Wake up. The get rich
quick decade of the late twentieth century is over. The phenomenal gains witnessed in the internet sector, the tech sector, and the stock market in general are gone with the wind. Much of the "wealth" created proved illusory, evaporating overnight into thin air.
We have entered a new global era, and there is no get rich quick scheme. The best defense you have is to get educated, make smart decisions about your investments, and keep one eye trained on the unfolding future. We are living through a change in epoch, and the old rules are breaking.
Below are the only three products you
need to navigate a successful financial future. Chronicles tracks monthly the fast
changing economic environment of the Second Great Depression,
which has already begun. This depression shall serve as
a massive, real time example of the economic principle of
"creative destruction," as our economy shifts from a
manufacturing base to an information base. This shift
will herald changes so grand as to be unimaginable to us
today. They will seem as much like magic as an airplane
would appear to a 18th century farmer. The bubble was
not without its benefit: The infrastructure is now fully in
place for a true information economy. But the
transition will come neither cheap nor easy. We have
entered a period of loss and opportunity where the old rules
will no longer apply. In addition to market commentary
& analysis, chronicles suggests five stocks each month
with the potential for massive gains during this period of
readjustment. Elliott Wave
International provides up to the minute coverage on
markets, domestic and international. EWI is the leading
source for Elliott Wave market analysis.
The Rich Dad
series serves as a rock solid base for learning the fundamentals of wealth creation and preservation. Chronicles & EWI will help you make your money, Rich Dad will help you keep and grow it.
Finally, there is
Amazon, earth's largest bookstore.
There is amazing wealth here. Not only can you find nearly any book on nearly any subject, delivered directly to your door, but it is one of the first companies of the information age. A newby by today's standards, it may one day, 100 years down the line, be viewed as a venerable old stalwart. (But that doesn't mean you should buy it)
"Economics as a subject matter is normally lacking in drama...Not only is economics without great theatre, but when theatre is present, economists tend to discount its relevance."
- John Kenneth Galbraith, The Great Crash
"The title, "The Great Depression" was assigned post-humously, after all the damage had been done and the wreckage cleared from view. No one realized its importance at the time because all were focused on the prosperity which, they were told, was "just around the corner." Today we use different words: "The recovery," we now say "shall occur two quarters henceforth." We have been saying this for the past two years now, first applied to the NASDAQ, now applied to the economy at large.
But what if
it's not true? What if things are really broken, badly, as
they have been in the past, or as they have been for the last decade in Japan? Imagine that a new era is taking shape, and we are discarding the old paradigm of manufacturing, in favor of "information." Previously we assumed that manufacturing was the source of wealth. Suppose this foundation of economics is replaced with a new tennant: Information is the source of weath. What on earth does that mean? Life changed radically when the transition was made from agriculture to manufacturing based wealth. The transition was was not easy.
Likewise, the current changing of
the guard will come neither quickly, silently nor peacefully. We are, as Mr. Galbraith notes above, in a period of great economic theatre. Its drama is likely to be downplayed, even ignored by traditional media sources. In this period, would you could prosper, or watch your hard earned savings and investments reduced to nothing as you focus on the recovery, two quarters henceforth... "
- Michael Nystrom, Chronicles, Issue 2
"The markets are in the process of turning. Depending on what market you observe, the turn has been going on since 1996. First we got the top in junk bonds. They're never coming back. In common stocks, the daily advance/decline line topped in April 1998. The NASDAQ topped in the first quarter of 2000. Even at current prices the market is so historically overvalued that anybody would be crazy to own them as a long term investment...
"The economy is staying as good as it is - just above neutral - only because people are now rushing to borrow the last pennies possible on their homes. They're refinincing so they can go out and buy TVs and cars and whatever else their little heart desires at the moment. That practice is brewing an unbelievable disaster. The banks are going to own most homes in three years, and they won't have anybody to sell them to. A mortgage is nothing but turning over ownership to your bank in exchange for whatever short-term item you would like to own this month. It's a terrible idea, and it stems from the reckless overconfidence [of New Era thinking] ...
"Oh, the dollar...The dollar is already ruined. It's just that the marketplace and societies haven't figured it out yet...We've been creating dollars since the Federal Reserve system was formed in 1913, but much more aggressively in the past 25 years. What have we been doing with them? We've been shipping them around the world. Where? To everybody's central banks, and even to individuals who believe that the dollar is a better store of value than their own home currency. So billions of dollars are being held overseas as reserves. When it suddenly (or slowly) becomes clear to more and more people that the dollar is not a store of value, they'll only have one option: return them all back to us. When they come back home, the domestic inflation will be, I think, one for the histroy books. So they've already destroyed the dollar..."
- Robert Prechter, The Elliott Wave Theorist, August 2001
"Too many people are tring to keep up with the Jones's. And if you look at their financial situation, the problem with keeping up with the Jones's is that the Jones's are going broke...
"Money is just an idea. The difference between the rich and the middle class is that their ideas are exactly opposite...
"Some of us are still operating under the ideas handed down by our parents - parents raised in the depression. Back then, the idea of job security was everything. But now we're in the Information Age, and living in a completely new reality. One of the main objectives of this series is to get people to shift their realitites to better fit the times. At issue today is not job security. At issue today is financial security. With companies passing on 401(k) plans to you, it means that you are responsible for your retirement. For the first time in history, so many people are betting their financial future and finacial security on the stock market. If the stock market really declines like we've seen in Japan for example, there will be many people my age (baby boomers) who's 401(k) will be wiped out. To me, that's risky."
- Robert Kiyosaki, The Choose to Be Rich Program
Books that you may carry to the fire and hold readily in your hand are the most useful after all. -Samuel Johnson.
Some publications to help you anticipate the changing landscape: