Look, folks, here's the deal: the financial game we've been taught to play? It's rigged.
I found out the hard way that traditional investing might be screwing us over, thanks to that nasty duo of inflation and money printing.
I spent many years waiting on the sidelines trying to learn what I should be doing and waiting in cash – that cash was like an ice cream in the sun, melting away over time and quicker than I care to admit.
I started diving deep into Bitcoin as a potential solution – you can read more about my journey with Bitcoin and financial independence in my post "Achieving Financial Independence with Bitcoin".
DISCLAIMER: Let me be crystal clear right off the bat: what you're about to read is my personal journey and opinions. I'm not a financial advisor, and this isn't financial advice. I'm just a guy who's had his eyes opened to some pretty mind-blowing stuff, and I'm taking you along for the ride.
The TL;DR Version: What I've Learned (So Far)
Look, I'm not gonna sit here and pretend I've got it all figured out. I'm still learning, still making mistakes, and still occasionally curling up in a fetal position when I check my portfolio. But here's what I know for sure:
- The financial game is rigged, but that doesn't mean we can't win.
- Educating yourself is the best investment you can make. (Cheesy, but true)
- There's no one-size-fits-all solution. What works for me might not work for you.
- The future is uncertain, but doing nothing is the riskiest move of all.
Here's what I've learned on my journey:
- The 12% Hurdle: If your investments aren't making at least 12% annually, you're basically getting poorer. Yeah, it sucks.
- Hard Assets are Your New Best Friend: We're talking Bitcoin, precious metals, real estate, and even some cutting-edge tech companies. Why? Because you can't print this stuff out of thin air.
- Diversification is Key: Don't go all-in on any one thing. Spread your bets, but make sure they're smart bets.
- It's a Learning Process: I'm still figuring this stuff out, and you will be too. That's okay. The important thing is to start.
- The Future is Uncertain, But Doing Nothing is Riskier: The world is changing fast, and our investment strategies need to keep up.
Remember, I'm not some financial guru. I'm just a regular guy trying to navigate this crazy economic landscape, same as you. But one thing's for sure: if we want to escape the rat race and build real wealth, we need to start thinking differently about our money.
So, are you ready to take control of your financial future? It won't be easy, but damn, it'll be worth it.
Where it all started: When I figured ut We Are All F’d
You know, for the longest time, I thought I had this whole finance thing figured out. Go to uni, get a degree, land a decent job, and watch the money pile up. Simple, right?
Wrong. It wasn't until this year that I stumbled upon some financial truths that completely flipped my world upside down.
I kept sharing about inflation and how this was the cause of the ‘cost of living crisis’ and I didn’t really understand it.
The more I researched the deeper I got and then stumbled upon something that has changed my investing journey completely – money printing, how the money we earn is being devalued every day.
I'd been working as an engineer for years, thinking I was doing all the right things. Saving money, dabbling in stocks, you know the drill. But something wasn't adding up. That's when I decided to dig deeper and really understand what inflation actually was.
Holy moly, was I in for a shock.
As I started peeling back the layers, I discovered that inflation wasn't just some vague economic term – it was actively eroding the value of my hard-earned cash. And then I stumbled upon the concept of money printing.
Talk about a one-two punch to my financial gut!
It hit me like a ton of bricks: by keeping our money in traditional fiat currency, we're basically shooting ourselves in the foot.
Unless we're beating both inflation and the rate of money printing, we're not getting richer – we're getting poorer, even if the numbers in our bank accounts are going up.
So there I was, feeling like I'd just pulled back the curtain on some grand financial illusion. The traditional assets I'd been taught to rely on – you know, the usual suspects like stocks and bonds – suddenly seemed a lot less bulletproof.
Buckle up, folks. I'm about to take you through my journey of discovering alternative assets and why I think they might be our ticket to escaping this financial rat race.
We'll talk about everything from the infamous Bitcoin to other hard assets that have caught my eye.
Fair warning: I'm still learning and figuring this out as I go. But if you're like me – someone who's tired of feeling like the financial deck is stacked against us – then stick around. You might just find some ideas to help you break free and build the future you've been dreaming of.
Ready to dive into the rabbit hole? Let's go!
