Author: jwithrow

As we’ve discussed this week, investment real estate can serve as a cornerstone for passive income. Real estate is a timeless hard asset that’s tried and true. 

Today we’re going to talk about a real estate hack that can juice your cash flow and reduce risk. Let’s start by setting the stage…

While real estate is tried and true, it also comes with periodic challenges. 

As an investor, we’re on the hook for repairs and maintenance items from time to time. And then turnover costs can get a little steep whenever a tenant moves out. Those costs eat into our cash flow.

Mortgage notes fix that…

When you invest in a mortgage note, you’re buying somebody else’s mortgage. Then, when they make their monthly payment, the principal and interest (P&I) portion of it comes to you.

Continue reading “Boost Passive Income with Mortgage Notes: A Real Estate Hack”

As we discussed yesterday, the nest egg model pits assets against income. When your assets are going up, you don’t have extra income. And when you need extra income, you have to sell your assets.

That puts your money on a see-saw. But what if it were possible to get off? What if you could grow both your assets and createextra income at the same time?

That’s the beauty of the Phoenician League’s spin on Harry Browne’s old Permanent Portfolio concept.

It starts with building a base foundation of reserve assets. From there we make our cash bulletproof, and we consider turbo-charging our portfolio with capital-efficient businesses.

This provides us with true financial security.

Then we can leverage these assets if we ever need to come up with extra money in a pinch. That’s far better than selling because we keep the assets and avoid creating a taxable event.

And it gets even more robust from there…

We can also utilize LLCs to create streams of cash flow through real estate, mortgage notes, and alternative assets like music royalties. These are our cash flow investments that create passive income for us.

The bottom line is this…

Continue reading “How to Grow Assets and Income with a Strategic Investment Plan”

Yesterday, I shared how Monopoly taught me to focus on assets. Let’s talk about the traditional retirement model today.

And we’ll start with this… It’s a see-saw that forces you to choose between assets and income. Here’s why that’s a trap…

Imagine saving $1 million for retirement across a 401k and IRA. And let’s say you want to draw $70,000 per year to live comfortably.

At a 15% tax rate, you must sell $83,000 in assets annually to net $70,000 after taxes. This reduces your investment balance, which makes it harder for your money to grow.

If we assume you’re able to generate a steady 4% return with no down years, that $1 million is gone after 17 years of taking $70,000 annual withdrawals. Here’s the math:

That’s it… everything you worked for – gone in 17 years.

Continue reading “Why the Traditional Retirement Model Falls Short”

As a kid, I loved playing the classic board game Monopoly—but I didn’t realize that the game presented players with an important financial lesson. It wasn’t until I lost thousands chasing bad investments that I learned that lesson the hard way…

Wealth isn’t about money. It’s about assets. That insight is what transformed my approach to everything…

Early in my career, I was spinning my wheels. I chased every hot tip—tech stocks, corporate bonds, options trades—thinking I’d hit it big and finally get ahead. But I didn’t have a system or a  strategy in place… it was all knee-jerk decisions.

One year, I made a rookie mistake that cost me big. I ended up having to dip into my IRA early to cover an expense, only to get hit with a 10% penalty and a hefty income tax… because I did no tax planning whatsoever.

It was a gut punch. Thousands gone, and I was no closer to financial independence.

Then I thought back to Monopoly. The game isn’t about hoarding cash. It’s about owning Boardwalk and Park Place—trophy assets that can generate income. That was my lightbulb moment.

Continue reading “How Monopoly Set Me Straight”

I have another dispatch from the frontier for you before we dive into the world of cash flow investments. Check this out…

I snapped this picture just as the sun began its ascent over the mountains overlooking our property the other morning. I’ve never seen the sky light up orange like this before.

To me, this gravel road leads to the end of the world. It winds its way across our property to the very last utility pole in the area. Then the road ends. It stops at the foot of the mountains. There’s not even room enough to turn around.

