Author: jwithrow

How many times have they told us to imagine the magical finish line known as “retirement”?

The mainstream narrative paints the picture: a farewell office party, a gold watch, and then… freedom. This idea, planted by decades of financial media and financial planning “experts”, is so ingrained in our culture that questioning it has been seen as sacrilegious for the better part of the last forty years.

But what if that finish line is just a retirement mirage? What if it’s just an image conjured to keep people on the hamster wheel for four or five decades – with the carrot of “retirement” always just ahead?

For the entire generation born in the first half of the 20^th century, retirement was anchored by two pillars: the employer pension plan and the promise of Social Security. These pillars provided retirees with two permanent streams of income, in addition to their personal savings.

Early Baby Boomers entered the workforce while employer pensions were still widespread… but that’s no longer the case. Outside of segments within the public sector, employer pensions are a relic of the past.

Meanwhile, the cost of living has exploded right as the Social Security program has become stretched thin. Anyone expecting Social Security to remain a key pillar of retirement may be disappointed in the years to come.

Continue reading “The Retirement Mirage: Why Traditional Planning No Longer Works”

Have you ever noticed that certain companies seem to have been around forever, resting on a bulletproof financial foundation? Meanwhile, it seems like we read about bank failures every few years now… and we know how retail shops come and go.

This begs the question… What separates businesses (and households) that thrive over long periods of time from those that don’t?

Here’s a secret that we’ll never hear on CNBC: The world’s most time-tested financial model is simple. It can be summed up in three basic planks:

• Always pay yourself first.
• Invest your earnings in strategic assets that protect your purchasing power.
• Build streams of steady cash flows.

When we take the time to analyze them, we’ll find that the world’s most enduring enterprises prioritize building their own reserves first – before they distribute profits or chase risky growth. This is the “pay yourself first” principal, and we can each mimic it. The goal is to systematically build out a bulletproof financial foundation.

The key is to build out this foundation across a group of strategic assets that will protect and grow your purchasing power over time. The world’s best businesses understand that there will be periods of economic distress… which is why having such a bulletproof financial foundation is so important.

Once those reserves are in place, the name of the game is to gradually build extra streams of steady cash flow. This is what creates resiliency.

Continue reading “Three Planks to Build a Bulletproof Financial Foundation”

If the last several years have taught us anything, it’s that traditional retirement planning falls short in today’s economy. Because the old rules of saving and investing no longer apply.

As we’ve discussed before, the conventional retirement planning model came to fruition in the 1980s. The industry has been peddling the same advice for over forty years now.

But I submit to you that the conventional model was built on two faulty assumptions – that interest rates would constantly fall and that the US dollar would retain its purchasing power.

Neither of those assumptions have stood the test of time. That’s why traditional retirement planning falls short.

We live in a world where home and car prices have soared. As have groceries and the cost of living in general… all as interest rates have risen dramatically over the last three years.

Meanwhile, wages have lagged far behind inflation, leaving the average household in a tough spot. This occurred even as American productivity powered forward… which tells us that the Cantillon Effect is in full swing.

Named for classical economist Richard Cantillon, the dynamic he observed describes the uneven impact that changes in the money supply have throughout the economy.

Specifically, Cantillon noted that when new money is injected into the economy through a central bank or government printing, those who receive and spend the new money first benefit by being able to purchase goods and services before prices rise. This disadvantages everyone else in the economy because it effectively steals purchasing power from the dollars they work for and save.

 This chart illustrates the insidious nature of the Cantillon Effect over time:

Continue reading “Why Traditional Retirement Planning Falls Short”

Happy 90th Birthday to Dr. Ron Paul—a true legend. Ron Paul’s legacy has transformed countless lives, including my own.

A Journey from Uncertainty to Purpose

Dr. Paul’s advocacy for individual freedom, informed decision-making, and genuine education inspired me to find real purpose and take responsibility for my own growth.

And his influence did not stop with me…

Thanks to Dr. Paul’s example, my family has pursued an educational path rooted in critical thinking, independence, and lifelong learning.

And that means we homeschool using the Ron Paul Curriculum. Through his work to create this homeschool program, Dr. Paul will have an outsized impact on the next generation as well.

Join the Celebration

Please join me in wishing this great man a very happy 90th birthday! My daughter and I created this tribute video in honor of Dr. Ron Paul’s legacy. And if you would like to celebrate the event in person, go to https://ronpaulbbq.com/.

We’re going to talk about Fed independence today… and a secret plot that may be brewing. But first, I hope the summer months are treating you well!