Curious about what sparked this journey? Check out "My Path to Personal Sovereignty: Starting the Journey" to see where it all began.
I have also cheekily coined my own FIRE term – SovFIRE (Sovereign FIRE) 😄
The 11% Hurdle: Why Traditional Assets May Not Be Enough
Alright, let's dive into the nitty-gritty. Remember how I mentioned inflation and money printing? Well, buckle up, because this is where it gets real.
So, there's this guy Raoul Pal – smart dude, knows his stuff about finance. He talks about this thing called the "11% hurdle rate". Sounds like financial mumbo-jumbo, right? But stick with me, because understanding this changed everything for me.
Here's the deal: Pal says we need to be making at least 11% on our investments just to keep our purchasing power. Why? Because of two nasty little things: currency debasement (fancy term for money printing) and inflation.
Get this: global liquidity (basically, how much money is sloshing around) is growing at about 8% a year. Throw in about 3% global inflation, and bam – you need 13% just to stay afloat.
In other words, if your investments aren't making 11%, you're getting poorer. Yeah, let that sink in for a moment.
Well, 11% is a lot bigger than 3% – we were told we only need to account for inflation, WTF!
Now, here's where it gets scary. Most of our traditional investments – you know, the "safe" stuff like savings accounts, bonds, even a lot of stocks – they're not even coming close to this 12% mark.
I go into the hurdle rate in more detail in my blog post on the investment hurdle rate.
For more information on what the future holds for investing and how you can position yourself to take advantage of the next 5 – 10 years, check out my port on the everything code.
Why 5 – 10 years, well I went down the rabbit hold of understanding the idea of the economic singularity and it scared the shit out of me and I would rather try and do everything I can to set myself and my family up as best as we can if it does play out that way.
Let's break it down:
- Savings accounts? Please. If you're getting 1%, you're lucky.
- Bonds? A bit better, but still usually under 5%.
- The stock market? Okay, it can do better, but it's a wild ride and there's no guarantee.
So there I was, thinking I was being all responsible with my diversified portfolio of traditional assets. And then BAM! I realize I'm basically treading water at best, slowly drowning at worst.
Now, I'm not saying traditional assets are completely useless. But relying on them entirely? That's like trying to bail out the Titanic with a teaspoon.
This is where alternative assets come in. But before we dive into that rabbit hole, let me be crystal clear: I'm still figuring this out. I'm not some financial wizard, and I've made my fair share of mistakes along the way. But if you're like me, tired of feeling like you're running on a hamster wheel just to stay in place financially, then stick around. Things are about to get interesting.
Want to dive deeper into this 12% hurdle rate concept? Check out this article. It's a real eye-opener.
Want to know how I started optimizing my finances as an expat? Check out How Living Abroad Accelerated My Financial Independence Journey for some eye-opening insights.
Hard Assets: My Lifeline in a Sea of Funny Money
So, we've figured out that traditional investments might be about as useful as a chocolate teapot. But what's the alternative? Let me introduce you to my new best friends: hard assets.
WTF are hard assets anyway?
Simply put, hard assets are stuff you can actually touch (mostly) that have real value. We're talking about:
- Gold and silver (yeah, the shiny stuff)
- Real estate (bricks and mortar, baby)
- Commodities (think oil, coffee, you name it)
- And the new kid on the block: Bitcoin and other cryptocurrencies
Now, I'm not saying you should go full-on doomsday prepper and bury gold bars in your backyard. But hear me out.
Why I'm all about that hard asset life
Here's the deal: when inflation goes bonkers and money printers go brrr, hard assets tend to hold their ground. Why?
Because you can't just conjure up more gold or Bitcoin out of thin air like governments do with fiat currency.
Assets back by something hard to create, like gold or bitcoin are what's called sound money.
Bitcoin: The Mind-Bending New Kid on the Block
Alright, let's talk about the 800-pound gorilla in the room: Bitcoin.
I'll level with you. When I first heard about Bitcoin, I thought it was some kind of internet Monopoly money. Holy moly, was I off the mark.
Here's why Bitcoin's got me intrigued:
- There's only ever gonna be 21 million of 'em (scarcity, baby!)
