I have had the opportunity to speak in front of hundreds of groups over the past decade or more. Quite often the majority of these speaking engagements were designed to share information on Gold, Silver, and Natural Fancy Color Diamonds. This has indeed been the case for about 90 percent of our seminars. So when I originally had an opportunity, in the not-so-distant past, at the Seed Event in Vancouver (Advance to the 2:15 mark) to speak with a group of interested investors who also had a keen sense of interest in wellbeing, I took the opportunity to combine the two.
This speaking engagement coincided with a large event held in Vancouver, BC that showcased keynote speakers such as Deepak Chopra, one of the world’s foremost public speakers, a physician and a prominent alternative-medicine advocate and author, Adam McLeod one of the world’s most in-demand healers, David Wolfe, a longevity expert, and Gerald Celente, founder of The Trends Research Institute, and author of the national bestseller Trends 2000 and Trend Tracking and publisher of the internationally circulated Trends Journal newsletter, whom many of you will recognize and have listened to my interviews on occasion on the radio.
Before my speaking engagement, I spent an evening having a wonderful meal with Gerald discussing trends at large, the state of affairs in economic terms, and the reality faced by investors today. For those of you who are unaware, Gerald has been speaking about the importance of Gold and Silver ownership for decades now and has made it a part of his financial wellbeing plan, which has aided him in achieving his life goals.
Gerald has certainly practiced what he preaches when he has discussed why we should all think about not only our wellbeing and state of mind but also our financial wellbeing, for it might be the most important thing we do in attempting to achieve increasingly successful life outcomes.
For the past 16 years I have had the unique privilege of creating, writing and now contributing to and editing, for thousands of people, various precious metals newsletters and communique about our firm’s take on the Gold and Silver markets. We have worked with a wide range of people along the way, from directors of multi-billion dollar companies to those finding a silver coin for the first time. In doing so I have observed patterns that influence people’s experience of wellbeing in virtually every area of life: physical, emotional, psychological, spiritual, relational, and financial. Through it all, I have had a fascination with the area of financial wellbeing.
Financial wellbeing takes into consideration more than just the material areas of financial success. It also includes how your beliefs, behaviors, plans, fears, and dreams around money and wealth play out in your life-experience and outcomes.
To me, financial wellbeing isn’t just about how much money you make, how much money you save or invest, or what your balance sheet looks like. Financial wellbeing is something that must be assessed by looking at both your perception of wealth as well as your accrued wealth. In other words, how you perceive wealth, view wealth, your opinions about it as well as the material items you end up amassing and how you navigate both aspects of this wealth journey.
Growth of Wealth - “Material Side of Wealth”
In this aspect of your financial wellbeing, you can keep track of how much money you have coming in and going out, and you can see, touch, taste, smell, or feel the material items that you have acquired, sold, or given away.
In this part of your financial wellbeing, there are financial laws and principles that everyone is affected by, similar to the laws of gravity. They include principles like “To build wealth you must”:
Have a means of producing income (Typically through products, skills, or services that add value to others, and that people want and will pay for).
Spend less money than you make and save the difference (Super tip - a savings of 10% or more of your net income is a good start, but hard to accomplish. Make it a goal!).
Invest a portion of what you save. Balance, diversification, liquidity, a global focus are all key concepts you should discuss with those you trust to manage your money.
Continue to save and invest until the income produced by your investments matches or exceeds the income that you make through your products, skills, or services (and supports the lifestyle you want to live for as long as you live).
Contribute some portion of your income to help others. This is charity or philanthropy, and it helps to add stability to this aspect of your financial wellbeing. (Super tip - plan it out. Speak with your decision-makers, spouses, partners, family about where and what and how much to contribute instead of deciding these things on a whim as you will be firmly in control of saying yes or no to those sometimes pesky callers asking for your contributions every year.)
Mastery of this part of your finances is indefinable or indescribable to many because they either:
Don’t generate enough income to pay for their expenses plus save a percentage.
Generate enough income but spend all of it without saving or investing.
Spend more than they make and accrue debt that doesn’t help them generate more income. (Super tip - the people that I know and work with who are incredibly wealthy all have a very disciplined, almost “dreary”, approaches to wealth-building. They simply follow a strict set of rules they have established concerning the accumulation of wealth and they do not digress from them.)
