My mail to the kids in family (WL/LL/Tian/Le) dated 6 June 2013:
Read below and try to understand what this man is saying about the future.
Although he is talking about the US (because he is American), the other 'first world' countries are no different.
A lot of young people thinks that going to university (known as 'colleges' in the US) will guarantee them a good paying job. So they borrow money from banks etc to pay for their courses.
Because they think that once they enter a uni, the uni will guarantee them a 'cert' which will guarantee them a good paying job, most of them just have a good time and are not serious about acquiring knowledge (one can go to school and yet learn nothing!).
When they come out many either cannot find jobs or get jobs with salaries they expect. So they end up jobless or feeling poor (because the big student loan repayments take away a big chunk of their salaries).
In the US and Europe, 40-60% of youths (people aged below 25) are now jobless! Around the world 17-20% of youths are jobless. (5-10 years later when more and more people like you join the job market looking for jobs, it will be worse).
Because they cannot think properly, ignorant, and do not understand what is happening in the world (no big picture), they blame their governments for not doing 'a good job' of making sure every uni graduate gets good paying jobs. (People always blame others for their problems).
The typical uni graduates in Singapore, for example, expects pay of S$2,500/month and do not know that a uni graduate in China is willing to work for $1,000/month (therefore employers and jobs would go to China!).
A typical garment factory worker in poor countries like Bangladesh works for US$50 to $60/month!
Go around your city and you will see that many youths are working as salesgirls, hairdressers, beauticians etc. Those jobs will never pay much.
Although he is talking about the US (because he is American), the other 'first world' countries are no different.
A lot of young people thinks that going to university (known as 'colleges' in the US) will guarantee them a good paying job. So they borrow money from banks etc to pay for their courses.
Because they think that once they enter a uni, the uni will guarantee them a 'cert' which will guarantee them a good paying job, most of them just have a good time and are not serious about acquiring knowledge (one can go to school and yet learn nothing!).
When they come out many either cannot find jobs or get jobs with salaries they expect. So they end up jobless or feeling poor (because the big student loan repayments take away a big chunk of their salaries).
In the US and Europe, 40-60% of youths (people aged below 25) are now jobless! Around the world 17-20% of youths are jobless. (5-10 years later when more and more people like you join the job market looking for jobs, it will be worse).
Because they cannot think properly, ignorant, and do not understand what is happening in the world (no big picture), they blame their governments for not doing 'a good job' of making sure every uni graduate gets good paying jobs. (People always blame others for their problems).
The typical uni graduates in Singapore, for example, expects pay of S$2,500/month and do not know that a uni graduate in China is willing to work for $1,000/month (therefore employers and jobs would go to China!).
A typical garment factory worker in poor countries like Bangladesh works for US$50 to $60/month!
Go around your city and you will see that many youths are working as salesgirls, hairdressers, beauticians etc. Those jobs will never pay much.
In addition, there are already 7 billion people in the world and it is still growing (because science and modern medicine will 'save' more and more from death from diseases etc).
With technology progress, manufacturers and companies will require fewer and fewer people to do the same amount of work (because they can use machines and computers instead)!
As more and more people compete for jobs, salaries will go lower because people will accept lower pay to out bid other job seekers.
On the other hand, the resources available will become costlier because of 2 reasons.
More people will be fighting for the same amount of resources, and the easy to get resources (like oil, iron etc) have already been mined and used by past generations. What resources are left for future generations will be harder and harder (i.e more costlier) to extract.
The combination of costlier resources and lower pay will combine to make life very difficult for people at the bottom 80%.
Remember, the 80/20 Rule.
The top 20% of the people control/own 80% of the wealth. The bottom 80% of people have to fight for the remaining 20% of wealth.
If you live like the bottom 80%, your life will be very different from the top 20%...
Additional Note:
Because university costs are so high nowadays, many smart young people decided not to go to uni and use the money to invest instead.
As example, going overseas for uni can cost more than $300,000 (including fees, food, housing etc.).
After that, if the person repays $1,500/month (because salary is only $2,500), it will take 20-30 years to finish repaying the loan and have only $1,000 left for own use.
