What is the current state of the economy and what is really going on?
What is the medium-term outlook for the economy?
Where is the opportunity going to be?
Chris Miles has been in the industry for many years. His experience and wisdom helps him make predictions of what will happen later on and position himself to take advantage of potential opportunities.
Tune in to find your opportunity.
Listen to our Podcast:
https://www.blogtalkradio.com/moneyripples/2020/09/16/435--skate-to-where-the-puck-is-going
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Hello! My fellow Ripplers! This is Chris Miles, your Cash Flow Expert and Anti-Financial Advisor. And coming to you from Tampa, Florida today. So I thought I would do a special little show for you guys, because this show is for you. And It’s about you. It’s about those of you who work so hard for your money, and you want your money to start working harder for you. Now! So you have all that cash flow that freedom, that prosperity today, not 30 or 40 years from now, but right now, so you can have that life that you love. Doing what you love being with those you love. And on top of that, as Ripplers, you’re not here for your own prosperity, but you’re here to create a bigger ripple effect in the lives of others by blessing others lives, as you’re blessed as well. Guys, I’m so proud to be a Rippler with you.
I’m proud that I can share this and create ripple effects through you guys. Whether you’re bingeing, we’re sharing this with other people, creating massively great conversations, something that’s different, something that’s real, a conversation. That’s not just the mainstream norm that really leads to no success when it comes to financial success and you guys are doing it different. You guys are the rebels and I love you for it. So thank you so much for following. Here’s reminder, check our website WWW.MONEYRIPPLES.COM There’s great information there. And remember to subscribe to our YouTube channel, Chris Miles with Money Ripples, you can actually see a lots of different videos and including these shows on there as well. So check that out. Today, guys. You know, a, lot’s been on my mind about the current state of the economy of whatnot what’s going on, right? You know, and I’ve even mentioned some things to you guys last week.
And I want to talk about, you know, the questions that often come up from you guys, whether you’re hiring me as a consultant or even many of you guys have been asking me, even if you’ve been reaching out to me about you know, how to set up these max rate of return? These max ROI, infinite banking policies, or these whole life policies and how does design them? And what to do? Because I know many of you guys are wondering, what are we doing right now? Like, what is happening? Because if you look at the economy in the world right now, it’s kind of taken a breath, isn’t it? Like all the things we thought would happen that was going to come crashing down is kind of been delayed. It’s like a plane crashing, you know, the wings have fallen off, but somehow these temporary little paper wings have been put onto it.
So it kind of glides down, but it’s still kind of coming down in a way that is just delaying the crash. Right? And that’s what we’re noticing right now is like, it feels like this is the calm before the storm is almost like this is the eye of the hurricane, you know, the first storm passed through. And then we’re like, Oh! Are we done? The skies are clear. Look at it. Of course, ironically, I’m calling from talking from Tampa, Florida just as a hurricane Sally passed by. Right?. But you know, but then the next wave that comes, which is often even more dangerous, which it could be the back end of the hurricane. Right? And that’s what I foresee happening with a storm. And I’m a mastermind of that right now with a bunch of real estate investors. And we’ve been talking about, you know, what are the things to look for?
And of course, they’re talking about, you know, seeing much worse things happening towards the end of 2021 and into 2022. So this is over a year away. Right? Now, I think one thing we could agree upon is that until the election, there’s not going to be a whole lot happening to hurt the average American, right? They’re going to do everything they can to prop up the economy, make it look good for election sake. After that point, that’s where it becomes questionable. And that’s where we wonder, like, will it start to tank? I mean, will we see the stock market tank more than it has been after hitting new highs? We’ll start tanking after, you know, not initially after the election, I think, and I believe that Donald Trump will get re-elected. Right? But if after that happens, you know, will the market kind to continue to go up? And then, come down as, you know, they start to realize, Hey, we can’t keep paying your bills forever guys.
Sorry. And then we start to see, as we take away that money, see what really is happening beneath the surface. Right? It’s like pulling back the curtain and seeing what’s really behind that curtain. And I think that’s, what’s going to happen. Now, we kind of go with that quote that Wayne Gretzky’s father told him, right? Which is skate to where the puck’s going to be, you know, and that sort of thing. And yeah, no, if you’re a hockey fan, you’re gonna say, well, that’s a dumb advice, you know? Okay. Whatever. The fact is where’s their opportunity going to be? Right? Where do we go? You know, where you find that? what do we do in the meantime? Now, I honestly do not know all the things that’s going to happen, because the truth is that we’re just guessing right now.
Right? We do know more short term, but we can kind of see what’s leading up to the events. We do know that there’s a lot of money being pumped into our economy from money that’s not ours. Right? This is money that has been generated that the feds are trying to give for the government to pump out to all the rest of us. Their goal. If you’re trying to look at economics is try to keep the economy moving. Right?, To keep it pumping, you know, keep, keep blood pumping, right? There’s gotta be flow. If money’s not flowing, everything dies, right? So they gotta keep pumping this blood money. You know, that sounds horrible. This money like blood, it’s got to keep flowing to curate life in that economy once that money stops and where that money will stop, we’ll determine what happens with these different markets and whether different opportunities will show up because the best opportunities are often where the biggest pain happens.
