices are still high, looking at you bacon).
The markets flew in 2023.
In June 2024, life is sort of back to normal—a new normal underpinned by different financial conditions:
High government debt
High inflation
Artificial intelligence
Higher-for-longer interest rates.
It’s a wildly different environment to invest in, but one thing that hasn’t changed:
Money will flow to places where it’s best treated, places defined by stability and proximity to other money.
Think of it this way:
Grass likes the sun.
Kids like sugar.
Tired parents like coffee.
Money likes:
Stability
Proximity
Where money goes, asset values go up.
This is how it works.
I actually get a weekly report from my teammate Jacob on where money is flowing around the globe.
This stuff is that important.
When you understand what money likes (stability and proximity), you treat it better and get more.
Let’s dive deeper on these two points.
Proximity first.
The definition of proximity is this:
Nearness in place, time, order, occurrence, or relation; closeness.
A dollar doesn’t make you wealthy, but you are if you put enough of them together.
Money really likes to be around other money, but there’s another truth.
More money attracts more money.
The most obvious example of this is banks.
Banks suck money in and create more of it through lending.
Banks are a combination of magnets and factories for money.
They suck it in, then multiply it.
On the personal side, a 4% money market account with $100k will yield 10x more interest than an account with $10k.
Money works better when it is combined with more of it.
Love this or not, it’s the way it is.
Next, the second part of this equation is stability.
First, a definition of stability is a state of continuance without change or permanence.
Continuing with our banking example, people consider banks synonymous with financial stability.
Your visa bill coming due in two weeks?
The best place to pay it is your checking account at a bank, not with cash in your safe.
Banks work because people believe that their cash will be available when it’s needed—nothing more than that.
Money likes that confidence.
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Confidence creates stability.
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Stability creates foundations.
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People build stuff on foundations.
Your money, my money, likes that.
Banks are great because they provide this for money.
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Ok, so you get that money likes these things.
But you watch the news, scroll on social, or talk with friends, and stability is not a word to describe current events, and yeah, we have way too much “proximity” in our lives with our tech-centric lives.
Wars, politics, inflation, sensational ads, screens – everywhere.
Here’s the deal – a lot needs to be more stable.
And the past for years as investors have been good, but they have also been hard.
But amid all this, the markets are at all-time highs, the broader economy is good, and Americans have never been wealthier.
It doesn’t feel like it, but that’s the fact, not because of the wild world that is 2024, but despite it.
This proves the point: Money likes certain things, and no matter what is happening in the world, it will go to people and places that treat it best.
Can you be that person?
Yes.
Should you be this person?
Yes.