On the other hand, if the person invest that $300,000, he/she may be able to get an income of $30,000 per year (if person is a smart investor, can get 10% return or more per year). In that case, the person does not even have to work but still get $12,000 to use every year (the other $18,000 for loan repayment).
Better if they use family's money.
If they spend the family's $300,000 on uni education, they are giving the money away to their 'professors' and have to work for 20 years (assuming they save $1,500/month) just to get back the $300,000 they started with!
On the other hand, if they invest that $300,000 they will keep that $300,000 and get $30,000 (returns) every year without having to work! In the meantime they can take on jobs they really like or enjoy but may be less pay (but who cares about your job's pay if you have additional income from elswhere?).
So make sure you think properly and talk to smart people before making big decisions that involve spending a lot of money. Be the 20%...
As example, going overseas for uni can cost more than $300,000 (including fees, food, housing etc.).
After that, if the person repays $1,500/month (because salary is only $2,500), it will take 20-30 years to finish repaying the loan and have only $1,000 left for own use.
On the other hand, if the person invest that $300,000, he/she may be able to get an income of $30,000 per year (if person is a smart investor, can get 10% return or more per year). In that case, the person does not even have to work but still get $12,000 to use every year (the other $18,000 for loan repayment).
Better if they use family's money.
If they spend the family's $300,000 on uni education, they are giving the money away to their 'professors' and have to work for 20 years (assuming they save $1,500/month) just to get back the $300,000 they started with!
On the other hand, if they invest that $300,000 they will keep that $300,000 and get $30,000 (returns) every year without having to work! In the meantime they can take on jobs they really like or enjoy but may be less pay (but who cares about your job's pay if you have additional income from elswhere?).
So make sure you think properly and talk to smart people before making big decisions that involve spending a lot of money. Be the 20%...
----- Forwarded Message -----
From: Casey Research subscribers@caseyresearch.com
Sent: Thursday, June 6, 2013 1:18 AM
Subject: Casey Daily Dispatch - Nine Things You Need to Know to Survive the New Economy
Our guest contributor this week is a fascinating man. He once founded a web design company and sold it for $10 million, only to squander every penny. Starting over from zero, he founded another company – Stockpickr – and sold it, too, for $10 million.
He has been a hedge fund manager, a financial columnist, and has written eleven books. Today, he's director of Formula Capital, where he manages a portfolio of twenty angel investments, and is on the board of several companies. Oh, and he's also a chess master and a prolific blogger.
Personally, I've been a fan of James Altucher's writing for years. In my opinion, the most impressive part of his story is that he became successful by bucking convention. James didn't languish in a cubicle waiting to be promoted or try to claw his way up the corporate ladder. Instead, he generated ideas and created businesses out of them – a Doug Caseyesque approach to life.
James weaves this important message through his various books and blog posts: break the chains of convention that are restricting your life and career.
While society tells us that we're supposed to borrow money to go to school and buy a house, student and mortgage debt beholden you to a biweekly paycheck to remain afloat financially. When you're paying $2,500 per month combined on your mortgage and loans, you can't take some time off to explore a passion or build a business. You have to keep running on the hamster wheel.
It's better, James argues, for many people not to go to college at all. Instead, take the money and time you would have spent and build a business. Ditto for buying a house, which, beyond skewing the average person's portfolio far too heavily into real estate, also anchors you to a specific geographic location, limiting your job opportunities to that area. Not to mention the vampiric effects a 30-year mortgage has on your finances.
These burdens and others prevent most people from reaching one of the most rewarding positions in life: working for yourself, where your earning power can be a direct result of your ideas, drive, and effort, rather than your boss' estimation of how much your time is worth.
Having followed and enjoyed James' writing for years, I contacted him to ask if he'd be interested in writing an exclusive piece on the US economy for our audience. Happily, James replied that he's a huge fan of Casey Research, that he'd love to contribute, and that the timing is perfect for him, as his eleventh book was just released on Monday.
So here we are. You'll notice the piece has a different flavor than the typical articles that appear in this space, with more of a contemplative rather than analytical perspective. Since the mind doing the contemplating has created so much value, I consider that a good thing. James' perspective is both valuable and unique, and I hope you'll enjoy it.