Up here in the Virginia highlands, we’ve had more summer storms and heavy rains than I can remember since we’ve been here. There’s something aesthetic about a good storm, and the rain keeps everything green.

But it turns out that Mother Nature is a force to be reckoned with… and we learned that this week when a torrential downpour washed out part of our gravel road. Here it is:

This hasn’t happened in the twelve years we’ve lived here on the frontier. That river of muddy water rushed down from the mountain and worked its way across the road and down into the river. Amazing.

Almost as exciting as roads washing out, we were talking about interest rates last time we spoke. Specifically, went examined the three key interest rate benchmarks and how each impacts rates throughout the economy.

The key takeaway we came to was that the Federal Reserve (the Fed) no longer controls long-term interest rates. The only benchmark it controls is the Federal Funds Rate, which influences short term rates (up to 2 years)… and that’s it.

So the conclusion we came to was that, even if the Fed were to cut its target rate aggressively, there’s still no guarantee that long-term Treasuries or mortgage rates would go down. As evidence, the 10-year Treasury and the 30-year mortgage rate actually went up immediately after the Fed cut its target rate last year.

Regardless, the Trump Administration has not stopped pounding the table on their desire for the Fed to cut rates. In fact, President Trump tripled down on his attacks on Fed independence. He recently said that the Fed should cut its target rate to 1% – which is three times lower than where it is today.

This further fueled media speculation that Trump might try to fire Fed Chair Jerome Powell. CNBC even asked Treasury Secretary Scott Bessent if someone could be both Fed Chair and the Treasury Secretary in a live interview.

Bessent responded, “Hasn’t been done since the 1930s…”

“That’s not a no,” the reporter quipped. Bessent paused and didn’t elaborate much on the matter.

You can intuit a lot from watching someone’s body language in conversation… and I think Bessent’s body language was telling in this interview.

Continue reading “Is Fed Independence at Risk?”

We’re talking long-term interest rates this week… in honor of America’s Independence Day, I suppose.

When we left off yesterday, we suggested that the Federal Reserve (the Fed) no longer has control over long-term interest rates – which are the rates that matter the most.

The reason being is that there are three key interest rate benchmarks that influence rates throughout the US economy. They are:

• The Federal Funds Rate (Fed Funds Rate)
• The Secured Overnight Financing Rate (SOFR)
• The 10-year Treasury Rate

We talked about the Fed Funds Rate yesterday.

As a reminder, when we talk about the Fed cutting or hiking rates, we’re talking about the Fed Funds Rate. But here’s the thing – it only influences short-term interest rates. To understand why, we have to understand the other benchmarks.

The Secured Overnight Financing Rate (SOFR) is the primary benchmark for trillions of dollars in corporate loans, adjustable-rate mortgages, floating-rate loans, interest rate swaps, futures contracts, options, derivatives, and other structured financial products. It reflects pure borrowing costs without bank credit risk.

SOFR is a critical benchmark for large corporate and institutional borrowing and hedging activity, and that extends into longer-term financing. Often this activity occurs when a company is undertaking larger-scale projects.

So SOFR is arguably more important than the Fed Funds Rate when it comes to spurring larger projects that could generate economic growth.

Continue reading “Why Market Forces, Not the Fed, Now Set Long-Term Interest Rates”

Dear friends – I hope the summer months are treating you well.

It’s been quite a while since I’ve last written to you. We have been busy working on a range of updates and upgrades for The Phoenician League behind the scenes. We are also in the early stages of planning a multi-day event that I think will be both fun and insightful. More information on that to come…

It’s been unusually hot up here in the mountains of Virginia. It’s rare that the temperature moves above the low 80s during the summers here… but it’s been pushing into the 90s the last few weeks.

For some relief, the kids and I ventured to a little-known swimming hole on the banks of the great Cowpasture River this past weekend. Here it is:

Crystal clear waters, a clear blue sky, and a quiet gravel beach… what more could one ask for?

The Cowpasture River originates in Virginia’s rugged northern highlands and winds its way south for 84 miles through the western part of the state. Then it merges with the Jackson river at Iron Gate to form the James – which meanders east across the state until it empties into the Chesapeake Bay past the original colony of Jamestown.

The natives called the river the “Walatoola”, which means “winding waters”. But then the Brits settled the area in the 1720s and dubbed it the “Cowpasture River”. They must have been a creative lot. Regardless, it’s hard to beat a morning by the river out here on the Virginia frontier.

