When it comes to money, mainstream financial advice is borderline negligent. One of the most important concepts in economics, finance and investing is essentially ignored in economics classes, investment newsletters, and financial books — that concept is “wealth cycles”, and if you understand it, you’ll be able to retire early if you want, or die a much richer person.
I learned about the concept in The Elevation Group, and have researched the concept exhaustively in the last few months, only to be completely surprised that almost nobody is talking about it. If you want to learn about this in video form, sign up for their webinar — there are a limited number of seats, so I can’t promise anyone gets in.
The Forest from the Trees
I think sometimes we can all get caught up looking at individual trees and we forget to look at the forest itself. There is no doubt in my mind that we are in the midst of one of the largest transfers of wealth ever seen in the history of mankind, but that doesn’t mean anything if we don’t know how to be positioned in the areas receiving the flow of wealth instead the areas losing the flow of wealth.
Wealth is almost never destroyed. It usually just moves and transfers from certain types of asset class into others on a global scale.
If we can get a big picture grasp of the movement of wealth we can start learning which asset classes to step into and how to position ourselves in them. The knowledge and the prediction of how wealth moves can help form our financial map for the future and can make the difference in wealth flowing towards our position or away from it.
This type of big picture paradigm helped give The Elevation Group members an extremely important big picture overview. This paradigm I’m about to share with you helped us position ourselves for the long term wealth changes coming instead of living and attempting to outguess the day to day bumps.
The concept is called Wealth Cycles and is a fundamental big picture philosophy for the movement of wealth throughout the globe.
Wealth Cycles: The Forgotten Economic Principle
The concept goes like this: Value shifts in and out of asset classes all the time, and in the long term, asset classes “bubble” and eventually burst. This happens because certain assets cannot continue growth indefinitely when compared to other asset classes. If they could, other basic assets would become non valuable and non existent. This isn’t possible in the real world.
The natural course of general asset classes flows through four stages:
Overvalued (bubble) —>
(And sometimes back to stage 1: Undervalued)
Generally when some classes are undervalued – other classes are overvalued. The “value” or “wealth” is never destroyed – it only flows from one class to another.
Some exceptions mess with the equation. For example, the overvalue and collapse of the housing market didn’t necessarily “steal” value from another asset class as much as it created false value by creating bad debt.
When the housing market collapsed, the value didn’t “flow” into another asset class as much as it put a huge strain on the dollar – making the wealth value flow out of the dollar itself… of course, this propped up gold and silver, leaving us much richer because of it.
Still, lets take this concept and take a large step back to look at the forest.
Is the Dollar an Asset Class?
Have you considered that the dollar itself is an asset class? That U.S. Bonds are traded on the market by U.S. Banks and the Federal Reserve as an asset?
What if our measure of wealth is going through the same cycle – and once it reaches stage four – it will either have to be reinvented or completely replaced?
This should impact how we measure and compare asset classes drastically. Traditionally, most people measure their wealth and asset classes in terms of dollars. If the price is rising in dollars, it is assumed that the value is also rising. But what happens when the measuring stick itself is going through the phases – when the measuring stick itself is losing value?
It changes the game completely. Instead of measuring The Dow or A House or A Company in terms of dollars – you can give yourself a much more accurate picture by taking the time to think in terms of measuring asset classes against each-other.
How many ounces of gold is a house worth today? What was it 20 years ago? 10? What type of movement are we seeing?
Or how many measurements of The Dow was your house worth 5 years ago? Today?
What asset classes are undervalued? Overvalued? Bubbling? Failing?
By measuring asset classes against each-other we begin to see the true story. A much bigger picture. This helps long term wealth protection and creation become more relaxing and apparent.
It also gives us real incite into the true condition of our dollar.
This type of invaluable thinking and measurement makes the complete difference for me during these changing times because it grounds my investment action in a foundational philosophy and view of the markets that makes sense.
The Elevation Group spends several hours teaching you the history of the Wealth Cycles concept, how to apply this concept to your situation and teaches you how to take a step back and see the big picture – giving you the patience and the faith to make the decisions that will cause wealth to flow towards you instead of away from you.
This article barely touched the surface of just this one of several lessons offered by The Elevation Group. It also covers everything from learning more about real estate, learning how credit really works, learning about gold and silver in-depth, learning how to predict the market, learning how to build multiple income investments at once, etc.
Seriously, what I spent joining the group is the best investment I’ve made in years.
If you want to learn more, click here and sign up for the free webinar.
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