Read on for his fascinating take on some of the stark realities that exist for the average worker in today's and tomorrow's economy. And if you're so inclined, check out his book, which he discusses at the end.
See you next week!
Dan Steinhart
Managing Editor, The Casey Report
Managing Editor, The Casey Report
Nine Things You NEED to Know to Survive the New Economy
By James Altucher, Managing Director of Formula Capital
I almost had $8 million stolen from me yesterday, so I'm in a bad mood. Someone wanted to borrow $8 million and use $18 million worth of stock certificates as collateral. I found a way to lend him the $8 million. The borrower had legal opinions from the companies involved (all big companies). He had bankers verifying his accounts. He had lawyers with bylaws, trilaws, whatever laws, to his corporations. He had access to material he would only have if he was intimately involved with the companies involved. He had lots of things to prove he was who he said he was.
Using our own detectives, we found out at the last minute that he'd forged everything. And his whole operation (lawyers, brokers, etc.) disappeared as soon as we uncovered the fraud.
When we found out, we all started laughing. Sometimes you can't help but laugh at the entertainment the world throws in your face. Thank god we didn't wire the money!
I wish I could say this story is just a metaphor for US economics, but it really happened. And it stings. It was a great deal. As they say, "It was too good to be true".
OK, but now I'm going to also say: the US economy is a fraud also and often too good to be true.
What happened to me in the past day on a micro level is exactly what is happening on a macro level to the entire country and to every government that is using paper money and fraudulent tactics to kick the can down the road. The government wants to borrow a piece of our lives, hypnotize us into thinking the collateral is good, and forget about us later when it comes time to pay us back. And then we die.
You read Doug Casey because you're the type of person who won't be fooled and won't be robbed. That's why we are here. We want to be successful because of the flaws in the system. We want to be free from the shackles of prison. And we want to stop being lied to.
Nine Things You Need to Know
1) The average cubicle dweller is becoming impoverished.
I almost had $8 million stolen from me yesterday, so I'm in a bad mood. Someone wanted to borrow $8 million and use $18 million worth of stock certificates as collateral. I found a way to lend him the $8 million. The borrower had legal opinions from the companies involved (all big companies). He had bankers verifying his accounts. He had lawyers with bylaws, trilaws, whatever laws, to his corporations. He had access to material he would only have if he was intimately involved with the companies involved. He had lots of things to prove he was who he said he was.
Using our own detectives, we found out at the last minute that he'd forged everything. And his whole operation (lawyers, brokers, etc.) disappeared as soon as we uncovered the fraud.
When we found out, we all started laughing. Sometimes you can't help but laugh at the entertainment the world throws in your face. Thank god we didn't wire the money!
I wish I could say this story is just a metaphor for US economics, but it really happened. And it stings. It was a great deal. As they say, "It was too good to be true".
OK, but now I'm going to also say: the US economy is a fraud also and often too good to be true.
What happened to me in the past day on a micro level is exactly what is happening on a macro level to the entire country and to every government that is using paper money and fraudulent tactics to kick the can down the road. The government wants to borrow a piece of our lives, hypnotize us into thinking the collateral is good, and forget about us later when it comes time to pay us back. And then we die.
You read Doug Casey because you're the type of person who won't be fooled and won't be robbed. That's why we are here. We want to be successful because of the flaws in the system. We want to be free from the shackles of prison. And we want to stop being lied to.
Nine Things You Need to Know
1) The average cubicle dweller is becoming impoverished.
Let's take a look at the basic graphic: your income is going down versus all the things you need: food, shelter, energy.
2) Supply and demand is starving the middle class.
Population is going up, but high-quality jobs are being outsourced, globalized, mobilized, and roboticized.
I'm on the board of a $600-million revenue company in the temp staffing space, Corporate Resources (CRRS). Revenue growth last year was 35% despite job growth being about 0%. There's a reason for this.
I'm on the board of a $600-million revenue company in the temp staffing space, Corporate Resources (CRRS). Revenue growth last year was 35% despite job growth being about 0%. There's a reason for this.
3) The Fortune 500 is firing you.
All big companies are systematically firing all of their employees. I'm exaggerating, of course. Maybe.