Of course, there are varying degrees of learnedness when it comes to investing and accumulating wealth, and those who study more and do more due diligence learn how to moderate the risks and take advantage of the many opportunities that can compound their investments much faster. This is precisely how the rich get richer.
The Perception of Wealth - “Feelings and Perceptions to Wealth”
The perception of wealth, on the other hand, is the world of the immaterial; the world of “feelings and perceptions”. This is where your beliefs and your psychology around finances come into play.
In this aspect of financial wellbeing, your unique or personal experience is the key factor.
How do you “feel” about your current financial situation for example?
Are you satisfied? Are you mortified? Are you fearful? Are you enthusiastic? How much is “enough” money? Do you feel “pedestrian”? Are you inspired, frustrated, or indifferent about finances?
This includes principles such as:
You have a financial “thermostat” based on your beliefs about money, which controls the base and ceiling for how much you make and keep.
Money is a way to document the exchange of energy, and pieces of paper (In the past backed up by gold and silver, but now just pieces of paper.) or digital blips on a computer screen are how we keep track of the exchange of this energy.
How you feel about money, and how much money you make is largely a result of your acclimatizing and culture around your wealth, which is why your financial circumstances are typically very similar to your closest peer-group. (Super tip - It is widely accepted in the world of psychology that we tend to experience outcomes like that of our closest peer groups. In other words, we may think we are middle class because of our circumstances but psychology suggests that if we changed the group we socialized with and, as an example, and became part of a higher wealth peer group, we would most likely become far more wealthy-Meaning if you wish to be wealthier then you need to act, think and interact with wealthier peers)
The experience of “wealth” is not a result of finally having “enough”. The experience of abundance comes first, then the floodgates to “more than enough” really open.
What can you do to multiply or create flourishing financial wellbeing outcomes? Here are some ideas for merging the two aspects of finance in no particular order:
Study good material and scrutinize or examine your beliefs and opinions about wealth. Write down all your beliefs about wealth and money and ask to share them with someone who is financially well off. Their feedback will show you exactly where your limiting beliefs lie.
Compensate yourself first. Always take at least a percentage off the top and save it before you spend any of the money you make. This builds your sense of self-confidence and self-discipline, and you’ll be amazed at how quickly you can save. (On a side note, it was not so long ago that our parents and their parents were saving a minimum of 10% or more in Canada on a regular long-term basis.)
Elevate your financial IQ. Nobody is going to do it for you. You must learn about the world of finance by reading and attempting to grasp the knowledge by asking questions along the way of those you know around you and, perhaps more importantly, those you do not. Start reading the financial section of the paper daily. Watch the financial news and investigate; always read behind the headlines. Take some finance courses and always attempt to find out more about and master your investments. (Super-tip - I have done enough seminars to know that very few people have any idea where their money is really invested. Learn the language and you will begin to decipher the financial realm and feel more self-reliant.)
Get in the game. Once you start both saving and learning more, opportunities will open up. If you do not have any money saved, don’t expect investment opportunities to show up. With some savings and education, you get yourself in the game.
Talk to affluent people. Who do you know who is financially free, happy, and generous? If you do not know anybody, then start looking! A person who is truly wealthy wants to support others to lift themselves up, and when they have the time, they’ll happily give you a hand-up (not a hand-out). A financially well-off mentor could transform your life.
Take a look at your peer-group. Proximity truly is power. Who do you spend time with socially? Are they financially “well-off”? Love your friends and family, and at the same time branch out to ensure that you are spending more time with confident, appreciative, and generous people. Their wealth perceptions will rub off on you.
Start now. Don’t wait for “a lower price” that might never appear. Bernard Baruch, a famous American financier once said that “Knowledge plus action equals success, but knowledge without action equals failure.” (Super tip - Take risk where it is warranted based on your ability to “BALANCE” your wealth. I am not your financial planner or advisor, and these are only my opinions so if you believe this concept of financial wellbeing is warranted then apply it to what you already have. I love physical Gold as a way to balance my wealth. It gives me a non-paper asset, it has a really good track record (Averaging 10%-11% over the past 15 years) and it is liquid so it adds more power to my wealth.