- No government can mess with it (bye-bye, money printing)
- You can zap it anywhere in the world, any time (try doing that with your gold bars)
Is it a rollercoaster ride? You bet your ass it is. But in a world where governments are treating money like it's going out of style, Bitcoin's starting to look less like magic internet money and more like digital gold.
Beyond the Bitcoin Rabbit Hole
But hey, I'm not going all in on digital coins. I'm also eyeing up:
- Physical gold and silver (can't hack these bad boys)
- Real estate (though that's a whole other kettle of fish)
- Tech companies (because the future is now, old man)
The endgame? Building a portfolio that can stand up to the financial shitstorm of inflation and currency debasement.
Look, I'm not telling you to sell your house and buy Bitcoin. Diversification is still the name of the game. But ignoring hard assets completely? That's like bringing a spoon to a gunfight in today's crazy financial world.
Want to dive deeper into the crypto rabbit hole? Check out my Understanding Cryptocurrency: A Beginner's Guide for Expats for a no-nonsense intro to this wild west of finance.
Also, for more Information on how to invest as an expat.
For a great intro into bitcoin specifically and also into what money should be like check out my review of the bitcoin standard book.
Remember, I'm still figuring this stuff out as I go. But one thing's crystal clear: in a world of monopoly money, hard assets are starting to look pretty damn solid.
Beyond Crypto: Other Alternative Investments I'm Eyeing Up
Alright, so we've talked about Bitcoin and why it's got me all excited. But let's be real – putting all your eggs in one digital basket is about as smart as trying to surf in a hurricane.
So, what else is on my radar? Let's dive in.
Precious Metals: The OG Hard Assets
Gold and silver have been around since forever, and for good reason. These shiny bastards have some serious staying power:
- Can't be printed: Last I checked, governments can't just whip up gold in their basements.
- Universally accepted: Try paying for your groceries with Bitcoin. Now try with gold. Guess which one's easier?
- Tangible AF: You can actually hold these bad boys in your hand. Try doing that with a stock certificate.
Real Estate: More Than Just a Roof Over Your Head
Now, I know what you're thinking. "Adam, I can barely afford rent, let alone buy property." I hear ya. But hear me out:
- Rental income: Become the landlord instead of the tenant.
- Appreciation: Property values tend to go up over time (usually).
- Leverage: Use other people's money to buy assets. Magic!
But let's be real – real estate is a whole other kettle of fish. It's not all passive income and property porn. There's work involved, and it can be as volatile as my mood before my morning coffee.
The Tech Sector: Betting on the Future
Here's where things get interesting. I'm not just looking at physical assets. I'm also eyeing up the companies that are building our sci-fi future:
- AI and machine learning
- Renewable energy
- Biotech and health tech
Why? Because these folks are solving real problems and creating real value. And in a world where traditional assets are looking shakier than a Jenga tower, that's worth something.
The 12% Hurdle: The North Star
Remember that 12% hurdle rate we talked about earlier? That's my North Star for all these investments. If it ain't beating 12%, it ain't worth my time.
Look, I'm not saying I've got it all figured out. Far from it. I'm learning as I go, making mistakes, and hopefully getting a bit smarter each day. But one thing's for sure – sitting on cash or relying solely on traditional investments feels about as safe as juggling chainsaws blindfolded.
Want to know how I'm balancing all this investing stuff with my day job? Spoiler alert, I’m not really but I am learning to make progress anyway and be OK with not managing to do it all.
Remember, this is just my journey. I'm not telling you to go all-in on any of this stuff. Do your own research, understand the risks, and for the love of all that's holy, don't invest more than you can afford to lose.
But if you're like me – tired of feeling like you're on a financial treadmill – then maybe it's time to start looking at alternatives. Because in this crazy world of money printing and economic uncertainty, thinking outside the box isn't just smart – it might be the only way to stay ahead.
The Challenge: Building a Portfolio That Doesn't Suck
Alright, so we've talked about all these fancy alternative investments. But here's the million-dollar question (or should I say, the 12% question): How the hell do we put it all together?