But that's why temp staffing as an industry is going through the roof. The big companies don't want employees. Why not? They don't want to deal with Obamacare. They don't want to pay the high salaries that aging baby boomers demand, and too many employees are having sex with each other. With temp staffers, they don't have to deal with all of the issues.
But that's why temp staffing as an industry is going through the roof. The big companies don't want employees. Why not? They don't want to deal with Obamacare. They don't want to pay the high salaries that aging baby boomers demand, and too many employees are having sex with each other. With temp staffers, they don't have to deal with all of the issues.
4) Senior citizens are being starved to death.
Now I'm not exaggerating. First off, everybody under the age of 50 should just say goodbye to eventual Social Security. Even better, say "good riddance."
But for those age 65 and above, a promise has been made to them all of their lives. Well, unfortunately the promise is a lie. Social Security gets adjusted according to the Consumer Price Index (CPI), which excludes food and energy. Guess what: food and energy are going up faster than the CPI... which is why senior citizens have about ten years left before their basic needs can no longer be met by the money promised them all of their lives. Part of the reason I am about to announce that I'm considering running for Congress is to stop this trend.
But for those age 65 and above, a promise has been made to them all of their lives. Well, unfortunately the promise is a lie. Social Security gets adjusted according to the Consumer Price Index (CPI), which excludes food and energy. Guess what: food and energy are going up faster than the CPI... which is why senior citizens have about ten years left before their basic needs can no longer be met by the money promised them all of their lives. Part of the reason I am about to announce that I'm considering running for Congress is to stop this trend.
5) Your job is not satisfying your needs.
The only time I've had a job that did satisfy my needs was when I had to do little work so that I had time on the side to either write, start a business, have fun, or spend time with friends. When I didn't have time for those things, I was working too hard, dealing with people I didn't like, getting my creativity crushed over and over, and so on. When you are in those situations, you need to plot out your exit strategy.
Your hands are not made to type out memos. Or put paper through fax machines. Or hold a phone up while you talk to people you dislike. One hundred years from now, your hands will rot like dust in your grave. You have to make wonderful use of those hands now. Kiss your hands so they can make magic.
One can argue, "Not everyone is entitled to have all of those needs satisfied at a job." That's true. But since we already know that the salary of a job won't make you happy, you can easily modify lifestyle and work to at least satisfy more of your needs. And the more these needs are satisfied, the more you will create the conditions for true abundance to come into your life.
Your hands are not made to type out memos. Or put paper through fax machines. Or hold a phone up while you talk to people you dislike. One hundred years from now, your hands will rot like dust in your grave. You have to make wonderful use of those hands now. Kiss your hands so they can make magic.
One can argue, "Not everyone is entitled to have all of those needs satisfied at a job." That's true. But since we already know that the salary of a job won't make you happy, you can easily modify lifestyle and work to at least satisfy more of your needs. And the more these needs are satisfied, the more you will create the conditions for true abundance to come into your life.
6) Your retirement plan is a joke.
Nobody can retire anymore on their retirement plan. It's sad but true: humans as a species are living longer. 401ks, IRAs, and the other little plans your corporate masters and bank liars have put together for you are built on lies. They use fancy phrases like "laddering" and "the stock market has never had a 20-year down period." All of these things are lies.
Here's the truth: when you need the money the most, it won't be there.
And even if it's there, ultimately the government needs more money to take care of its wars. The last legally declared war was in 1941. Your taxes have paid for the rest of the military actions and the 170 countries we have military bases in. These wars have directly come out of your retirement plan and have directly conflicted with your attempts at happiness, if not even worse by directly killing a member of your family.
Here's the truth: when you need the money the most, it won't be there.
And even if it's there, ultimately the government needs more money to take care of its wars. The last legally declared war was in 1941. Your taxes have paid for the rest of the military actions and the 170 countries we have military bases in. These wars have directly come out of your retirement plan and have directly conflicted with your attempts at happiness, if not even worse by directly killing a member of your family.
7) You were lied to about "The American Dream."
"The American Dream" was a marketing slogan created by Fannie Mae in the 1960s to sell you the idea of a suburban house with a white picket fence and a big fat loan from the bank, backed by the government which skims its greasy froth off the top.
