A dry, barren desert with no water, food, or shelter.
Nights filled with cold air.
Scorching heat during the day.
No rain.
No people.
It’s not the place you’d typically want to build a life.
Not understanding financial markets and how money works is a great way to find yourself in the land of barrenness with your money.
Barely financially living –
- No passive income
- Low net worth
- No plan to get out.
A tough place to be.
But when you look out at the horizon, you see massive storm clouds 60,000 feet into the atmosphere.
You know you are so close, but the rains of don’t come.
You know those clouds will bring prosperity to whoever received the rain, and wonder how you can get more of it?
Well, glad you asked!
What Brings About the Rains of Wealth?
I want you to imagine for a second that cash rather than water covers our planet.
Every single square mile of blue ocean is covered in cash.
Just as oceans have an iron grip on life on Earth, this sea of cash shapes everything in our financial lives.
It creates currents that shape the global economy, financial hurricanes that destroy the unprepared, rains that bring prosperity, and droughts that devastate entire countries.
Its forces are immense.
And there is massive competition to harness its power from every single investor on Earth.
This sea of cash creates life-changing opportunities on land with its rains of wealth.
As an investor, you want this with everything you have.
To own the right assets at the right time, and when the rains of wealth come, you win.
And in doing so, taking you from a land of barrenness to a land flowing with abundance.
Of course, knowing where and when the rain is coming is the trick.
The Markets in 2024?
There’s an enormous amount of cash in the financial system right now.
It’s been the defining feature of our markets for the past four years.
In 2020, governments worldwide pumped waves of cash into COVID-prone countries to prop up economies and fight the virus’s effects.
We were all enjoying life, and then something like this happened.
They purposely created a massive wave of cash that destroyed many things in its wake to keep the economy alive, but the lasting effects have helped one particular group of people.
The investor class.
Put another way, people who own assets.
Yes, stimulus checks four years ago were a boon to tens of millions of Americans, but that effect is long gone.
The waves of cash created a massive run-up in asset prices, which led to an explosion of wealth worldwide.
And that is why the markets have been so strong this year.
People sitting with cash have deployed it into the stock market faster than people taking it out.
Classic economics – more buyers than sellers. A lot more buyers, actually.
While this has been great for the stock market, even more waves of cash still need to be deployed somewhere (like over $8t!)
This has and will define markets for years to come.
If you just read this and are disappointed because that’s not you, throw that in the garbage.
The people who own the assets are like you except for one key difference: they are usually 15-20 years older than you.
That’s it.
They’ve been building wealth longer than you have.
So how do you get into the rain?
I’ve received a lot of feedback from you all.
It’s basically this: “Tell me exactly what I should buy now with my money.”
While our team does this daily for Fjell’s clients, this is not the medium for specific financial advice (this also is a friendly reminder never to take specific “buy this / sell that” advice from anyone on the internet).
Financial lives are profoundly personal, and decisions should always be made in the context of you and your situation.
Sorry Instagram Finfluencers.
But here’s what I can tell you in the context of this newsletter as you seek the rains of wealth.
- You must get out of the financial desert. If this is you, get out and stay out of the financial desert. Financial plans help you get out of barren lands. If you don’t have one, get one.
- You must join the investor class meaningfully. In today’s world, filled with inflation, slowing economies, and cutthroat corporations, people who own assets have a distinct advantage – they are more immune to other people’s bad decisions. Owning assets is freedom.
- The cash in our system is equally good and bad. While the rains of wealth have hugely benefited people who own assets, this isn’t all rainbows and butterflies. The initial cash wave came from massive government spending, which likely means higher taxes, slower economies, and unpredictable market events ahead. As I said above, acquiring a great portfolio of assets is a hedge against this problem.
- Your portfolio should not be static. Just like the weather on planet Earth has been crazy the last few years, financial markets have been just as crazy. Now is the time to stay diversified, smart, and nimble with what you have. Diversity protects you from the catastrophic storms that destroy wealth and also spreads your likelihood of catching the rains of wealth.
The world is a volatile place right now, but it’s also always this way.
Wars, strife, market crashes, recessions, and layoffs happen every decade.
And what has happened throughout those times?
Rains of wealth.
I’ve worked with many people who have experienced enough rain over their lives to enjoy a life that isn’t perhaps the jet-setting lifestyle plaguing Instagram right now but a good life filled with enough.
Tired & Rich, that’s the goal you and I are after.
By understanding the market dynamics, who is winning, and how they are doing so, you can better position yourself for the coming rains.
Keep at it, stay nimble, and move towards the rain.
