By Mike Johnson
Here’s a kick in the head. Everything you’ve been taught about saving and investing is wrong. Your savings aren’t growing, they’re melting.
For decades, conventional wisdom has taught us to save a portion of our paychecks and deposit them in an IRA, 401k or other account that will invest our money. The miracle of compound interest and earnings is then supposed to work its magic over our 40-year working career and turn our tens of thousands into a few million. We can then retire at age 65 and live the high life off the interest our savings generate.
Millions of seniors who did everything “right” are learning the hard way that conventional wisdom is no longer true and may have even been a giant lie that was purposely told to steal their money.
We now live in a world where financial repression is government policy. Governments have rigged the game to keep interest rates very low, inflation very high and taxes on illusionary “gains” very unfair.
So what does this mean to your retirement savings?
1. You’re not earning much on your investments, often less than 3%.
2. Real inflation is running nearly 10% (ShadowStats.com). Governments get away with saying inflation is running less than 2% because they keep changing the formula used to calculate inflation. This allows them to keep cost of living increases lower on their social security payments and make their management of the economy look far better than reality.
3. A 3% return on your investment is actually a 7% loss in purchasing power once you account for real inflation. But the amount of dollars in your account grew by 3% so the government considers that a gain. You are then taxed on that “gain” that is actually a 7% purchasing power loss.
So in effect, despite your investments showing an increase, inflation and taxes steal all those gains plus another 7 to 8%.
If you need more proof of this, I highly recommend a visit to CPA DanielAmerman.com. He does a terrific job of explaining this with many examples and charts.
The longer you save and invest, the more purchasing power you lose. The more you save and invest, the more purchasing power you lose. You can’t make it up on volume.
No matter what your rosy investment account statement says, you are actually LOSING massive amounts of purchasing power every day, every week and every year. Saving and investing is a losing proposition despite it looking like a winner!
This is no accident. Financial repression like this makes fixed government debts easier to pay with cheaper and cheaper dollars and creates additional unfair tax revenue for those governments. This is all done at the expense of savers and investors. Only 1 in 10,000 investors realizes what’s happening.
But despite today’s manipulated and corrupt financial system, there is still one investment strategy that protects you from low interest rates, high inflation and unfair taxes on illusionary gains.
That strategy is buying income properties with fixed-rate, borrowed money. That’s exactly what I teach here.
This not only allows you to GAIN purchasing power while all your friends are blissfully taking losses, it also provides a 95% passive income stream that allows you to retire within 12 months. This strategy can earn massive wealth and earn massive time all in one fell swoop!
So the bad news is that it’s no longer possible to save and invest your way to retirement.
The good news is that it’s possible and spectacularly faster to just BUY your way to an earlier retirement.
This will take some self-education.You’ll need to learn new information and unlearn old information. You’ll need to become your own expert.
The alternative is to keep feeding the thievery and reach age 65 with a small fraction of what you started with.
Keep reading my other posts to learn how you can escape this theft and move into a richer, more secure and faster 95% passive retirement.
My Million Dollar Letter shares all the details of how to achieve this brilliant alternative.