Getting back to the world of finance…

A lot’s being made in the financial world right now about President Trump berating Federal Reserve (Fed) Chairman Jerome Powell and pressuring him to cut interest rates. The financial media jumped onto this to drum up a story around it – should Powell cut rates or not… and is he stupid like Trump says?

Continue reading “Why the Fed Funds Rate Matters Less Than You Think in Today’s Economy”

We’re talking about family heritage this week – having been inspired by an annual Lebanese festival and the most recent Remnant Finance podcast.

Yesterday we examined why passing along a heritage to future generations is critically important – even more so than passing on an inheritance. The reason is simple…

Heritage refers to our history, traditions, values, and customs. It shapes our identity and helps inform who we are and what we stand for. Not in a dogmatic way, but in a way that resonates with our authentic self as an individual.

If we aren’t firm in our own family heritage, the institutions of this world will work hard to shape us into a uniform, obedient, and compliant mass – so that we see ourselves as subordinate to the institutions. It’s insidious… but that’s the nature of our society at the present time.

To that end, I’d like to share my family heritage with you today.

I’m named for my great-grandfather, Joseph Elias Ellis. He was born in Beirut in 1878. That’s the capital city of Lebanon today… but Lebanon as an entity did not exist at that time. It didn’t become an independent country until 1943.

The area now known as Lebanon was home to the vibrant Phoenician city-states during antiquity. Then the Ottoman Empire conquered the entire region in 1516 and divided it into administrative units.

Originally the area consisting of modern Lebanon was carved up into different units. But the Ottomans consolidated the region into a single administrative unit in 1861. They called it “Lebanon” because the great mountain range in the northern part of the region had been known as the Mount Lebanon range for millennia.

Now, the Ottoman Empire was officially a Muslim state that imposed Sharia law upon its administrative units. Under the law, non-Muslims were classified as dhimmis – a protected but legally inferior class.

Thus, non-Muslims had a certain degree of religious and civil autonomy within their local jurisdiction. But they had to pay special taxes and were subjected to certain restrictions.

Joseph Ellis was born into a Maronite Christian community in Beirut. That made him a dhimmi – an inferior citizen.

Continue reading “The Power of Family Heritage – From Ancient Phoenicia to Today”

Friends,

I have another note from the frontier to share with you today. In honor of the ancient Phoenicians from which we derive our name, I ventured out to an annual Lebanese festival at the St. Elias Maronite Church this weekend.

For those who may not know, Lebanon did not become an independent country until 1943. But the modern country of Lebanon houses the great Phoenician city-states of the ancient world.  The three most prominent city-states – Tyre, Sidon, and Byblos – still exist by name today.

So I consider my journey to the Lebanese festival to be an annual pilgrimage of sorts. Here’s a picture I snapped of the Bell Tower that rises above the Maronite compound’s entrance:

This is the vantage point from the outside lawns. That bell tower marks the entrance to the compound which opens up into a courtyard with a fountain in the middle. The courtyard connects two large buildings – one of the left and one on the right.

The building to the left houses the kitchen and cafeteria. It offered festival-goers a wide array of Lebanese-style dishes. The building on the right houses the church, the library, and a set of classrooms for religious education.

I find this place to be fascinating.

For starters, the architecture mimics the classic Syriac Basilica Form that was common throughout the Mediterranean region in the 19^th century. And the church’s stained glass windows depict historical figures – including St. Elias, whose legacy is more highly regarded in the Eastern Christian tradition.

Continue reading “Heritage vs. Inheritance: Lessons from the Ancient Phoenicians”

For decades, the world of investing has been a shark tank where the deck was stacked against individual investors. Financial security was elusive. That’s why Harry Browne’s old Permanent Portfolio concept was so prescient back in the 1970s and 80s.

I’m happy to say that the Information Age has blown that old dynamic apart. Today, I would argue that individual investors have a leg-up on Wall Street and the institutions… if they are strategic about their operations.

That idea is at the heart of the investment approach we advocate at The Phoenician League, and we spent some time laying out the nuances behind it at our webinar on Wednesday. If you missed it, you can find the replay of that event right here: https://phoenician-league.lpages.co/strategic-investor-webinar-replay/

As we discussed at the webinar, the key is to have a comprehensive plan and to think long-term. If we do, it doesn’t take long to create true financial security and create extra streams of income.

For those who would like to fast-track their journey to financial security, we’re opening the doors to The Phoenician League through next Tuesday at midnight. If you would like to fully implement the strategies we discussed at the webinar with direct support – this membership is your path.

The Phoenician League offers:

Continue reading “Financial Security and Income”