Declaration of Financial Independence
Content
Declaration Of Financial Independence Many Americans today are hoping the US Government has the financial strength to live up to the promises it has made to them. It is well documented that our Government is drowning in debt and is overspending its income by the trillions. Because of this massive Government debt, the US Dollar is structurally a weak currency, with a poor long term future...in our opinion. So what are the options for concerned people with investments? We need to take personal responsibility to control what is in our power to control. At Smith Investment Management (SIM), we believe that diligent care of our wealth requires action in three areas today. The pyramid below shows the three areas that require attention. By addressing these issues, we believe you are de-linking much of your financial future from our government’s fate, and are making your personal “Declaration Of Financial Independence”. Go to page two for explanations of A., B., and C.
B.
Assets
* Own investments that are backed by real assets or collateral, not backed by fiat US Dollars.
C.
Debt
* Make all debt long term with a fixed rate. * Use non-recourse debt. * Underspend your income.
A.
Get “Clear Title” to IRAs, 401Ks, and Regular Investments
* Remove the risk of losing ownership of your investments if a US Dollar crises causes systemic failure, or your brokerage firm goes bankrupt.
Smith Investment Management, All Rights Reserved. You can find us on the web at www.SmithInvestmentManagement.com, or email us at [email protected]. You may reach us by phone at 706-489-9192.
Declaration Of Financial Independence (page 2)
A. Get “Clear Title” to IRAs, 401Ks, and Regular Investments
When we say get “Clear Title”, we mean structure your accounts in a way to remove the risk of losing ownership of your investments if a US Dollar crises causes systemic failure, and/or your brokerage firm goes bankrupt. Why is this important now? Two reasons. 1. “SIPC” (Security Investors Protection Corporation, a Non-Profit Company with 32 employees), is charged to be a safety valve for investors if their brokerage firm goes bankrupt. After reviewing SIPC’s 2009 Annual Report, we believe SIPC has the money to make good on their maximum promised coverage of $500,000 to approximately 4,615 investors. That may sound okay...until you realize that there are over 40 million investors in our country with SIPC. If SIPC faces a small brokerage bankruptcy, they may be able to handle it. If they see a large failure...SIPC will likely look like a spiders web trying to catch a falling elephant. Because of this...we believe SIPC is a false safety valve for investors. 2. Brokerage accounts held in “Street Name” or “Firm Name” (likely 99% of all brokerage accounts) can be used to settle the debts of a brokerage firm if they fail. The statement you get from your brokerage firm has your name on it. But your investments are likely registered in the name (“Street Name or “Firm Name”) of your brokerage firm. If they go bankrupt, their creditors can have access to your assets, and you may be left hoping that SIPC can make you whole. So how can you protect yourself? * Re-structure your IRAs in an IRA LLC or Solo 401k, and keep custody of your investments away from brokerage firms. * Hold your taxable assets on a Bank Trust Platform, or for smaller amounts, in certificate form.
B. Assets In your IRA LLC, Solo 401k, or Regular Accounts, consider owning at least some investments that are backed by real assets or collateral.
Real Assets or Collateral Backed Investments Gold & Silver (you can take physical delivery) First Trust Deed (backed by real property) Stocks with meaningful intrinsic value Real Estate We believe that the US Dollar, US Treasury Bills, Notes and Bonds in the long run should be avoided. The US Dollar is a fiat currency, meaning that our government has declared it to be legal tender, and not convertible into Gold or Silver. Our currency has been fiat for almost 40 years...so why is it a big deal now? Because US Government debt in the past was a small fraction of what it is today.
C. Debt
* Today’s adjustable rates may seem quite attractive, but we believe the prudent policy is to control the things you can control. Endeavor to make all debt long term, and at a fixed rate. * It may take a bit of extra leg work, but seek to make all debt non-recourse. Non-recourse means that the lender has no further recourse in being made whole other than the item lent on. * Focus on “underspending your income”. With discretionary dollars, ask yourself...at this moment do I have better opportunities to grow recurring income or shrink recurring expenses. Deploy discretionary dollars wisely.
