When I think about reasons to invest outside of the USA, I think about the challenges of my past.
To conquer the struggle of living in prison for multiple decades, I had to build the strongest mindset possible. I learned that I could build a stronger mindset by looking ahead and preparing. By reading every day, I could strengthen my mind and my outlook on life. From reading, I learned how to build confidence and self-esteem, and I believed that I had the power within to change circumstances in my future.
Seven Years of Feast Followed by Seven Years of Famine
One book that I read repeatedly was the Bible. I always remember a Biblical passage from the Book of Genesis that prophesied seven years of plenty which would be followed by seven years of famine. That story convinced me to look ahead and to prepare constantly for what could come in the future.
Like many Americans, I feel as though I live in the greatest country on earth. We have amazing abundance in the United States. Despite all of our many blessings and abundance, we cannot dismiss the possibility of a financial reversal. Our economy moves in cycles, and since the great recession, we’ve been growing immensely.
I concluded my prison term in August of 2013. The Dow Jones Industrial Average traded at 15,112 points. A CNBC article from Thursday, August 15, 2013, shows the pessimism that existed then.
Since then, we’ve enjoyed an amazing recovery. Five years after that dismal report from August of 2013, in August of 2018, the Dow Jones Industrial Average traded at more than 26,000 points. That gain of more than 11,000 points represents a rise of more than 70% over five years.
Is it likely that we will see that same rise over the next five years? It’s possible, of course. But if we did, the Dow Jones Industrial Average would be at 45,000 points in five years!
From my perspective, we should recognize the possibility of a market correction and prepare ourselves appropriately. That’s one reason I’m investing outside of the USA.
Investing in Real Estate Rather than Stocks
Rather than investing in the stock market when I got out of prison, I started to invest in California real estate. And like the stock market surge, real estate values grew incredibly during that five years span. My portfolio of assets grew to more than $5 million and my equity in those properties approached $2 million. The assets were kicking off a revenue stream of more than $35,000 each month-which allowed me to maintain the assets.
But would the U.S. economy continue to grow at such levels?
In good times, it’s easy to grow comfortably numb. Yet the experience of living in prison convinces me that in times of peace, we always should prepare for times of struggle. That’s the reason I changed my investment strategy at the start of 2018. Rather than investing in the USA, I’m investing more to own hard assets outside of the United States.
Every individual must make his or her own investment decisions. And if that individual doesn’t have the skill set, the person should consult trusted advisors. When consulting with those advisors, however, think through the person’s motivation. A stockbroker at a big brokerage house will earn commissions based on several factors, including the value of assets under management. If your broker oversees $1 million worth of your assets, his pool of assets under management looks much better than if you were to divert a portion of your portfolio into different asset classes.
Think about strengths and weaknesses, and then make the best decision for you and your family.
Below I list some reasons that I am investing outside of the United States:
- We have too much political turmoil in the United States.
- Political turmoil can lead to economy policy shifts, which can disrupt investments.
- The stock market has been on a steady climb since the lows of the recession and a correction in the stock market could hurt all investments.
- The US housing market has reached such heights that it is difficult for working-class families to purchase a home.
- Technology is making it easier to manage assets outside of the United States, which may lead to more outflows of capital by ordinary investors.
- Thousands from the baby boomer generation are inclined to live as expats, in countries where their fixed income dollars will provide a higher standard of living at a lower cost.
- Investing in land outside of the USA will always have value, even in times of famine.