Welcome to Freedom Fast Lane TV! Today we’re going to ask the question, are we in an economic bubble?
Hey, the market is way up. We’re at record highs. Everything looks great.
We’re flush with cash. It’s easy to get capital. We’re in a big economic boom.
But are we in a bubble?
This is a question that has come up a lot both in the media and also in conversations that I’ve had with my entrepreneurial and investor friends. So are we at the top of the market? Are we about to have a new great boom?
What’s going on in the economy? Look, everybody has an opinion on this, no one really knows.
So, everyone that you hear talking about it usually has an agenda. They have a book to sell. They have an investment firm where they are taking your money and investing it according to their philosophy.
Most people talking about this have an incentive to tell you that it’s going way up or it’s going way down.
My opinion is that it doesn’t really matter if we’re in a bubble or not. The question is not if we are in a bubble. The question is, where is the greatest opportunity right now? And there is always opportunity.
So, a traditional investment strategy for me is looking at dividend-paying stock. It’s looking at buying single family housing. It’s looking at small apartment complexes.
Right now, I’m not doing any of that. I’m not doing any of that because we’re totally in a market where cash flows are less than the value of the asset.
So, I’m not buying a lot of stocks right now because the dividends that I would get on those stocks are this big. I’m not putting any more money into the stock market because we’re at all-time highs.
Meanwhile, it’s super easy to get capital right now and there’s all kinds of opportunities in business because consumer confidence is high so people are buying. So the greatest opportunity is in doubling down on your business.
Or it might be in whatever area of interest you’re in. There are opportunities that are coming up since you’re not putting the money in the stock market or in real estate. You have more capital to put into the places that you can impact.
So the question isn’t are we at a bubble or not. The question is, where’s the greatest opportunity?
That’s going to vary from person to person. I’m not buying stocks or real estate until or unless we are in a bubble and it pops. Then the greatest opportunity is going to be buying Apple at a discount, or buying Visa at a discount, or buying up apartment buildings in Austin, Texas. If that bubble pops.
But, if it is over-bought, if they’re at all-time highs, as a traditional investor, as somebody who is not a full-time real estate investor, do you think that I can compete with the people who are full-time, taking advantage of buying and flipping, and speculating, and taking advantage of a hot real estate market? No!
I can’t get into that market at values that are as high as right now. But I can absolutely kick the pants off of people who are in my business or speculating in my business when it’s in my full-time thing.
So, the question, again, is not what’s going to happen and how do you shield against it. It’s what’s the greatest opportunity for you right now and doubling down on that.
Of course, in order to be investing at all, you should have a business, and a really profitable business.
If you’re not there yet, then the number-one investment that you need to be making is in yourself and in your business and in investing the profits of that into other areas of passive cash flow.
MORE AWESOME EPISODES OF FREEDOM FAST LANE TV ON CAPITALISM.COM:
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• Why Don’t You Like Capitalism? You Told Us, We Listened. Here’s Our Response. | #FFLTV Ep 14