My financial strategy is an aggressive yet responsible wealth building strategy. The strategy is implemented through a frugal lifestyle emphasizing saving and budgeting, a pursuit of business and a pursuit of cash flow via stocks, real estate and online income streams.
A Cash Flow Focus
When it comes to business, real estate and investing, I aim to acquire and build cash flows. This might be a website that earns a few hundred dollars a month in advertising revenue. It may be an investment property that cash flows via rental income. Or it may be a portfolio of high yielding dividend stocks.
Positioning Based On Government Involvement
A major factor in anyone’s financial future (especially young individuals) is the government’s involvement in the economy and in our markets. While we live in a democracy, it can still feel like there is nothing we can do about the government’s actions. What you can do, however, is attempt to profit from the intended and unintended consequences of government policy.
It is my view that the American government’s debt is unsustainable and getting worse. The consequence of our government’s reckless fiscal policy will be one of a devalued dollar and high inflation. I aim to invest in instruments that will benefit or hold their value in an inflationary environment.
Best Opportunities Abroad?
Sadly, I am becoming more convinced each day that America’s best days economically may be behind her. In addition to the debt and inflation threat described above, we simply do not pursue economic growth and individual growth like we did in our past. At the same time, there are countries such as China that are investing heavily in a long sustainable economic growth (one that we may have never seen before). Whether it is business or investing in companies, I am increasingly paying attention to opportunities abroad.
Investing / Trading Style
While patiently waiting for attractive entry points for strong stocks, I also swing trade based on market momentum. Especially in a volatile trading environment like we have gotten used to recently, there are often times when stocks, sectors or the broad market can find itself overbought or oversold. If the opportunity arises, I try and take advantage of such a condition.
For longer term investments, I like multi-national American companies that do a majority of their business outside the United States. I like countries that have a growing middle class, and I like commodities including precious metals, oil and agricultural commodities.
Despite the American way of buying what you cannot afford, I attempt to live a strict frugal lifestyle, saving money each month and investing in cash flowing assets. My goal is financial security; not to keep up with the Joneses. By spending less than I earn each month, I will hopefully build a financial future that will provide security, flexibility and the capital to invest in worthwhile opportunities.
The 20s Advantage
If you are in your 20s, you’re in a great position. First, it’s important to position your mindset and your view towards your finances to be one that prefers saving and investing over spending, entrepreneurship over employment and cash flow over winning the lottery.
Second, it’s imperative to start now with your strategy. Even if you’re only saving & investing $5 a month, it is the right move to make. Start educating yourself on ways to build a portfolio of cash flows or income streams. This blog is a great place to start!