The Blackbook of Alternative Investment Strategies: 12 Little Known-Ways to Invest Outside the Stock Market

284 Pages·2015·5.92 MB·English

by  Wiedemer

The Black Book
of Alternative Investment Strategies
12 Little-known Ways to Invest Outside the Stock Market

Sean Erlenbeck & David S. Risi
Copyright 2014 by Investor Advisory Network, LLC
All rights reserved. No part of this book may be reproduced or used in any
manner whatsoever, except in the case of brief quotations embodied in critical
articles or reviews, without the express written permission of the Investor
Advisory Network, LLC. For more information write to Investor Advisory
Network, LLC, 14855 Van Dyke #444, Plainfield, IL 60544 or visit us at
www.investoradvisorynetwork.com.
DISCLAIMER
This e-book is for informational purposes only, and is not intended as legal,
accounting or investment advice. The information in this e-book is for your
general use; it is not advice and should not be considered as such. It should not
be taken as legal or investment advice or in the place of legal or investment
advice. This publication and the accompanying materials are designed to provide
general information in regard to the subject matter covered in it. It is provided
with the understanding that the Investor Advisory Network, LLC is not engaged
in rendering legal, accounting, investment or other professionals’ opinions. If
legal advice or other expert assistance is required, the service of a competent,
qualified professional should be sought. We do not represent, warrant, undertake
or guarantee: that the information in this e-book is correct, accurate, complete or
not misleading; that the use of the guidance in this e-book will lead to any
particular outcome or result; or, in particular, that by using the guidance in the e-
book you will increase your cash flow, profits or otherwise experience monetary
gain. Investor Advisory Network, LLC will not be liable to you in respect of any
losses arising out of any event or events beyond our reasonable control. We will
not be liable to you in respect of any business losses, including, without
limitation, loss of or damage to profits, income, revenue, use, production,
anticipated savings, business, contracts, commercial opportunities or goodwill.
Reproduction or translation of any part of the information contained herein, in
any form or by any means, without the written permission of Investor Advisory
Network, LLC is unlawful.
Table of Contents
FOREWORD BY ROBERT A. WIEDEMER
Contributor: Robert A. Wiedemer, Managing Partner, Absolute Investment
Management
CHAPTER 1: A NOTE FROM SEAN ERLENBECK
Sean Erlenbeck, Co-Founder, Investor Advisory Network
CHAPTER 2: A NOTE FROM DAVE RISI
Dave Risi, Co-Founder, Investment Advisory Network
CHAPTER 3: SELF-MANAGED IRA: TAKING CHARGE OF YOUR
RETIREMENT
Contributor: Easy IRA Solutions
CHAPTER 4: STRUCTURED TO WIN: HOW TO MAKE MORE AND
KEEP MORE OF YOUR INCOME FOR YOURSELF AND YOUR
FAMILY TO ENJOY FOREVER
Contributor: Drew Miles, Esq., President, Pathfinder Business Strategies
CHAPTER 5: WHAT YOU NEED TO KNOW BEFORE INVESTING IN
GOLD AND SILVER
Contributor: Doyle Shuler, Gold Silver Alliance
CHAPTER 6: INVESTING IN OIL & GAS: AMERICA’S NEW
GROWTH ENGINE
Contributor: Chris Faulkner, President & CEO, Breitling Energy
Corporation
CHAPTER 7: RESERVE CAPITAL STRATEGY: THE #1 STRATEGY
OF THE WEALTHIEST FAMILIES IN AMERICA
Contributor: Sean Briscombe, CLA, CMPS, Senior Consultant & Wealth
Strategist, National Institute of Financial Education
CHAPTER 8: THE ASSET OF THE CENTURY
Contributor: Samuel T. Prentice, Barefoot Retirement
CHAPTER 9: INTRODUCTION TO FOREX TRADING
Contributor: Joshua A. Bevan, Managing Director, BlackBox Alpha
CHAPTER 10: THE MOBILE HOME PARK INDUSTRY AS AN
INVESTMENT VEHICLE
Contributor: Frank Rolfe, Vice-President, MHP Funds
CHAPTER 11: INVESTING IN SELF STORAGE UNITS
Contributor: Scott Meyers, Owner & President, Alcatraz Storage
CHAPTER 12: THE POWER OF CASH FLOW INVESTING
Contributor: Jeremy Roll, Roll Investment Group & FIBI
Contributor: David Coe, Founder, Freedom Growth
CHAPTER 13: WEALTH THE RIGHT WAY
Contributors: JP Newman and Adrian Lufschanowski, Owners &
Operators, Thrive, FP
CHAPTER 14: CREATE AND PROTECT WEALTH WITH REAL
ESTATE
Contributor: Jeff Ballard
CHAPTER 15: “NO MATTER WHAT IT TAKES” STRATEGY FOR
REAL ESTATE SUCCESS
Contributor: Peter Vekselman, Real Estate Investing Coach
End Notes
Foreword by Robert A. Wiedemer
Stocks will always go up over time. At least that’s what just about every
stockbroker and financial analyst will tell you. Ignore the valleys, because the
peaks will always be higher.