The white picket fences are prison bars telling you that you can't move. You can't escape your bimonthly paycheck. Your job opportunities suddenly shrink with those two prisons forced upon you.
I've done the math on various blog posts on my blog. Housing has all the characteristics of an ugly investment. It's too much of your portfolio, it's illiquid, there are hidden, unknown costs when you make the purchase, and when you need the money you can't get it. Good luck.
The American Dream has turned into a nightmare for too many people. And yet, we insist on it. It's one of the biggest commitments most Americans ever make. So "commitment bias" forces them to rationalize that they were right, and they will argue it to their death.
The white picket fences are prison bars telling you that you can't move. You can't escape your bimonthly paycheck. Your job opportunities suddenly shrink with those two prisons forced upon you.
I've done the math on various blog posts on my blog. Housing has all the characteristics of an ugly investment. It's too much of your portfolio, it's illiquid, there are hidden, unknown costs when you make the purchase, and when you need the money you can't get it. Good luck.
The American Dream has turned into a nightmare for too many people. And yet, we insist on it. It's one of the biggest commitments most Americans ever make. So "commitment bias" forces them to rationalize that they were right, and they will argue it to their death.
8) You were lied to about college.
More than 50% of graduating seniors can't get jobs right now. And yet for the first time ever there is over a trillion dollars in student loan debt. The government was really nice to back that debt.
But they forgot to tell you: you can't get rid of that debt. Not even in bankruptcy. Hmm, so jobs are going down, income is going down, debt is going up.
You're a slave. Now that you're stuck underneath a pile of inescapable debt, you have to do whatever they say and like it.
But they forgot to tell you: you can't get rid of that debt. Not even in bankruptcy. Hmm, so jobs are going down, income is going down, debt is going up.
You're a slave. Now that you're stuck underneath a pile of inescapable debt, you have to do whatever they say and like it.
9) There is a way out.
You have to hustle. It's hard. But there's nothing else. You have to choose between being a temp staffer (and I can see this from the front lines) or being an entrepreneur/artist. It's going to sound corny, but you have to stay physically, emotionally, mentally, and spiritually healthy.
You have to work on coming up with ideas every day. You have to be around positive people who love you. You have to be grateful for the abundance you have and invite more into your life. This is not economics. This is the real world and how to survive in it. Not the fantasy land of cubicles and fluorescent lights.
I write about how to achieve these goals in my latest book, Choose Yourself.
You have to work on coming up with ideas every day. You have to be around positive people who love you. You have to be grateful for the abundance you have and invite more into your life. This is not economics. This is the real world and how to survive in it. Not the fantasy land of cubicles and fluorescent lights.
I write about how to achieve these goals in my latest book, Choose Yourself.
I believe so strongly in my message that I don't care if I make a dime on the book. If someone proves to me they bought the book and read it, I will pay them back, losing money in the process (since Amazon takes its cut). I am doing this because people often don't value what they get for free, and many people don't read the books they buy.
I hope you make it through this period. The opportunities will be there for the people who escape the lies of the system. Innovation is still abundant. But you have to rely on your own skills, guts, ideas, and health. I have confidence that the people who subscribe to Doug Casey's services are the ones best prepared to do that.
Join me in choosing yourself for success in the new economy, for better or worse, that we find ourselves in.
I hope you make it through this period. The opportunities will be there for the people who escape the lies of the system. Innovation is still abundant. But you have to rely on your own skills, guts, ideas, and health. I have confidence that the people who subscribe to Doug Casey's services are the ones best prepared to do that.
Join me in choosing yourself for success in the new economy, for better or worse, that we find ourselves in.
James Altucher is a successful entrepreneur, chess master, investor, and writer. He has started and run more than 20 companies, and sold several of those businesses for large exits. He has also run venture capital funds, hedge funds, angel funds, and currently sits on the boards of several companies. His writing has appeared in most major national media outlets (Wall Street Journal, ABC, Financial Times, Tech Crunch, Forbes, CNBC, etc.). His blog has attracted more than 10 million readers since its launch in 2010. This is his eleventh book.
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