Right? I think one of the biggest places that we will see opportunity, not quite yet. Although I think we’re starting to see it a little bit, but commercial real estate, you know, especially with business buildings, it may not ever come back. Right? It could start crashing down and shrink accordingly because people won’t be looking for physical offices. Now, I do agree that a telecommuting and whatnot has it’s place. I think there’ll be other types of you know, virtual offices and things like that will come and pop up. And that can be an opportunity too. But I think for big part, you’re going to see a lot of these commercial buildings have to get converted to something else. Right? And I think about a story of Joseph Kennedy Sr., This is Robert Kennedy and John F. Kennedy’s father. Right?
I was studying up on him, a very kind of controversial guy. When you think about it, this guy, I mean, he definitely had a pretty good ego. He was definitely smart. If anything, he was well-informed and well connected. If there’s anything that you say on the positive side, negative side, did he exploit that, you could argue that. Right? But I mean, the guy became a Bank President age of 25 back in the teens, around 1914. And the guy also like in the 1920s, decided to start his own investment firm. He worked with an investment firm for a while. And then he started his own, primarily doing things like insider trading and market manipulation, things that you see, like in the movie trading places. Right? He was highly involved in that kind of stuff, which ironically, he became the head of the SEC, the Securities Exchange Commission, right?
When it first opened up, he was one of the guys that helped spearhead that with Roosevelt. I thought that was ironic. Cause he was the very guy that would know how to do it since he had broken, what would become later laws against that kind of stuff? But he was definitely well-informed and well-connected. That’s why, you know, it’s interesting. He says that, you know, because he heard tips from a shoe shine boy, back in 1929, that he figured that the stock market was going to crash because the shoe shine boy was giving stock tips. Whether that’s true or not, it’s another story, but you can’t deny the fact that, you know, when 1929 hit, he started doing the thing that people weren’t doing the market, he had already started betting against the market. He started shorting the market, meaning that, If the market went down and he would make money.
And who knows that there’s manipulation behind that too. But the thing is he made money there. Now in 1929, he was worth about $4 million. But over the course of the great depression, he not only did he have his own cash, but he also was good at raising money too. Right? He was able to get other people’s money involved in sell and kind of sell those opportunities. He did a few things, you know one, he was buying up entertainment industries towards right towards the beginning of the depression, buying, you know theaters and studios, even radio, he helped create RKO radio. Right? He even did things with buying film production companies and whatnot. When they were going broke, he found opportunity where things were on sale. He was really good at buying things that value. He also, he even got, he got ahead of the curve.
Of course, he went into partners with Franklin Roosevelt’s son to do a Scotch Whiskey Shipping Company. So right when the prohibition ended, they were right there to start shipping out alcohol right off the get-go made lots of, lots of money off alcohol right there on 1933. Eventually he went to real estate. What did he buy? He bought commercial real estate in New York City. So he went from in 1929 worth 4 million to just six years later in 1935 worth over $180 million, which in today’s dollars would be multi-billionaire right? Well, what did he do? He went, he looked for whether it would be opportunity in the future. He was looking ahead if it was just a little bit ahead, he didn’t have to be a lot ahead. He just had to be a little bit, he was looking for opportunities.
He was looking to see where, you know, essentially where the puck was going. Right? He was looking to see what was going on with the markets and what was happening. And so, again, I’m not going to predict the markets. I’m not giving investment advice here at all. The one thing I know for sure is that many more of you have sort of reach out saying, where do we store cash? Right. You can keep it in savings. You keep it somewhere short term. I’ve had a lot of you say, let’s set up these whole life policies and do that. And that could be a great place to store cash. Even if you don’t know where to go. Even just saying, I don’t trust anything right now. And maybe I won’t for the next few years, at least I can store it somewhere where it can be earning tax free returns and it can be good.
And that’s great. Right? But you know, the truth is, is that you want to have cash. You want to have capital it’s okay to invest a little bit. Now I know of trying to buy properties right now. It’s getting harder. It’s getting harder to find. There’s still good properties out there, like for turnkey real estate, but it’s harder. You have to really fight to get these properties. So there’s not as much. And that’s okay if you’ve got cash sitting on the side a little bit, no problem. You know, just make sure it’s doing something in the meantime, or it’s available to be in your possession short term. Right? Because I really believe that when you start getting towards the latter end of 2021 or so, we will be seeing more opportunities for bigger deals. And you will be just like you were maybe in 2009, 2010 saying, Oh! Now I want the cash.
