Family Investing in Belize
I have two sisters, Julie and Christina, and they’re now investing in Belize with me. Both of them are mothers of two children and both of them are close to my wife and me in age. We’re all in our 50s as I write this article, in 2018. I attach photographs of my sisters and me, along with our mother—who passed away in 2017.
When I told my sisters that my wife and I were investing in Belize, they asked me why. I told them the same reasons that I offered to others when I wrote the previous article. Anyone can access that article by clicking the following link:
My sisters have built great careers working in leadership for large companies. For decades, they’ve been investing in retirement accounts. Those retirement accounts are tied to the stock market.
But my sisters are not active traders. Each month, a portion of earnings from their paychecks gets diverted into a stock portfolio that a broker picks on their behalf.
That strategy has worked well over the past decade. But my sisters remember the steep losses from the recession, which began a decade ago. Index averages lost more than 50% of their value. A retirement account with $500,000 in assets tied to the stock market dropped to $250,000 in value. It was very difficult to experience that loss.
I was in prison during the great recession. But anyone could read the newspapers and feel the pain of economic turmoil. Besides the stock market implosion, the housing market went into a deep slump. Credit dried up. Earnings took enormous hits.
When I concluded my prison term, in 2013, the economy began to recover. Index averages started to move higher and the housing market started to recover. We’ve enjoyed several years of economic growth.
I consider myself extremely fortunate to have gotten out of prison when I did. Since I put a strategy in place to begin acquiring real estate assets, I’ve benefited enormously with the rise in housing prices. And my sisters benefited as the stock market rose to new highs.
But as I told my sisters, the stock market doesn’t go up in a straight line. If we look at the market historically, we know that index averages enjoy good years and bad years. We know that economies expand and contract. When they expand, we sometimes forget about the pain of contractions. When the market is going higher, we sometimes forget about the pain of when it drops lower.
When my sisters and I discussed investments, I told them more about why I felt optimistic about investments outside of the US. For one thing, I see the US economy from a different lens than others. Rather than seeing all optimism on the horizon, I see the following threats:
Threats to the US economy:
- Debt Levels: The United States has higher debt levels than at any time in our history. We can service those high debt levels while the economy is expanding and tax revenues are rising. But if the economy were to contract, it would be more difficult to service those debt levels. And although I’m not a trained economist, I anticipate that those high debt levels could prove difficult to the stock market. Interest rates would rise, and rising interest rates could have an adverse effect on economic growth.
- Political Turmoil: Our nation seems to grow more and more divided every day. That political turmoil can lead to disruption in the nation. We’ve seen such disruption in the past, with movements like “Occupy this or that” or “Me Too” or some other mass response to perceived social injustices. That turmoil, from my perspective, seems much higher today than it seemed during earlier phases of my life. I consider it a threat to stability.
- Economic Cycles: The nation’s economy has been doing really well since I got out of prison. In many markets, housing prices have surpassed where they were prior to the recession. The stock market has been hitting all-time highs regularly. Although I cannot predict the future, it would seem that over the next seven years, the stock market will not enjoy the same level of growth that it has had over the past seven years. If the market doubled again, the Dow Jones Industrial Averages will be trading at more than 50,000 points by 2025.
When I discussed investment ideas with my sisters, I reminded them of the risks. Although it would be awesome if the market continued to rise at the same levels over the next seven years as it has over the past seven years, there would be a lot of pain if the markets corrected—as markets have done historically.
With volatile markets, we see valuations peak and fall like a roller coaster. I’ve heard a saying that the only time a person gets hurt on a roller coaster is if they jump off. And market enthusiasts advise that it’s best to hold on to stock-market positions when markets correct, because they eventually recover.
Those recoveries, however, can take many years.
Investing Outside of the US
We’re all in our mid 50s and we want to be in a position to enjoy our 60s, our 70s, and beyond. We do not to sow seeds today to remove possibilities for financial uncertainty in our future. I would not want to be waiting for stock market valuations to recover in my 60s. Instead, I want to make decisions now that will protect me from market volatility, and put me on a pathway to prosperity without ties to vulnerabilities in the US stock market.
Avoiding market volatility was a major reason that I chose to invest in Belize. And since they had done well in the stock market over the past several years, I suggested that they join me. I didn’t suggest that they liquidate all of their holdings. But they should consider liquidating a portion of their holdings and investing with me overseas.
Each sister joined me in making a six-figure investment outside of the United States.
I never ask anyone to do something that I’m not doing. I’m investing in Belize because I think it protects me against market volatility and because I think it will provide an awesome return on investment. I like the idea of getting assets outside of the United States, and I like the idea of using leverage to own assets that are appreciating in value. They appreciate in value because I’m not the only one investing:
- The developer is investing tens of millions to continue building on the project.
- Other buyers of home sites are investing hundreds of thousands of dollars to build their dream homes.
Cumulatively, more than $1 billion is pouring into the property development where I invested. That massive investment gives me a high level of comfort. I am confident that the investment will increase in value over time. And I’m confident that the investment protects me against downside in the U.S. economy.
Those are some of the reasons that I recommended that my sisters join my by investing in Belize.
I welcome a dialogue with you regarding potential investments outside of the US. If you’re interested in avoiding volatile changes in the stock market, and using leverage to acquire assets, connect with me today!