IT’S STARTING: The CRAZIEST Opportunity to Build Wealth is Upon Us

This year you’ll be given the craziest opportunity to build wealth and we’ll go over everything you need to do to make 2022 and 2023 your best financial years yet. First, obviously, let’s talk about what’s happening to the economy right now. Inflation is at 8.3 percent which is tremendously high. If you compare it to the last ten years where it hovered in that two to three percent range. It hasn’t been this high in 40 years and not only that but we saw the U.S economy shrink by 1.4 percent. In the first quarter of 2022, which is exactly the opposite of what happened in all of 2021. More and more Americans are worried with six out of ten concerned that a major recession is right around the corner. On May 4th the federal reserve announced an additional 0.5 interest rate hike which would bring the federal funds rate to between 0.75 to 1. That means that just two months after the previous hike of 0.25 in March. We are seeing another really drastic bump in increasing interest rates combined with supply chain issues, the Russia-Ukraine war and an overheated economy. 

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As a result of loose monetary policy has led to some pretty crazy recent events this quantitative tightening is in stark contrast to the quantitative easing. We saw during the first two years of the pandemic when central banks went out and bought a ton of assets like all the different types of bonds right so then they realized oh shoot there’s too. Much money in the economy inflation is way too high. Now, they are trying to actually sell those assets that they bought more specifically, the Fed is trying to sell about 95 billion dollars in bonds from their balance sheet each month which would thereby reduce liquidity by about one trillion dollars. This year so-called experts have been calling this recession since 2009 and it looks like there’s a chance that they could finally be right. 

Of course, we may not see a global recession just yet. It could take months to hit or longer. However, this recession could be different, lasting longer than previous recessions due to stagflation, the oil crisis, and, of course, the rising interest rates experts are suggesting that we could see a u-shaped recession meaning the bottom could last a year or longer before recovery. But, no, I’m not calling that there is going to be a recession because studies show that even economists correctly predicted only 5 out of 153 recessions between 1992 and 2014. 

But I will say that the risk is higher today than it was a few months ago. So, now to make money time is of the essence and this has been proven time and time again as most millionaires are actually created from recessions so first let’s talk about investing your money during a time like this since 1937 recessions have resulted in an average decline in the S P 500 of about 32 percent right now. The SP 500 is down about 16 year-to-date the Dow Jones is down 12 and, of course, the really tech-heavy NASDAQ is down more than double that at 25 declines. Historically, market behavior has been shown to follow some trends before the recession, for example, the markets usually peak three to six months before a recession falling about 10 to 15 ahead of it looking at the yield curve. We can see that it’s starting to flatten and it actually became negative for a little bit in April of this year now with all that context.

Let’s talk about whether or not you should be buying the dip. The thing with stocks is that people get rich with them in the long term but people get poor from them in the short term why because of human emotion as much as I’d like to say that retail investors make financially sound decisions all the time that just is not the case and when you buy a stock and expect to make a profit in the short term. This is actually extremely dangerous and if it falls then emotions take over and you sell. If it is a sound company with actual earnings and growth. Then the correct thing to do is actually hold long term until you think that company is on the decline. The stock market is not rational and a company’s share price is not always indicative of how the company is doing fundamentally. That is why if you are considering buying the dip expect to hold for 10 years or longer. If you don’t then the markets could very well keep dipping and you might liquidate your position at a loss. Essentially, you’ll be disappointed. If you expect the market to bounce back up to new highs very soon so looking back you guys yes it does make a lot of sense why we are seeing the slump in prices the pandemic injected a lot of money into the economy. A lot of the growth companies saw huge growth rates and people loved seeing that. As a result, there were more buyers for stocks than sellers. The cyber growth is far from sustainable and those sky-high pe ratios meant hype was really baked into the prices. 