Right? And that’s when people don’t have it. Here’s where I see is going to happen. Here’s what I can predict. And I think will happen is that there will be a percentage of the population that will not have cash. Right now everybody’s feeling great. Like people are kind of starting to put money away. But I think a lot of people, what they’ve been doing right now is we’ve been propping-up the stock market. We’ve been Jacking that thing up by throwing more money in, that’s going to become the place that dumb money goes into. Right? You’re gonna see more people saying I’ve got cash. And then they’ll say that they’ve got cash early. They got cash in the stock market. You know? And I mentioned last week, there’s 43% of retail investors. The normal trade, people trading in the markets are leveraging their money in the market, which means that they’re borrowing cash from the broker to go and invest with it.
Which means that they lose, they lose double, right? It creates this. If they’re doing with options, they can lose everything. I remember had a client who was trading options before I was coaching him. This is back when I was a stock and options coach. And I remember he came to me. He said, okay, Chris, yeah, I’m investing in this option right here. I’m like, Hey! You should start the trade stocks first, get, you know, get your feet wet first there because whatever you are as a stock trader, you’re at least one level worse as an option trader cause options can go up higher, but you can lose more cash too. They’re way more volatile. And they’re not as cut and dry as stocks where stocks a little bit easier not to lose money or not to lose a lot of money in these things you can literally lose all of your money potentially in these kinds of options.
Well, anyways, he decided to do his thing. He traded on margin. The company did what was called a Margin Call, which means that when he, so he bought on his a call option. So when it goes to the price, the stock goes up, you make lots of money. Well, the stock price are going down, which means he was losing accelerated mounts of money. Well, because 50% of that money was borrowed from the broker. The broker knew exactly what price to say you’re out. So they got to a certain price. That’s Nope, for selling it out for you before you can even sell it, we’re going to sell it for you because we want our money back. They got all their money back. And when he had left was about 12%. He lost 88% of his money. And man, that guy was depressed.
He was like, man, Chris, like, I can’t believe how bad it was. Oh my goodness! Like, I don’t know what I’m going to do. And I seriously thought he was going to be a little bit like depressed or even suicidal. I was wondering if we’re going to even have calls after that, but I’ll tell you that little weapon, right? That taught him a big lesson. He was the most coachable client I had after that point. He wanted to make sure he did not lose money. He was not going to be gambling on options and trying to learn that the trading game. But that’s the thing. It’s still a game. You’re still gambling. Right? I was just trying to teach them to do it in a way that wasn’t a risky, but that’s the thing guys, is that there are a lot of people doing that kind of stuff right now.
And they’re not feeling you’re not seeing these effects, but there will be effects of this. There will be effects, where people will be losing our cash or there won’t be access to cash. I think the banks will keep restricting more and more money. They’re already doing it, but they’re being kind of quiet about it. You know, they’re saying like, Hey, if you want these PPP loans and idle loans for your business, great. But when it comes to the consumer, trying to get cash out, there making it tougher on you, aren’t they? Any of you guys have done this? No. If you took my advice from over six months ago about trying to get the home making and a lot of credit, it was way easier back in March than it is today to get that money out and they’re restricting how much you can get out.
And so there’s going to be this, I believe this cash crisis, this affordability crisis. I think there will be some inflationary things happening. The price of lumber, you know, the last year has gone up more than double, almost triple from last year. We haven’t seen the prices of new home construction go up as much yet, but there will be some of those things going up. There’s going to be a point where I think people are going to be strapped for cash. And this is where your opportunity will be is where people need something. You can help provide it. If you become the bank and bank start restricting money, you can become the bank. You can start lending your money and you can name your terms and name your interest rates. As long as it’s pretty competitive with what other people are doing. You can make more that way as well as being essentially a lender, right?
I think there’s going to be opportunities, definitely for buying assets for cheap. Possibly not like I said, not in all the real estate game, but I think there will be pockets of things, especially around commercial real estate. You’re going to see some of this stuff. So there’s going to be opportunities for sure. But you know, if you’re looking to store cash right now, maybe it’s just a savings account. Maybe it’s in whole life insurance, so you can get better return and get it protected from lawsuits and creditors, you know, whatever it might be. You know, the thing is that you want to make sure you are ready, when this opportunity comes up. Doesn’t mean you don’t invest today. That’s why I’ve got people right now. Consulting with me. We’re still buying investments. I’m still buying investments, but I’m still letting more cash build up at the same time.
So I’m not investing all my cash right now. Cause I know the best opportunities are yet to come. And I promise you that’s gonna be the same for you guys. So my recommendation is, you know, start getting some cash, get liquid. I’ve been saying this for months, I’m going to continue to say it to get as liquid as you can, you know, get moved money out of places that it may not be there tomorrow. Especially if they’re arbitrary numbers that are based on markets. You know, again, I can’t recommend you just cash out, you know, stocks and things like that. But you know, if you’re looking for getting cash, you need to understand that what you have. If it’s just numbers on a piece of paper, it’s not real. It’s not real until you actually have it in hand guys. That’s my advice is to get liquid. My advice is to look, to see where opportunities are coming up, look to where people are going to need money. And then that is where you’re going to invest. Guys. I hope we make it a wonderful and prosperous week. We’ll see you later.
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