What Lies Ahead For Gold and Silver In 2021
Surprise! It's January 2021 and the price of Gold and Silver are both up. Gold finished 2020 with a gain of about 24% in USD, while Silver fared even better with a gain of nearly 48% in USD. In my opinion, both remain in buying zones!
This being said, Gold and Silver will continue to encounter headwinds from many areas. Our old friends in the form of fictitious numbers that keep being issued from various departments of the US and other governments of the world, in areas such as money printing, inflation reports, housing statistics painted positively, and relatively weak “real” jobs data, will continue to be an issue.
One of the very people I trust in this world to accurately predict financial trends and share with us true information about the problems we face in finance, banking, and the economy is the very talented Danielle DiMartino Booth, who I have interviewed on more than one occasion. She had this to say about inflation and the accuracy of it being reported on Twitter this week.
“When I was inside the Fed, it was acknowledged internally that the core PCE was a broken metric that understated & misrepresented true inflation. The decision was made to continue using the broken gauge because Fed models would not work if true inflation was used. QE is a lie.”
So expect there to be continued headwinds and turmoil which have historically made gold and silver optimal choices for balancing your wealth, especially in 2021.
As for the world economy, trouble lies ahead. We should accept that things will get worse for a while here in 2021. Covid is winning and the vaccine rollout so far has been bungled in many ways. January and February will not be a happy time in the healthcare system, so keep your damn mask on.
The housing craziness of 2020 will certainly spill into the new year. Here at home in Canada expect sales and prices to be up as low mortgage rates hang out for a while longer, especially with the risk of our central bank and other CB’s dropping their benchmark rates a few more basis points. It’s also a debatable time to be loading up on a ton of new real estate debt with prices at historic highs and rates in the gully, but the hormones are flowing, this much I know and have witnessed myself. This spring will send detached values to fresh new highs in Ontario and push urban condos to multi-year lows. So, you can buy high or you can buy low.
As for the stock markets they are more than likely to continue running upwards. The appetite is a proven one and the amount of cheap money ($384 Billion and counting in Canada alone since March) and $20 trillion worldwide, in the same timeframe, will continue to be handed out at a rapid pace. However, mark my words it will be a difficult notion to support the lowest interest and mortgage rates in history much past Q4 2021 as inflation rears its ugly head and interest rates and mortgage rates in North America begin to rise, putting pressure on the housing, stock, and bond markets before the end of the year or perhaps into Q1 2022. Again, balance is and will be the key to maintaining long-term wealth. In my opinion, having some physical gold or silver will help this balance tremendously.
In 2021 expect the good old-fashioned donnybrook between deflation and inflation to end. That $20 trillion in government stimulus spending around the world plus cratered interest rates and central bank bond-buying did the trick. No depression. 2021 will probably kick off at least a half-decade of escalating corporate profits, above average GDP, and inflation. Lots of it. If you think your 1.5% five-year mortgage won’t renew at double the rate in 2025, you’re not paying attention. So get ready.
As for politics, the first week of the year brings the final gasp for Trump. Two run-off elections in Georgia this week will decide if Senate control stays red or goes blue. They are as harsh as the presidential contest was, as laden with untruths, threats, and scare tactics.
The polls show a race too tight to call, but in that state, this is already a fail for the Republicans. If the Democrats win in the same week Biden is officially recognized by Congress (that happens Tuesday) Trump’s hold on the party may fade. Meanwhile, his cantankerous refusal to concede and baseless claims of election fraud have raised $200 million in donations – sad little gifts from struggling common folk to a narcissistic billionaire for his personal use. What a stunning outcome. Also please note just because I may not like Trump that much it does not mean I do not support conservative politics: for me the two are now separate issues.
Here at home, you can bank on there being a federal election in 2021 as the Liberals take advantage of their spending benevolence and make that call. Odds are high for a Trudeau majority (given the polls), so the Freeland budget following that will be a bad dream for the ultra-wealthy. The capital gains inclusion rate may rise. Dividend income may be hit. And we may see a new uber tax bracket created. The tilt to the political left will continue, and high-income or wealthy people will enjoy zero public sympathies.
