Editor’s Note: You’ll find a very important theme in the Daily Dispatch this week. We’re going to discuss how to build your own personal “financial empire.”
Each day this week, in place of our regular daily market commentary, you’ll receive an essay with advice on how to build lasting wealth. Over time, learning and following these keys to wealth creation can turn you into a multimillionaire.
This essay is part of the “field guide” we send to every new reader of our flagship research service, The Casey Report.
The Casey Report will provide you with the knowledge and skills you need to build a lifetime of crisis-proof, inflation-proof wealth.
In today’s world, a field guide for navigating the financial markets has never been more important.
World governments are engaged in a gigantic experiment with our money. They’ve taken on debts and obligations they can’t possibly hope to repay.
When their creditors come knocking, the governments will react desperately. Their actions will cause financial busts, financial booms, inflation, social unrest, and, in some cases, war.
We don’t know what the next month will hold. We don’t know what the next year will hold. However, we do know that in a world where governments constantly meddle with business and money, there will be extraordinary booms and busts.
For most people, these booms and busts will be a source of confusion and financial loss. Most people will never know what causes them…or how to react to them. So, they’ll get tossed around like a ship on rough seas.
The Casey Report is the antidote to feeling powerless in today’s world. It will show you how to survive any crisis that lies ahead. Even better, it will show you how to build a fortune during volatile times.
The Casey Report is your field guide for building a personal financial empire…no matter what kind of economic conditions we see.
Following the principles laid down by The New York Times best-selling author and multimillionaire speculator Doug Casey, The Casey Report will provide you with a robust mental framework that will help you build a lifetime of lasting wealth. It will put a highly skilled, highly connected team of investors to work for you, every day.
We follow a unique set of principles in The Casey Report. They don’t teach these principles in high school or college, but throughout the centuries, people have used them to build empires of wealth.
These principles are like pillars that support a building. Each pillar is in a different spot, but they all work together to keep the building strong.
Here are the pillars of your personal empire of wealth.
PILLAR #1: The development of one or more large active income streams
“Active” income is the income you earn from actively working in a business, whether as an owner or an employee.
If you didn’t inherit millions of dollars and you’re starting from scratch, developing one or more large active income streams is crucial to building lasting wealth.
Being a business owner is better than being an employee. You get more control and more upside. But if entrepreneurship isn’t your thing, don’t worry. Highly paid employees can develop very large income streams. There are thousands and thousands of rich salesmen, athletes, executives, doctors, and lawyers out there.
As for age, it’s only a number. No matter what your age, it’s never too late to start earning and saving money.
Multiple income streams are better than just one income stream. Multiple streams of income provide more stability and greater upside than a single income stream.
And keep in mind, if your goal is to build lasting wealth, making a lot of money isn’t enough. You have to save that money. If you make a million dollars a year and blow a million dollars a year, you won’t build lasting wealth. You’ll be a high-earning broke person.
In order to build lasting wealth, you must save a substantial portion of your income…and use it to acquire assets. This brings us to…
PILLAR #2: The accumulation of ownership stakes in enduring, high-quality businesses that can be held for long periods of time
For centuries, the key to great wealth has been the ownership of enduring, high-quality businesses like Standard Oil, U.S. Steel, McDonald’s, Disney, Starbucks, Nestlé, and Coca-Cola.
It will be that way for many more centuries to come.
Enduring, high-quality businesses built the fortunes of Rockefeller, Rothschild, Steve Jobs, and Bill Gates.
Building a highly successful business from scratch is the surest way to a huge fortune. That’s how Bill Gates came to be worth more than $50 billion. He founded the world’s most successful software company.
But buying ownership stakes in existing private or public businesses can also be extremely lucrative. For example, consider the story of someone who bought an ownership stake in Johnson & Johnson in 1990.
At the time, J&J was an established blue-chip leader in consumer products and pharmaceuticals. It was one of the best businesses in America. In April 1990, someone who bought an ownership stake in J&J began earning the company’s annual dividend payment of $0.15 per share. This translated into a 2% yield on the investor’s capital.
Over the next 25 years, J&J grew from $11 billion in sales to $74 billion in sales. It also increased its dividend payment every single year. The dividend increased through recessions, bear markets, and terrorist attacks.
By 2015, the person who bought an ownership stake in J&J in 1990 had watched the value of his stake grow by 1,321%. He was earning an annual yield of 42% on his original investment. And he made all this money by owning one of the world’s best businesses.
If you’re worried about governments devaluing currencies, make sure you own stakes in world-class businesses. They maintain their value through inflation and deflation. World-class businesses can be publically traded or they can be private. They are a critical component of your plan to build lasting wealth.
Editor’s Note: In tomorrow’s edition, find out how the accumulation of world-class deposits of oil, gold, and other key resources can help make you rich.
Casey Research’s flagship service The Casey Report is dedicated to helping subscribers build a lifetime of crisis-proof wealth. Led by multimillionaire speculator and New York Times best-selling author Doug Casey, The Casey Report is one of the world’s most respected investment advisories. Right now, you can take a risk-free trial to find out if The Casey Report is for you. Click here to get started.