There’s something grounding about places like this.

Out here, the rat race feels like a world away. And you’re reminded of what truly matters—family, freedom, and building a solid foundation that lasts.

That brings us to our discussion on cash flow investments today. Building cash flow is not just about making money… it’s about creating a life where you call the shots.

But let’s step back for a minute.

We’ve been exploring how to build a robust asset portfolio – one that makes your money bulletproof and generates monthly income to fuel your freedom. As a reminder, a bulletproof asset portfolio includes:

Continue reading “Cash Flow Investments for Passive Income”

The Springtime rains are upon us up here in the mountains of Virginia. I snapped this picture as I ventured off the property:

There’s something magical about seeing the mist floating above the barn on a cool Spring morning. Life on the frontier is a simple life… but I treasure the aesthetics and connection to nature.

Getting back to the world of finance, let’s continue our discussion on asset allocation today.

If you recall, we’ve been talking about how to build a bulletproof asset portfolio utilizing Harry Browne’s old Permanent Portfolio concept with some modern tweaks.

At The Phoenician League, we see a bulletproof portfolio as consisting of:

• Reserve Assets
• Strategically warehoused cash
• Capital-efficient stocks
• Cash Flow Investments
• Alternative investments

We talked in depth about reserve assets and how to strategically warehouse cash last week. Today, let’s dive into capital-efficient stocks. And we have to start with this…

I’ve been immersed in the world of investment research for over a decade now. I’ve read countless research reports and studied more investment and trading systems than I can remember. I’ve also had access to a wealth of expensive tools and datasets to conduct my own research within the financial markets.

This experience has cemented a fundamental principle in my head. It’s something I learned from Porter Stansberry over ten years ago: There’s no teaching, only learning.

That statement sounds a little odd when you first hear it, but I’ve come to realize that it’s eternally true. I believe that from experience.

Continue reading “Building Wealth with Capital-Efficient Stocks”

Yesterday we talked about reserve assets in detail. Today’s topic will be how to strategically warehouse cash.

Let’s start with this – when we talk about cash, we’re talking about fiat currency like US dollars, Euro, yen, and the others.

Obviously it’s a good idea to keep a little bit of cash in the bank at all times. Here in the US, I think it’s wise to have some physical cash on hand as well—just in case we need it in a pinch.

But here’s an important nuance that mainstream finance doesn’t understand…

Holding cash is about pure liquidity… not about stockpiling money. We don’t want to hold the bulk of our money in cash.

That’s why reserve assets are so important. We allocate to gold and Bitcoin specifically to save money.

As I mentioned yesterday, I don’t think we should view gold and Bitcoin as investments that we buy hoping to sell later. Instead, they should be the cornerstone of our asset portfolio.

Gold and Bitcoin are our reserves. We buy them specifically to move out of fiat money and into higher quality assets.

The problem with cash is that it loses purchasing power over time. This is why it’s important to strategically warehouse cash.

Sometimes it loses purchasing power exceptionally fast due to “high inflation”… but it’s still losing value during “normal” times as well. That’s a function of policy.

In the US, the Federal Reserve (the Fed) has a stated policy goal of 2% inflation annually. That means it deliberately wants to cause the US dollar to lose 2% of its purchasing power every year.

Of course, they never say it that way. They pretend that inflation is about rising prices and asset values. But rising prices are just the result of inflation.

Inflation is the act of expanding the money supply. This can be done simply by “printing money” at the central bank. But the current system has a myriad of other more nuanced ways to expand the money supply as well.

The Fed’s open market operations, reverse repo facility, standing repo facility, discount window lending, and its foreign exchange swaps can all be used to inject dollars into the financial system to increase liquidity. Then fractional reserve lending, securitization, and off-balance sheet vehicles at the commercial banks can also increase liquidity in the system, each expanding the money supply.

We should note that all these activities tend to create boom-bust cycles… but that’s a topic for another day. The key point is that cash will constantly lose purchasing power over time for as long as the current monetary system remains in place.

