Planning

We investors are always trying to figure out what and when the next bubble and crash will be. If we guess correctly, we will have an edge, because we’ll be prepared to scoop up a lot of assets at a much lower price.

Although I foresaw a big market crash in the next 2/3 years, I think that the fact that Mr. Trump was elected president of the US will change this quite a bit. I believe that markets will actually start to go up, the American economy will recover and the European economies will simply follow the pattern.

But what will cause the next crash? If you know about economy, you know that crashes are inevitable, because the economy works in cycles. And my gut has been telling me that the current markets are too high to be sustainable.

But what exactly will cause the crash? My answer may be a little bit out of the box. I believe that the next big bubble will be higher education. Let us take a look at the facts. So first, let us recall recent history:

…what would I do to become a millionaire? This was such a good exercise… maybe I will be hustling to make it happen!

OK, I would wake at age 20. I estimate it would take me 5-7 years to reach a million bucks of net worth. During this time, I would be living as frugally as possible and working part-time for the first 2 years to cover my expenses and build up my credit score (through secure loans).

The “Education”

• 20 years old: For starters, I would not have done my PhD; instead, I would get a PhD directly from millionaires. Think about it, people spend tens or even hundreds of thousands on a degree to learn from professors, but the majority spends less than $1000 over their lifetime on books. Why would you not want to read a book written by a millionaire, who is basically giving you his formula in exchange of something like 10 bucks? I would read all these Books, understand that money is a tool, which I should use and not be used for.OK, so education is almost solved (after all at this point I know all the formulas from the major businessman on earth), but to top it off I would look for a mentor. Knock on doors and show my excitement to learn from them. I estimate this would take three to six months.

My dear dudes,

Because I bought another Rental Property, I spent my Sunday redefining my plan for the next 6-10 years. Here it is:

First, note that I bought a lot of Real Estate this year (3 properties and another one coming up soon) as I found what I think are excellent deals. I am getting fixed-rate 30-year mortgages at less than 5%*. I think that inflation and interest rates will be low for the next 2,5 – 5 years. After that, I think that both will raise, but all bets are off regarding figures**. I would like to limit my real estate portfolio to 50-60% of my overall net worth, in the long run.

My plan revolves around inflation, interest rates and liquidity. Based on the situation, I will take appropriate action each year. There will be years in which I care about liquidity (L) (which means that I will not amortize my mortgages and buy assets that are not liquid, such as real estate) and years in which I care little about my liquidity (NL) (just like this year), in which I will try to pay off debt as quickly as I can, and have non-liquid assets that either have capital appreciation or high yields.