We just need to sort of zoom out to see that this is still right now. The SP 500 is about 10 higher than it was at the beginning of 2020 and right now. We are at more of a hiccup in the economy just because stocks have been going down does not mean a global recession is a hundred percent imminent. So, for now consider s p 500 index funds dividend stocks which could actually benefit from inflation and, of course, I bonds which are virtually risk-free investments that are backed by the US government and fun fact they’re actually paying over nine percent interest per year. Warren Buffett really said that the best investment in a diverse mix of companies over a long period of time is how you get wealthy and don’t put money into individual companies. Unless you have intense conviction about them the data proves this as index funds on average vastly outperform investors who try to pick individual companies. The reason a lot of companies fail and a handful of them will actually drive returns way more than the other hundreds or thousands do these results. In the fact that tails drive returns where tails are that handful of companies that actually make a really big difference in the performance, the same exact thing happened with Warren Buffett right. A handful of companies are what made him the greatest investor of all time. 

If you remove those companies his performance is actually pretty average and unimpressive. So, if you can dollar cost average into the overall market through index funds because those future winners will likely be in your portfolio now. When it comes to crypto, it’s been chaotic to say the least you might have seen UST being de-pegged resulting in a catastrophic wipeout of Luna. A lot of people were really heavy on this project and it was a shock to most of the crypto community USDT also slipped below the one-dollar peg. This past week and crypto as a whole are down significantly with Bitcoin dropping under 30 000. I’m going to echo the same sentiment as I did for stocks and that is since I do believe in crypto. I will put the dollar cost into the top coins. I really do think that the altcoin market has lost a lot of trust and the only way to make money in the long term is to hold coins that should stay alive forever. Those for me are going to be bitcoin and Ethereum. Overall, this is a better buying opportunity today than it was yesterday. It will be a better buying opportunity today than it will be a decade or two down the line when everything is way more expensive. So, if your intention is to make long-term wealth hey hopefully you can see the opportunities that exist today in this current market now. Unfortunately, if the markets do go down and we enter a recession, it’s going to cause a lot of problems for a lot of people. 

As a result of economic factors including inflation 64% of Americans are actually living paycheck to paycheck which, of course, means that you don’t have any extra income to invest into assets. This is really sad because having financial difficulties or living paycheck to paycheck really introduces a lot of stress to people and like I mentioned if you’re paycheck to paycheck. You’re only paying for the necessities of life. You don’t have any extra income to invest in assets and stocks and crypto. The result is a stagnation of your net worth, so we’ve talked about the current economy. We’ve talked about how you should possibly invest in your money. But, now let’s talk about the most important thing which is actually increasing your income right now. I really do think that this is a very special time where you’re able to significantly increase the amount of money. You’re taking home, you’re really going to set yourself up for financial success in the long term now is the easiest time to get rich I truly believe that. But, I will say that it’s only going to get harder and harder to make money. The internet has really allowed anyone access to entrepreneurship and entrepreneurship. You are something I talk a lot about on this channel and it really is the ultimate way for you to start making significantly more money. I’m going to show you guys how and it really all comes down to starting a service-based business here’s the formula. 

The first step is to find a high-income skill that can be literally anything but for the sake of this video. I’m going to use the example of learning a productivity platform like click up or notion. If you have a high-income skill like this, you can actually sell this as a service to clients and that brings us to our second step which is to actually start getting clients. The first clients you get are going to be quite difficult. But, through some word of mouth and through more marketing. You’ll gradually build your roster of people that you work with at some point. You’re going to hit a ceiling because you no longer can trade your time for money when this happens. You’re going to want to start building a team. The team is going to allow you to actually get more clients and start building passive income, if you do these three steps the amount of money. You’re going to be able to make it go up dramatically. It is extremely doable for a service-based business to start hitting six figures and when you’re making that much money you just have so much money left over that you can disperse into assets and investments. If you can make a lot of money right now, when the markets are down or if we enter a recession that is going to be an absolute game-changer, more people became millionaires during the great depression than in any other time in American history. Now I’m not saying, we’re in a great depression right now. But, I am saying that when things are hard the opportunity to make money becomes that much more important.

This article is a transcription of a video made by Charlie Chang

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