It was good advice—for about 20 years. Between 1980 and 2000, picking stocks
was easy. A broker could pick a portfolio of stocks by throwing darts and
probably earn 10 to 15 percent returns every year. No wonder “expert” analysts
rated 95 percent of stocks a “buy.” It was a great time to be a Wall Street broker.
But consider this: when adjusted for inflation, the Dow in early 2014 is more or
less where it was in 2000. In the last 14 years, stocks have essentially gone
nowhere. In fact, if you look at the chart below, you’ll see that—when adjusted
for inflation—nearly all the growth in the stock market in the last 65 years came
between 1980 and 2000. In the other 45 years, stocks have barely grown at all.
Still, you might argue, there’s something to be said for keeping your money
current - better for an investment to keep up with inflation than to be losing
value. That’s true; but consider how precarious even the stock market’s modest
gains are. The U.S. Federal Reserve is currently pumping $75 billion dollars
every month into the economy in order to boost activity in the stock market.
That’s $900 billion a year. You would think with all that stimulus, the stock
market would be soaring.
Stocks will always go up over time, we are told. But the 1980s and ‘90s were
not normal. Adjusted for inflation, stocks have gone nowhere since 2000.
But that’s because we’re still recovering from the 2008 financial crisis, you
might say. First of all, the financial crisis was more than five years ago now.
Aren’t you a little tired of waiting for this so-called “recovery” to make its way
into your portfolio?
Secondly, and more importantly, back up a few years from the 2008 crash and
what do you see? Another crash we had to “recover” from. That time it was the
“Internet bubble,” the bubble no one saw coming until it was too late, the bubble
that would never happen again. Sound familiar?
Now let’s take a look at the facts on the ground in 2014. The Fed has created a
massive dollar bubble, quadrupling the money supply in six years. The national
debt is exploding, now over $17 trillion in early 2014 and still accumulating by
more than a half-trillion dollars each year. The stock market appears to be
increasingly divorced from reality, with nearly 30 percent price gains for the
S&P 500 in 2013 in spite of single-digit earnings growth. It’s easy to understand
why there is growing concern that stock prices are reaching unsustainable levels,
and that another crash might not be too far off.
You may share that concern and you may not. Either way, if my investment is
only keeping pace with inflation over a 14-year period, I expect a lot less risk
only keeping pace with inflation over a 14-year period, I expect a lot less risk
than that.
Wait a second. If stocks in general aren’t growing much, then the key is just to
pick the right stocks, right? Well, yes and no. It’s true that some stocks do better
than others. It’s great to invest in a Coca-Cola or McDonald’s in the early days
and watch it take off. However, when stock prices drop, they tend to drop across
the board. If you have a diversified portfolio of stocks—as most stock owners do
—your portfolio will tend to go up and down with the stock market in general.
The key is not just diversity among stocks, but diversity among asset classes.
That doesn’t just mean stocks and bonds, either, but a whole assortment of
investment options. There are assets that may perform well even when stocks
and bonds are suffering. However, they may not be obvious to an investor whose
experience is limited to ticker symbols and Treasury Direct.
While inflation (and the rising interest rates that come with it) is poison to stocks
and bonds, for example, it is favorable for precious metals like gold and silver.
This is an important consideration when the Federal Reserve is expanding the
money supply by almost $1 trillion every year. If the U.S. dollar falls in value, it
has heavy implications for energy commodities and foreign exchange. How can
you take advantage of that if you are only investing in U.S. stocks and bonds?
This book will hopefully help you overcome this problem. While it might feel
safe to stick with traditional investments, the last decade or so should make it
very clear that the stock market isn’t safer than any other kind of investment, and
is even more risky than some. Alternative investments will be very important.
The days of earning double-digit returns every year with little or no effort are
over. It’s time for investors to get educated, take control of their financial future,
and not be fooled by Wall Street “experts” who keep feeding them the same old,
tired line from the 1980s and ‘90s.
No investment is risk-free. With the help of this book and a little diligence,
though, you can learn to manage risk and reap rewards while other investors
blindly ride the stock market roller coaster -wherever it takes them.