Seek advice. My own financial planner told me to “make sure you max your TFSA next week and your RRSP by March 1st.” over the break. She also said to “create a spousal plan, and maybe a spousal loan.” She also advised people I know to consider income-split pensions. She suggested that I “Set up a joint non-registered account” and “consider a tax-deductible HELOC investment loan.” She was alright with the addition of increased gold holdings and was happy that I continue to use silver as a means to attempt increasing my wealth in the part of my “value” portion of my portfolio where I use more of my disposable income. She too believes it is extremely undervalued but is certainly slightly more volatile than gold. In summary, she told me “this is war” and to “suit up”. When you hear that from those you trust (And yes even doctors have a doctor) it is all hands on deck.
Speaking of gold and silver, they remain very well supported in many regions of the world such as Asia and Europe, North American, and our last Q4 numbers for demand were through the roof at Delta Harbour. Buying has now intensified. I believe this will be the case for some time to come.
Investors wanting and expecting big price action in both gold and silver just have to be patient as this US current business cycle reaches its peak and expires. The likeliness of a spring fling with silver and gold is a lot higher than it was just 12 months ago and looking back at previous incarnations of peak moments in the bullish cycle, both gold and silver look extremely poised to recapture some of that previous momentum from 2004, 2006, 2008 and 2011. Bottom to top gains in both metals will likely exceed 50% in my opinion if we do get a spring fling moment in Q1/Q2.
I know some folks question my loyalty due to the notion that I project a growing stock market. So It is important to note that some of the conjecture in my estimations of a continuation of growing stock markets throughout the G20 comes from the fact that the world economic establishment is concerned about keeping up the facade of economic recovery, and will do what they need to maintain the allusion of a recovering economy. But for both gold and silver to significantly catch fire and hit multiples of price higher, as we anticipate it will, the business cycle in the US must reach a climax similar to what we saw at the tail end of the 1970s and the inflationary peak, which we believe is very close to happening.
Recall your history charts in gold and recognize that there was a similar “lull to sleep” effect during the period between 1976-1978, very similar to what we saw in gold and silver pricing between 2012 to 2018.
Back in the 70s, and like we just witnessed in the past decade, many investors became impatient, annoyed, or irritated and were lulled to sleep by the perceived inability of gold to capture new highs. In the 1970s it meant a staggering 50%-60% left the market altogether only to witness what was the largest modern-day gain in history, up to that point, in gold and silver. (Both gold and silver reached all-time historical highs in January of 1980 respectively taking gold to $850 Oz and silver to $52 Oz, some 2300% and 2500% higher than their lows of the same decade!)
The winds of inflation are beginning to blow, and they will become a hurricane in the not-too-distant future. Having said this you may know we feel inflation has already begun taking a bite out of our disposable income in the form of smaller packaging or “shrinkflation”, while gasoline prices and everyday items have all become more expensive to use. Part of this inflation will likely come from the central banks of the world beginning new and dangerous interest rate hikes over the next 60 months, with many analysts projecting there could be more to come, like DiMartino Booth above.
As that happens, banks are likely to become very aggressive with new loans, because the fractional reserve banking system makes the potential reward worth the risk. You will be encouraged to take on new debt at a rapid pace. (Super-tip – think of the average price of a new car, house, food, and so forth, and now compare that with your wage increases in the past 20 years. Are you getting the picture? You now have to do more to balance and grow your wealth strategically, making physical gold and silver good optional additions to your overall plan)
Odds are very high that money velocity begins to rise quite strongly in the coming next 2 years. The bottom line is that inflation is my personal biggest concern and that it could rise much faster than anticipated over the next 24 months as well as a return to the mentality of debt and spending that led to the crash of 2008 to begin with. That could essentially create an institutional and retail investor stampede into very undervalued gold and silver.
Even the most credulous investor does not want to get the impression that he or she is being looked upon or thought of as one of those fabled people who are "born every minute". This is the time to buy and take home or store physical gold and silver. Be it in your registered RSP or TFSA, through direct delivery, storage, or even through one of our other methods we are always glad to help. Caution, I am “Long” on gold and silver!
Welcome to 2021.
Yours to the penny,
Darren V. Long