Editor’s Note: It’s “build your own financial empire” week here at Casey Research.
Each day this week, in place of our regular daily market commentary, you’ll receive an essay with proven strategies on how to build a lifetime of crisis-proof, inflation-proof wealth. Click here if you missed yesterday’s edition.
Today’s essay is part of the “field guide” we send to every new reader of our flagship research service, The Casey Report.
PILLAR #5 of your personal empire of wealth: The accumulation of wealth insurance vehicles and assets
An empire that can be brought down by a recession or a stock market crash is not an empire.
In order to build lasting wealth, you must be crisis-proof…inflation-proof…and lawyer-proof.
That’s why a true empire of wealth includes insurance policies, physical gold, physical silver, liquid cash, personal protection, and various ways to “lawyer-proof” your life.
The long-term trend of mankind goes in the direction of increased prosperity and progress. But from time to time, this trend is rocked by war, depression, disease, and revolution.
Even as America became the global superpower from 1900 to 2000, it experienced war, depression, currency crisis, and stock market crashes.
Because recessions and bear markets are inevitable, any plan to build lasting wealth must include assets that allow you to survive and thrive during crisis.
For example, the decade from 1970 to 1980 was marked by war, recession, and inflation. This made the 1970s a terrible decade for stocks and bonds. But it was terrific for gold owners. As people fled stocks for precious metals, gold gained more than 2,000% during the decade, making some people rich.
This single example shows how tough times like the 1970s aren’t just to be survived…they can present enormous investment opportunities.
PILLAR #6: Early-Stage Investments, Venture Capital, and Speculations
These are giant, industry-dominating firms today. They generate billions of dollars in profits. They influence federal laws and the media.
But they all started out as small companies with big ideas.
As they grew into worldwide brands, early investors made fortunes. Returns of 100-to-1 or even 1,000-to-1 are achievable with early-stage investments.
The huge returns generated by small businesses that grow large are why any empire builder should consider dedicating a portion of his portfolio to early-stage investments and other speculations. Just $5,000 or $10,000 invested in the right small company can grow into hundreds of thousands (even millions) of dollars over the course of a decade.
With their large upside potential, early-stage investments also come with large risks. Early-stage firms have to fight bigger competitors. They often have unproven business models. That’s why we believe this portion of your wealth-building strategy should be relatively small compared to your business, real estate, and gold holdings. It’s also why a sensible portfolio of early-stage businesses holds five to 10 of these long shots.
By diversifying your portfolio of speculative investments around five to 10 positions, you can suffer losses on the majority of the positions and still make huge returns. A 10-to-1 or 100-to-1 winner will more than make up for the ones that don’t work out.
Summing Up the Six Pillars
After having the staff at The Casey Report as your friends and field guides for years, your empire of wealth will take on a certain look…
***You’ll have used your active income streams to accumulate a diversified group of assets;
***You’ll have used stock market declines and crashes to buy world-class companies at bargain prices. Because of the enduring, high quality nature of their business models, these firms will pay you cash dividends every year, no matter what is happening with the economy;
***Your real estate holdings will produce cash flow that is independent of the stock market’s ups and downs. You’ll sleep well at night knowing there is permanent demand for your properties;
***You’ll own pieces of world-class oil fields, copper mines, timber properties, and other vital natural resources. The value of these irreplaceable assets will soar during inflationary times;
***You’ll have a large stash of gold and silver that will act as insurance against a monetary crisis;
***You’ll own some early-stage businesses with 100-to-1 potential. Following these interesting, exciting firms will help keep you young.
Editor’s Note: In tomorrow’s edition, you’ll learn four unique principles we use to make big gains in the markets without taking on major risk.
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.