Warren Buffett's Explanation of Money Post Covid...

I've never claimed to be a great financial person, however, I do make it a point to stay educated when it comes to watching how the world's greatest investors and money makers address and tackle the economic conditions.

As a Sales Pro, I feel it's extremely important to watch big economic trends because it provides valuable data to use when it comes time to pricing offers in the marketplace.

Recently I had the good fortune in coming across an Aussie blogger named Tim Denning who wrote an incredible article on this topic. (He's got +100million followers for his blog - www.TimDenning.com)

As I must pay credit where it's do, a good part of this information comes from that article.

With that said, let's get into it...

As you know, Warren Buffet is considered by many as the most successful investor in history, so I think we can agree that watching what he does with his money is an intelligent thing to do if we are trying to get ahead financially with investing.

And if you're like me, we should observe everything he says, even if you don't love hearing it.

Recently, there were two lines from Warren that made me think:

“The [US] debt isn’t going to be repaid; it’s going to be refunded.”

“You better own something other than debt.”

As Tim mentioned in his article, "Buffett explains that when the government can just keep on printing money to pay their own debt it’s laughable to think they will ever default. He says, “The trick [for countries] is to keep borrowing in your own currency.”

So if money will keep being printed out of thin air then what does that mean for your investments, assets and savings? Let’s explore the topic in simplistic terms and see what you can do about it.

The Most Important Lesson On How Money Works From Warren Buffett

This is what Warren said recently about how money works that will test everything you thought you knew about money:

If the world turns into a world where you [governments] can issue more and more money and have negative interest rates over time — I’d have to see it to believe it, but I’ve seen a little bit of it. I’ve been surprised. I’ve been wrong so far.

If you can have negative interest rates and pour out money, and incur more and more debt relative to productive capacity, you’d think the world would have discovered it in the first couple of thousand years rather than just coming on it now. We will see.

It’s probably the most interesting question I’ve ever seen in economics.

Can you keep doing what we’re doing now? The world has been able to do it for now a dozen years or so [since 2008]. We may be facing a period where we’re testing that hypothesis that you can continue it with a lot more force than we’ve tested it before.

Warren's description about the "free money" we've gotten access to because of a health crisis may explain why he sold a lot of his US Bank stocks recently.

Where'd he put it?

According to blog Zero Hedge, "Warren appears to now be quietly betting against the United States."

He's abandoned the backbone of America's credit-driven economy and seems to be favoring the gold mines.

Again, a case of, "Watch what billionaires do, not what they say", right?

Warren's actions are going against the record prices in the stock market at the moment, I think it's worth keeping an eye on that.

Inflation Is Taking Hold

As Tim so eloquently puts it...

"Inflation is when prices go up and the value of your money decreases. Four dollars last year may have got you a small cup of coffee. That same cup of coffee might cost you $5 this year, as a simple example."

It's kinda like a hidden tax on your money.

Warren recently stated he's been wrong on his guess about a downward trend due to the developments the US economy has made without adjustment to inflation.

Warren has put his firm’s money in gold, and treasury bills which he describes as “a terrible investment over time.” (A treasury bill is an investment where you are essentially lending money to the government.)

So Warren is comfortable putting his money in terrible investments in the short-term because of what he can see in the world of finance. That decision is worth contemplating when thinking about your own money and investments.

Why This Matters to You...

1. Negative Interest Rates...

Negative interest rates can be bad for you because it means you have to pay to store your money. It also means the bank you choose to bank with may face severe financial trouble that leads them to go out of business.

Yes, banks have insurance in case of such an event, but if the problem is too big then that deposit insurance is useless — many people do not understand this. They assume the government or a magic insurance policy will save them without any negative consequences.

We’re in uncharted territory and I would not be relying on anybody to come and save you and your money.

2. The "Anti-Robinhood Effect"...

The rich investment firms are using technology to make better educated investment decisions and not sharing the information, so investors (like you and me) get the short end of the stick.

In fact, there's an app called "Robinhood" that many retail investors use to buy stocks which provides concrete proof that this is the trend.  

Here's the part Tim shared that no one will tell you...

"While billionaires like Warren are exiting stocks and running to safety, everyday people seem to believe they are smarter than the pros — or the high-frequency, non-human trading bots who predict the moves of the retail investor and bet against them.

Investments firms use high-frequency trading to automate their investment decisions and beat the average investor. These same firms are front-running retail Robinhood investors. What does this mean in simple terms?

Sophisticated investment firms get better data, and can outsmart the average investor.

This data allows investment firms to rob the poor and pay the rich — the name of the Robinhood app is kind of ironic, isn’t it?"

3. The 'Bubble' is Real...

Look at the data.

• Record unemployment.
• A global health crisis.
• Protests.

So how on earth is the stock market beating record highs?

Am I crazy?

Or is this a disaster waiting to happen?

Even George Soros (another iconic billionare) says, "Investors are in a bubble fueled by Fed liquidity and this is why I'm no longer participating in this game".

So am I crazy? Or is it gonna be a disaster?

I don't have the answer, but I'm excited as hell to watch what unfolds over the next 12-18 months.

There is more business opportunity now than EVER before.

4. Velocity of Money

Simply put, "Velocity" means how many times one dollar passes through multiple people's hands.

Currently velocity is down. Free money is being given away. It's being printed out of thin air and processed into your bank account through stimulus packages.

When this happens and the money is spent, it can lead to larger than normal amounts of inflation that drastically devalue the money you've worked so hard to earn.

Takeaways...

So how is this practical to the sales professional or business owner?

I'm not fully sure how it applies in your world specifically, but here's where I stand...

1. Because of what's happened recently, the way money works, and how it's functioning in our society, we watch the billionaires and strongly consider what they do with their money, NOT what they say. As I mentioned, I'm far from an investment professional and you shouldn't consider anything in this post to be financial advice, I'd say that it'd be wise to discuss this intel with your financial pro. We did, and acted accordingly.
2. Continued education can protect you and everything you’ve worked for. Now is not a time to panic. Now is a time to learn and prosper from what is transpiring in the global economy. Watching trends, and following the money has always led me in the right direction. Take time to further educate yourself as a part of your daily self-love. It sucks losing things you've worked so hard for because of things out of your control.
3. Strongly consider raising prices for your products, services, and market offers. There is more money available now than there has ever been before, and we're still in a place where inflation (or hyper-inflation) hasn't sunk it's evil teeth into our U.S. economy. Flood the bank account.
4. Continually talk to your market. The fastest way to this is to install an automatic prospecting system that consistently floods your sales calendar daily with perfectly qualified opportunity. If you don't have a system like this in your business, apply to join our Sales Ascenders Inner Circle family by clicking here.

Remember, you're in control.

Love what you do...

Be the person you wanna be...

Do the things that person would do, so you can...

Have the lifestyle that you deserve.

Go. ??. Fight. ??. Win. ??.

-sean ??

Ps... In NO way should you consider anything in this post as financial investing advice. It's information I gathered from people and places I have personally vetted and trust to be fairly reliable. So take it for what it is... info passed to you from me. Knowledge is not power, Applied knowledge is. Just make sure to make your own decision from the research you do. Happy selling! :)