That’s why we don’t stockpile money in cash. It would be like storing water in a bucket riddled with holes. Our purchasing power would gradually leak out on us.

Still, it’s a good idea to keep some cash so that we have liquidity. Here’s what I mean…

Continue reading “How to Strategically Warehouse Cash”

I have some more notes from the frontier for you before we get back to our discussion on asset allocation and reserve assets this week…

We ventured up to an historic old inn last weekend. It’s an establishment in Hot Springs, Virginia that’s run by the Homestead Resort, which was founded in 1766 – ten years before America declared independence.

Captain Thomas Bullitt built the original 18-room wooden inn after receiving a land grant for his military service in the French and Indian War. He figured it could accommodate the visitors who came to the area to bathe in the mineral springs for which the town was named. Thomas Jefferson even visited the original Homestead inn towards the end of his life.

Located deep within the Allegheny mountain range, this area was truly the frontier in those days. Nobody knew what existed to the west of the mountains.

In many ways I feel like Hot Springs is still the frontier. The town sports a population of 540 people, and it’s located 30 minutes from the nearest highway and 40 minutes from the nearest Walmart. As such, the crisp mountain air remains untainted by modern America’s rat race.

Here’s a shot of the inn from our visit:

There’s something magnificent about the old inn laid against the Alleghany mountains under a crisp blue sky. We had lunch there… and we were their only table. Such is life on the frontier.

Getting back to finance…

We left off last week talking about Harry Browne’s Permanent Portfolio and the concept of asset allocation.

As a reminder, asset allocation is about spreading your money – your capital – across several different asset classes according to a personalized model. The purpose here is true asset diversification.

A robust asset portfolio will consist of:

• Reserve Assets
• Strategically warehoused cash
• Capital-efficient stocks
• Cash flow investments
• Alternative investments

We’ll dedicate a separate entry to each of these, starting with reserve assets today.

Continue reading “Reserve Assets for Wealth Preservation”

Yesterday we talked about Harry Browne’s tried-and-true Permanent Portfolio concept. And as we noted, asset allocation is the key to building such a portfolio today.

The idea underlying the Permanent Portfolio is brilliant in its simplicity – build a bulletproof asset portfolio that will thrive regardless of what’s happening with the economy.

That’s where asset allocation comes in…

Asset allocation is about spreading your money – your capital – across several different asset classes according to a personalized model. The purpose here is true diversification.

I suspect many of us hear the word diversification and CNBC’s definition comes to mind. You know—buy stocks in all kinds of different industries so that you have a diversified portfolio. I don’t buy that… because that approach focuses on a single asset class.

To become financially bulletproof, we must build a portfolio across a range of assets that complement each other.

Individually, each asset class has its own strengths and trade-offs. But magic happens when multiple assets are strategically assembled under the same roof.

A robust asset portfolio will consist of:

Continue reading “Bulletproof Asset Allocation”

A note from the frontier before we get to our permanent portfolio discussion today…

I attended my daughter’s dance recital at the old Masonic Theatre in Clifton Forge, VA over the weekend.

I highlighted this building a few weeks ago – the first time I visited it – because I find it fascinating. It’s a historic Appalachian opera house that opened its doors in 1906. Apparently it once hosted everything from presidential speeches to old western performances.

What strikes me most are the elevated opera boxes on the second level of the building – just overlooking the stage. Nobody seems to sit in those things today… so my son and I went up there to check them out.

Here’s a picture I snapped of our view from the box just before the curtains opened:

These opera boxes strike me as a relic from the Victorian era… and there’s something oddly nostalgic about that.

Getting back to the world of finance and economics…

We talked last week about the changing dynamic of global trade and Triffin’s dilemma. When we left off, we asked a key question – what’s it all mean for us? And how should we position our finances given all the uncertainty out there?

Continue reading “A modern Permanent Portfolio strategy…”