This is general information, and is not specific advice for your situation. Call me at 706-489-9192, or email me at [email protected] for specific advice.
Smith Investment Management, All Rights Reserved. You can find us on the web at www.SmithInvestmentManagement.com, or email us at [email protected]. You may reach us by phone at 706-489-9192.
B.
Assets
* Own investments that are backed by real assets or collateral, not backed by fiat US Dollars.
C.
Debt
* Make all debt long term with a fixed rate. * Use non-recourse debt. * Underspend your income.
A.
Get “Clear Title” to IRAs, 401Ks, and Regular Investments
* Remove the risk of losing ownership of your investments if a US Dollar crises causes systemic failure, or your brokerage firm goes bankrupt.
Smith Investment Management, All Rights Reserved. You can find us on the web at www.SmithInvestmentManagement.com, or email us at [email protected]. You may reach us by phone at 706-489-9192.
Declaration Of Financial Independence (page 2)
A. Get “Clear Title” to IRAs, 401Ks, and Regular Investments
When we say get “Clear Title”, we mean structure your accounts in a way to remove the risk of losing ownership of your investments if a US Dollar crises causes systemic failure, and/or your brokerage firm goes bankrupt. Why is this important now? Two reasons. 1. “SIPC” (Security Investors Protection Corporation, a Non-Profit Company with 32 employees), is charged to be a safety valve for investors if their brokerage firm goes bankrupt. After reviewing SIPC’s 2009 Annual Report, we believe SIPC has the money to make good on their maximum promised coverage of $500,000 to approximately 4,615 investors. That may sound okay...until you realize that there are over 40 million investors in our country with SIPC. If SIPC faces a small brokerage bankruptcy, they may be able to handle it. If they see a large failure...SIPC will likely look like a spiders web trying to catch a falling elephant. Because of this...we believe SIPC is a false safety valve for investors. 2. Brokerage accounts held in “Street Name” or “Firm Name” (likely 99% of all brokerage accounts) can be used to settle the debts of a brokerage firm if they fail. The statement you get from your brokerage firm has your name on it. But your investments are likely registered in the name (“Street Name or “Firm Name”) of your brokerage firm. If they go bankrupt, their creditors can have access to your assets, and you may be left hoping that SIPC can make you whole. So how can you protect yourself? * Re-structure your IRAs in an IRA LLC or Solo 401k, and keep custody of your investments away from brokerage firms. * Hold your taxable assets on a Bank Trust Platform, or for smaller amounts, in certificate form.
B. Assets In your IRA LLC, Solo 401k, or Regular Accounts, consider owning at least some investments that are backed by real assets or collateral.
Real Assets or Collateral Backed Investments Gold & Silver (you can take physical delivery) First Trust Deed (backed by real property) Stocks with meaningful intrinsic value Real Estate We believe that the US Dollar, US Treasury Bills, Notes and Bonds in the long run should be avoided. The US Dollar is a fiat currency, meaning that our government has declared it to be legal tender, and not convertible into Gold or Silver. Our currency has been fiat for almost 40 years...so why is it a big deal now? Because US Government debt in the past was a small fraction of what it is today.
C. Debt
* Today’s adjustable rates may seem quite attractive, but we believe the prudent policy is to control the things you can control. Endeavor to make all debt long term, and at a fixed rate. * It may take a bit of extra leg work, but seek to make all debt non-recourse. Non-recourse means that the lender has no further recourse in being made whole other than the item lent on. * Focus on “underspending your income”. With discretionary dollars, ask yourself...at this moment do I have better opportunities to grow recurring income or shrink recurring expenses. Deploy discretionary dollars wisely.
This is general information, and is not specific advice for your situation. Call me at 706-489-9192, or email me at [email protected] for specific advice.
Smith Investment Management, All Rights Reserved. You can find us on the web at www.SmithInvestmentManagement.com, or email us at [email protected]. You may reach us by phone at 706-489-9192.
