Category: Insights

“Making money is not like what I thought it would be. This business kills the part of life that is essential, the part that has nothing to do with business…  

People want an authority to tell them how to value things, but they choose this authority not based on facts or results. They choose it because it seems authoritative and familiar.” 

This quote comes from Michael Burry’s letter to his investors at the end of the movie The Big Short. It’s a great movie. And the book is even better. 

We have been discussing a comprehensive approach to personal finance and investing over the past week and a half. I have tried to lay out a strategic investment plan that leads directly to financial security and ultimately financial independence. 

I sat down to pen this entry with the hopes of putting it all together and painting the big picture for you… and the above quote kept popping up in my head. I think it’s exactly the message that so many of us need to hear. 

When I took a job in the investment research field, my sole motivation was financial. I had largely squandered the money I earned working in corporate banking, my first career, and I was dead-set on making up for lost time. 

So I put my head down and worked 10 hours a day during the week and at least 8 hours over the weekend. I didn’t take any days off – not even holidays, with the exception of Thanksgiving and Christmas. 

I did this for years, and sure enough I became a fairly competent investment analyst and financial writer. I also started to build out a bulletproof portfolio and make some cash flow investments with a strategic investment plan – just as I’ve talked to you about over the past week. 

As time went on, I was amazed at how my portfolio and my income ballooned.  

It didn’t take long until I was at a point where I didn’t have to worry about money anymore. There’s such peace of mind that comes with knowing you have the resources to pay the bills and take care of your family no matter what may come your way. 

However, I learned a hard lesson through this process. I didn’t need to focus solely on the financial side of things to achieve financial security. It doesn’t come from extreme hard work. It comes from having an investment plan and executing it consistently. 

And you know what surprised me? 

Continue reading “Build Financial Security with a Strategic Investment Plan”

Anyone who pays attention to their finances is aware of the power taxes have to impede their growth.

For W2 wage earners, you see how taxes eat into your income with every paycheck you receive. The gap between your gross pay on the top line and your net pay on the bottom line can be quite substantial.

For business owners, taxes can nearly wipe out an entire year’s income if you’re not diligent with your planning. I have a friend who was absolutely shocked when this happened to him. He had a good year… until the tax bill came.

And for investors, taxes can eat into returns significantly. An old experiment on exponential growth demonstrates this…

Let’s say you start with a penny – $0.01 – and you’re such a good investor that you’re able to double it every day. That’s a 100% investment gain each day.

If you keep at this for 30 days, that one penny will grow to a mind-blowing $10,737,418. That’s the power of exponential growth.

But what happens if your performance is subjected to capital gains tax every time you hit a double?

The standard capital gains tax rate is 15% here in the US. That sounds innocent enough… but the math lays out how insidious it is.

Getting back to our penny example…

Continue reading “Tax Strategies to Boost Wealth”

We’ve been talking about real estate and mortgage notes this week. Both are powerful cash flow investments, but they need a strong foundation. It all comes down to making your money bulletproof…

That’s where the concept of an asset allocation guide comes in.

The idea is to spread your capital out over a range of robust assets. That way you are insulated from economic uncertainties while positioned to grow your money over time.

A robust asset allocation model will consist of:

• 10-20% Strategically Warehoused Cash
• 5-20% Gold
• 5-20% Bitcoin
• 5-20% Capital-efficient Stocks
• 20-50% Cash Flow Investments
• 0-5% Alternative Investments

This is how we create a modern Permanent Portfolio. It’s all about building a personalized asset allocation guide. That guide determines how much of our total savings we allocate to each bucket.

Here’s my current asset allocation guide:

Continue reading “A Modern Asset Allocation Guide”

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”