Contributor: Robert A. Wiedemer, Managing Partner, Absolute Investment
Management
Author of New York Times and Wall Street Journal Bestseller Aftershock and
Wall Street Journal Bestseller Aftershock Investor
www.aftershockpublishing.com
www.absolute-im.com
Chapter 1: A Note from Sean Erlenbeck
This is what your financial planner never told you about investing, and the
shockingly simple wealth strategies that guarantee you’ll get a fair return on
your money... without increasing your risk.
In 2010 just after the market crashed due to an unstable housing market, I met
Dave. At first we were business associates. He was selling safety software and I
was a safety manager for a general contractor just outside of Chicago, Illinois.
At that time my soon-to-be good friend and business partner asked me, “Are you
investing in silver?” I asked, “Why?” He replied “After what happened with the
Stock Market I am getting out and investing in other assets, like gold and silver”.
He mentioned that the price of gold and silver would be on the rise and that I
should invest as insurance against the devaluation of the dollar.
Of course I thought his doomsday mentality was exactly that - a paranoid person
who was obviously distraught by the recent market crash. I mean, the Stock
Market always goes up over time, right? I decided that I would keep my money
right where it was, in the Stock Market. I felt good about my financial position. I
was doing everything my Financial Planner told me to do. As a matter of fact,
my guy said that I was one of the few investors that really understood that no
matter what, the market always goes up. I was contributing to my 401k at the
max rate; I had ROTH IRAs in both my wife’s and my accounts. I started a 529
savings plan for my son as soon as he was born. Heck! I even had a Pension Plan
with the union in which I was vested. I had it all figured out. Or did I?
Fast forward two years... In 2012, I was just starting to recover the losses I
suffered in the Stock Market. The DOW was approaching 13k and I needed to
get up to pre-2008 levels of 14k before I would break even. At this point, it
dawned upon me that I had been waiting FIVE years to make ZERO interest
from my traditional investments.
After realizing this, I asked my now-good-friend Dave during a business
conference what he was doing with his finances. He showed me a website called
the Elevation Group (EVG). I didn’t know it yet but this would change life as I
knew it. The Elevation Group is a website that introduces ways to invest your
money other than the Stock Market.
When I returned home I immediately needed to find out more about the
Elevation Group. For the first time in my life, the education I was getting made
absolute sense to me. I didn’t feel like I was just handing over my money to a
Financial Planner and hoping they’d make me a killing in the stock market, but
Financial Planner and hoping they’d make me a killing in the stock market, but
rather I was educating myself and gaining confidence to go out on my own and
invest for myself in areas I had thought were reserved only for the rich.
Financial freedom was a new word for me and I was determined to make it my
credo!
At this time I was ready to make some moves. EVG offered one educational
video for each investment strategy, so I started to contact the businesses that
offered the type of investments in which I was interested.
The first was a company that specialized in Infinite Banking, a concept made
famous by R. Nelson Nash. This particular investment strategy made me very
nervous as there were a lot of uncertainties and a heck of a lot of other
companies that were doing the same thing but using different insurance policies.
In the end, I did not invest in this concept as I felt I did not receive enough
education from my source to stick my hard-earned money into. I did, however,
think it was an intriguing strategy that needed to be explored further.
I then moved to the next strategy that I felt would benefit me: converting my
traditional IRA and ROTH IRAs to a Self-Directed ROTH IRA. This strategy
allows an IRA to invest in tangible assets such as gold and silver or Real Estate.
Again, I was given one source and that source did it one way.
Further education on this subject led me to the fact that there are two way to
accomplish this. One is to have an LLC own the IRA, commonly called a
“checkbook” IRA. The other is to have a custodian manage the IRA, with you
being the owner. I decided to go with the custodian as I did not wish to further
complicate my life by creating entities, which I’d never done. Later I ended up
transferring all my assets to a “checkbook or LLC” style. The reason why will be
revealed further in this eBook.
My last investment was gold and silver. It’s a pretty simple process, but I have
to admit I was very nervous doing it the first time. (Wouldn’t it be great to read
reviews and people’s experiences that have done like investments, first? This
will be a major area for subscribers to our website as our membership grows and
we start receiving feedback from our members.)
So, what did I do with all of the money I had in my IRA?
Before I established my Self-Directed IRA, I contacted my Financial Planner
and asked if I could buy physical gold and silver. I was told I could not. If I
wanted to invest in metals I would have to purchase Exchange-Traded Funds
(ETFs), such as SLV or GLD. Well, if you remember, it took me FIVE years to
make my money back in the Stock Market and I wanted out. Buying ETFs was
not an option for me.