Nick Hodge,
Publisher
Oct. 15, 2021
Couple of things to get off my chest this week…
The things I've been writing to you about for a long time, not just over the past year, but the past half-decade or so are now playing out in a very big way.
I would point to things like a mass exodus from high tax jurisdictions to low tax jurisdictions. For example, leaving Maryland to go to a no income tax state like Washington state, or my partner moving his family to Texas to take advantage of the low tax regime there. We did this years ago.
Now it’s easy to see that trend snowballing.
All these companies are fleeing California to go to Texas. Elon Musk is taking Tesla there, announced last week.
It’s just one of the trends we’ve identified that are making the rich richer and the poor poorer.
So let me talk about that for a second. The top 1% earners in the country, that means if you earn more than half a million dollars a year — $500,000 in net income — you’re in the 1%.
That 1% now owns as much wealth as the middle 60%, the middle class.
They're defining the middle class now as income of $27,000 to $141,000. So if you're making $140,000 a year, you're at the upper end of the middle class
That's not your fault. That's the fault of your government and the monetary policy that it pursues alongside the Federal Reserve, which is supposed to be a non-governmental entity, that makes your dollars worthless and things cost more.
Understanding the Impact of Inflation
Let's talk about things costing more, which has been a very firm trend for the past year, while the government and the mainstream media said that it was transitory.
"This inflation is going to be transitory,” is what they said for months. They were blaming it on supply chain bottlenecks, and yet prices for everything continue to go up.
I've laid out how to profit from rising inflation for the past year. You own the assets, you own the commodities, that are inflating in price because of monetary devaluation and that are also being driven by the larger trends at hand.
The larger trends at hand, in this case, are the electrification of everything and trillions being spent to reduce the amount of carbon in the atmosphere, which requires a lot of commodities to produce batteries, and solar panels, and wind turbines, etc.
I have known this for a long time.
I've also known that the government’s policies create the wealth inequality that I just described.
And so I made up my mind to be on the right side of that wealth divide.
So, you might be feeling that it's becoming increasingly miserable if you're on the other side of that divide, which is why I've been preaching for years and years and years that being wealthy or having money or being in that 1%, isn't the goal in and of itself, but it allows you to live a much easier life and do the things that you want to do.
How Should Individual Investors Do That?
Well, not by following the mainstream and not by relying on other people and certainly not by relying on the government. Here's what I mean by that...
The mainstream was telling you that inflation didn't exist for the past year.
I told you a couple of weeks ago about how the guy I keep a half a million bucks with just sort of as a yardstick for my own money management — to see how well I do. The sectors he’s had me most heavily weighted in are tech, financials, and healthcare while the top-performing sectors of the year are energy and real estate.
A professional money manager isn't allocating my capital to where it performs the best. Only I can do that for myself. Just like only you can do that for yourself.
Now you're probably thinking, “Well, I don't know what sectors are outperforming.”
And that's where I'm going to tell you: "Well, that's what I do!"
I write newsletters every week to tell you why the mainstream doesn't know what the fuck they're talking about and how you can manage your money for yourself.
And now is the perfect time to explain that to you because Bloomberg was out with an article just this week with a white flag, waving, saying, "price inflation is not transitory, it's here to stay." The mainstream is now admitting defeat on inflation. They were wrong in a big way.
You had the entire mainstream financial media press and money managers for the past year on the completely wrong side of the inflation trade.
They're on the wrong side of a lot of trades very often because the market has left them behind, the retail investor has risen and can now invest on their own via funds and ETFs, which is why you've seen the rise of WallStreetBets, etc.
Are you concentrating your wealth is the question?
Are you getting to the other side of that divide that's only getting worse?
Remember what I just said: the top of 1% who earn $500,000 a year or more now own as much wealth as the entire middle class, which cuts off at $141,000 in earnings per year.
It's hard to get out of that middle class when the entire system — financial, media, and government — is set up to keep you in it.
That's their tax base.
So they're not on your side.
And I’ll continue to say until you make it to the other side of that wealth divide, you’ll continue to be at the mercy of what I call the system — by getting caught up in traditional financial planners and earning average market returns
They're not doing what's best for your bottom line.
I'll continue to preach, I'll continue to say the best place to put your money is in an account that you manage by tuning out the noise... by tuning out the narratives of Wall Street... and by listening to independent thinkers and money managers if you can't figure it all out for yourself.
Call it like you see it,
Nick Hodge
Editor, Daily Profit Cycle