The Portfolio Puzzle: It's Harder Than It Looks
Let me be real with you for a second. Figuring out how to construct a portfolio that can weather any storm is about as easy as nailing jelly to a wall. Here's why:
- Risk vs. Reward: How much risk can you stomach without losing sleep?
- Correlation: You don't want all your eggs dancing to the same tune.
- Liquidity: Because sometimes, you need cash fast.
My Current Head-Scratchers
I'm gonna level with you – I'm still figuring this shit out. Here are some questions keeping me up at night:
- How much Bitcoin is too much Bitcoin? (Is there such a thing?)
- Is physical gold worth the hassle of storage and security?
- How do I balance "safe" investments with potential moonshots?
The Balancing Act: Traditional vs. Alternative
Here's the kicker: I'm not saying we should ditch traditional assets entirely. It's all about finding that sweet spot. But what's the right mix? 60/40? 70/30? 90/10 YOLO style?
Adapting to a Changing World
One thing's for sure: the world isn't standing still, and neither should our portfolios. We need to be ready to pivot faster than a politician during election season.
Look, I don't have all the answers. Hell, some days I feel like I barely have any answers. But I'm learning, I'm adapting, and I'm not afraid to admit when I'm wrong.
The Bottom Line
Building a resilient portfolio in today's world is like trying to hit a moving target while riding a rollercoaster. It's not easy, it's not always fun, but damn, it's necessary.
Remember, I'm not some financial guru. I'm just a guy trying to figure this out, same as you. But if there's one thing I've learned, it's this: the worst strategy is no strategy at all.
So, whether you're all-in on crypto, dabbling in precious metals, or still trying to wrap your head around it all, the important thing is that you're here, you're learning, and you're taking control of your financial future.
Because at the end of the day, that's what this is all about: breaking free from the rat race and building a future on our own terms. It ain't easy, but nothing worth doing ever is.
Your Financial Wake-Up Call?
Alright, let's wrap this financial rollercoaster ride up. If your head's spinning, don't worry – mine still does too. But here's the no-BS summary of what we've covered:
- Traditional investing might be screwing us over big time, thanks to our old frenemies inflation and money printing.
- That 12% hurdle rate? It's a pain in the ass, but ignoring it is like playing financial Russian roulette with your future.
- Hard assets and alternative investments could be our golden ticket out of this mess. Bitcoin, precious metals, real estate – the whole shebang.
- Building a kick-ass portfolio is harder than teaching a cat to swim, but it's do-or-die in this economy.
The School of Hard Knocks (and Harder Assets)
Look, I'm not gonna sugarcoat it. This journey has been about as smooth as a gravel milkshake. I'm still learning, still making mistakes, and yes, still occasionally screaming into my pillow when I check my portfolio. But here's what I know for damn sure:
- The financial game is rigged, but that doesn't mean we can't hack it and win.
- Educating yourself is the best investment you can make. (Cheesy, but true as hell)
- There's no one-size-fits-all solution. What works for me might be financial suicide for you.
- The future's about as predictable as a cat on catnip, but doing nothing is the riskiest move of all.
Your Mission, Should You Choose to Accept It
So, where do we go from here? Well, I'm gonna keep diving deeper into this rabbit hole, and I'm inviting you to jump in with me. Here's your gameplan:
- Take a good, hard look at your finances. Are you really moving forward, or just treading water in a sea of inflation?
- Start educating yourself. Read, watch, listen – absorb everything you can about alternative investments.
- Begin small. You don't have to go all-in overnight. Start with baby steps into the world of hard assets.
- Stay flexible. The only constant in this game is change, so be ready to pivot faster than a politician during election season.
Remember, I'm just a regular Joe trying to figure this stuff out, same as you. I'm not a financial advisor, and this isn't financial advice. It's just me, sharing my journey and my thoughts.
But if there's one thing I want you to take away from all this, it's this: Don't be a passive player in your financial life. Question everything. Challenge the status quo. And for the love of all that's holy, don't let inflation eat your future.
Because at the end of the day, we're not just talking about money. We're talking about freedom. We're talking about taking control of our lives and building a future on our own terms.
It won't be easy. It won't always be fun. But I'll be damned if it isn't worth it.
So, what do you say? Ready to escape the rat race?
