My dad always told me one thing.
Save your money.
This was the piece of advice he gave me the most as a child.
It's not bad advice. But it is outdated. Extremely outdated.
Back when he was a child and young adult...this was sound advice.
In fact, saving your money in a savings account was the key principle in wealth creation. Or at least one of the most important.
This is no longer true.
A savings account in 2021 is merely a value trap. A place to store your money so it's not at risk of being stolen at home. A bank is nothing more than a currency storage yard...with a hefty fee.
Because the truth is...
A bank used to do much much more.
Banks would actually treat you like an appreciated customer. And reward that appreciation with more money in the form of interest.
Not anymore...
I want you to do something right now. I want you to go on google and search for average savings account interest rates. Then, search for the inflation rate. Lastly, search for how much money we've "printed" in the last year or so.
If this is all sounds like financial jargon...well it's because it is.
I explain this phenomena...and all the financial hoopla in this email.
Find out why you're money is burning up faster than a firework on fourth of july.
And how you've been getting played like a fiddle...and who's been doing the playing.
--
I’ll let you in on a dirty little secret.
You are currently $28,529,697,491,037.00 richer than the U.S. government. I’ll simplify that number for you...it’s nearly $29 Trillion.
No, that wasn’t a mistake. But the U.S government is making a bunch. And they are all robbing your ‘savings’ that’s sitting in your bank account. Let me explain why…
1. The government has a spending problem.
People used to believe that the left handled cultural issues and the right worried about fiscal (money and economics related) issues. This is no longer true.
Since the dot-com bubble and it’s subsequent burst in 2001, we’ve had two democratic presidents and two republican presidents. All of them have been irresponsible with our nation's budget.
In 2000 -- U.S. sovereign debt stood at $5.6 Trillion. Today...that number exceeds $28 trillion (hence why you are $28 trillion richer than the U.S. government).
You may be thinking…
”So, who cares. What does this debt have to do with me and my savings?”
I’m glad you asked…
2. Money printing
When a society gets used to a certain type of lifestyle...it becomes increasingly difficult to scale back.
Especially when that ‘society’ is the U.S. government.
Deficit spending (spending while in debt) has only increased in the last 20 years. Politicians promise their constituents everything under the sun to secure votes. And the U.S. dollar (USD) is the global reserve currency (global trade can and usually is -for the time being- conducted in USD).
That’s a lot of jargon. What’s it all mean?
It means the U.S. government will not let debt stop it from spending.
To make matters worse…
The Federal Reserve (the non-governmental agency who controls the money supply) does anything our government demands of it...like a well-behaved pomeranian.
The Federal Reserve (or, ‘The Fed’) does not act autonomously anymore...and creates more USD whenever the U.S. government asks it too. Expanding the money supply on a continuous basis.
“Okay okay Ian...but what does this have to do with my money and my savings??”
This is why.
3. Interest rate suppression
When debt becomes too large to service...what do you do?
Well, you and I may call a debt relief company...get a second job...tighten up our spending...or ask for a raise…
But the U.S. government gets a cheat code...
So what does an entity as large and powerful as the U.S. government do?
They strike a deal with The Fed and suppress interest rates.
The U.S. government creates U.S. bonds and treasuries (you give the U.S. gov. $10 dollars today and they give you $15 in a year) at low-low interest rates...puts them on the market...and only allows The Fed to purchase them.
Before buying...The Fed creates new USD to purchase the U.S. bonds and treasuries with...and then buys up all the new issues the U.S. government just created. In layman's terms...they create new money supply and suppress the interest rate on it.
But these new interest rates affect more than just the newly created bonds and treasuries…
These artificially low interest rates become the new interest rates for commercial banks (commercial loans, auto loans, etc), U.S governmental agencies (Fannie & Freddie Mac - education loans, mortgage loans), checking and savings account interest rates, and almost every other kind of loan/interest deal out there.
Including U.S. bonds and treasuries...assets that used to be the backbone of wealth creation before the 4 idiots I mentioned up there.
And assets that you most likely have in your portfolio.
(more on why this is deadly to your portfolio in my next email)
But wait...there’s more.
4. Inflation
Inflation. I know...it’s a buzz word nowadays. But it’s a real thing.
Let me ask you a question…
If everyone you knew had a yellow lambo...including you...would it still be special?
Okay maybe you’re being difficult and answered yes. Let me ask you another question…
What does it mean to be wealthy?
Own a bunch of assets? Have nice things? Have a never ending supply of money?
Whatever your answer may be...I think we can all agree on one thing…
Being wealthy means you can afford, or have access to, many things without going broke.
Basically you have a lot of money.
But what happens when everyone has a lot of money?
What happens when $100 isn’t…”$100”...anymore?
What happens when $20 can only buy you something that used to cost $5?
What happens when a gallon of gas costs $10…
When groceries cost $200 instead of $100…
When home prices increase by $50,000 a year...
That’s inflation. When the money supply increases at inorganic levels causing prices to soar.
When the amount of money being bid on products and services increases...the prices for said goods and services follows.
This destroys the value of the money sitting in your savings account.
This is how…
1. Low interest rates mean no return/earnings on the money in your savings account...your money isn't growing
2. Prices continue to increase. But the purchasing power of the money in your savings account (earning minimal interest) erodes by the day...you can't buy as much stuff with your money
3. Inflation outpaces interest rates causing the price of goods and services to increase faster than the purchasing power of your dollars...your money is losing value
4. The money sitting in your savings account is like an ice cube in your hand on a hot summer day...slowly dissolving from the hot August sun...melting away into nothing
But there is a way to reclaim your moneys lost value.
And all it takes is a quick 15-minute chat.
If you want to find out how you can stop the government's reckless actions from affecting your savings, then book a call with (Business name) below.
Our team of dedicated financial analysts and planners closely watch the governments ‘bone-headed’ policies and strategies...keeping our clients one-step-ahead of the nightmares many other people, just like you, are unfortunately going to experience.
A FREE 15-minute consultation is yours if you want it.
But you better hurry...we’ve only allocated 100 FREE calls...after we’re fully booked we will resort to our normal $100 fee.
The time to act is now.
>>> Click here to book your FREE 15-minute ‘wealth saving’ consultation
Hope to talk with you soon.
Ian