Every investor should look to create wealth in a sustainable manner and activate their net worth. The reality is, many go about it the wrong way. They believe in investing in the public sector, i.e., the stock market - a place where they have no control over their investment.
Every investor should look to create wealth in a sustainable manner and activate their net worth. The reality is, many go about it the wrong way. They believe in investing in the public sector, i.e., the stock market - a place where they have no control over their investment.
The stock market is a centralized system, and it's also the worst possible investment choice. Not only is the wealth you gain through it hypothetical, but it also deprives you of having any control over your investments.
A real investor, a Solomon investor, seeks out situations where they can create real, tangible wealth, without having to sacrifice their authority to do so.
In this first-ever episode of The Solomon Investor podcast, we go over the arguments for why you should aim to pull your money out of the faulty centralized system we call the stock market and start investing in the private market.
Keep reading to hear more about why having control over your investments is essential for building wealth and learn how to stop gambling with your future.
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- What is the biggest Ponzi scheme in history? And what if I told you, you are a victim inside it? This podcast is going to be very important and your investing future depends on it. Okay let's call it time out for a second. Let's break this down simpler.
- Right.
- The reality is there's so much here and you've got to take these little pieces and put them together.
- [Zach] Yeah.
- So let's take a casino story for example. Give us something that we can actually tangibly walk through and understand in a framework.
- Right okay, so if we're going to break down the exchange simply, when you've got into the stock market, when an investor gets into a stock market, they're showing up with real cash. They're showing up with their money, okay? So it's just like walking into a casino. When you walk into the casino, you show up with real cash. The first thing they do is the casino takes your cash, right? And they exchange you chips, right? They give you chips to go play with, right? And so you're going to go out to the casino, you're going to go out and play the games, you're going to know that it can go up, it can go down, right? So what do you do? Maybe you diversify the games, you go out and maybe you play some blackjacks, some poker, some slots whatever it is, roulette, right? And you take those chips and you start playing with it, right?
- And the chips I'm actually believing that this will get me into the game.
- [Zach] Right.
- It will get me into the transaction. I'm actually putting chips down because I think I'm going to get more chips but the only reason I want more chips is because I think the chips are worth something.
- Right, so what's happening is you're going out and you're playing the games, you're riding it, the market is going up, its going down. Maybe it's going up, right? You're on a high, you're at a hot hand, right? And you don't want to leave on a hot hand but the truth is there's only two scenarios, right? There's only two outcomes. Look, if you most of you I'm sure have been to the casino, right?
- Let's go, come on.
- I mean you win you're there, there's really two things that are going to happen, right? You're going to produce, right? Are you going to a, well first option, you're going to play until you don't have any more chips, right? And then you're done, right? So my chips are gone, I'm done playing, okay? I've lost my chips, the casino at the endpoint, they take the chips back, they take the cash back, it's gone, right? Scenario two, I'm either up or I'm down but I still have value in my, I still have chips that I'ma hold of and then at some point I say, okay I'm done with this, I pick up my chips, I leave the table, I go back to the casino and I say take my chips back, I want the real money, right? And so that's what people need to understand is the chips aren't the real money, the cash is the real money, right? The cash is the real money and here's like here's the greatest problem that people have to understand is that the casino can always have more chips in circulation than there are actual real dollars. It's the same with the stock market.
- Okay, so I got a call no timeout. Let's break that down even more. When you say that they can have more chips, some more chips in circulation, there's people playing that they've given their money, they get more chips, how is there more chips in circulation than the real money 'cause I thought I just asked, didn't I believe that the chip was worth a certain amount of money, so how--
- Equal exchange, right?
- Yeah.
- Well, truth is no. It's not an equal exchange, right? Because they can have as many chips in circulations as they want because they're betting on the fact that people are going to do one of two things. Keep playing or leave with less than they came with, right? Can you win? Sure, some people are going to get a hit a lucky number and they're going to win and then hopefully at that point, right? there up, they went ahead and pulled their money off the table then they left, right? There's never an option three. Like let's be honest, okay? So this is the problem with the actual stock market is there's never an option three where you would never just tell the casino, "You know what? "Just keep playing with my chips "and my retirement, my future, my savings, "my kids college fund." You wouldn't just have the casino keep playing with your chips and knowing that they're betting on and you're walking away with less, right? Because they're betting I can have more chips out because I know that either a, there's going to be another guy who comes and buys the chips if I have to pay you out, they'll come and put their cash in and I'll give chips out or b, you're going to lose and I never have to pay you. So I can continue it in circulation and bet that you'll never walk away with the actual thing that ever had value and that was the cash.
- So the reality is that the biggest Ponzi scheme in history is truly this centralized system called the stock market and the reality is, it's just like the casino. Everyone's doing it for entertainment, everyone's buying into the dopamine hit like it's going to go off the emotion like they're looking for the serotonin, looking for status, looking to get something big out of this. I mean you're even looking for oxytocin, some connection. You're looking for like, I want to be a part of something. I want to ride the wave. I was talking to the investor the other day. The market as you know where in 2020, it just took a huge nosedive. Obviously there's many things going on to the elephants not in the room like you understand what's happening right now. It's taking a 32% hit. I was on the phone with one of our clients who still had money in the market and they had so far bought into the rules that they actually said, "I think even though I've lost 32% "on what I still had out there, "I think now would be a great time "to go buy some more chips."
- Right.
- To go buy some more chips and the realization is you just missed it. The house always wins.
- Right and the house is betting that you'll stick around long enough to where they can just keep putting the money forward and never have to give the money back. So fact as of February 12th 2020, the Federal Reserve says there's 1.75 trillion dollars, like physical tangible dollars in circulation
- And the current value placed in the stock market is roughly $34,000,000,000,000. Now this sounds very much like the casino in gamble.
- There's more chips in circulation than actual dollars.
- Okay, again to break this down, so we're talking 1.7 trillion has gone to the table at the casino.
- Right.
- 1.7 trillion is gone across the table and this is not 1.7 trillion in the market, this is 1.7 trillion in physical circulation, the grocery store buying gas, savings accounts and then in the market, this is total total total money but 34 trillion of inflated air digits is in the market. What does that really mean?
- So think about it like this. You had investors or people at the casino, they showed up, they put in 1.75 trillion. There's no more dollars, that's all the casino has in the vault and there's no more elsewhere, they're not borrowing it from anybody, anything like that. That's what is there. And let's just imagine that everyone at the casino was winning. They were winning basically 16 times more than what they had and then the question becomes, this a scary part, what happens if everyone decided to get up and go cash in their chips.
- The reality is this. There's no actual tangible money to give them because there's 1.7 trillion in total circulation and there's 34 trillion that people are expecting to get back. Okay, so breaking this down into an example, we'll call him Bob. Bob, 64 years old, he's been looking at retirement for quite a long time. He's like, "Man, this is my season. "I think now is a good time to retire." Now bob has had maybe even a match program with his company. So he's been putting money in, the company's been putting money in and where are they putting it in? Op, the centralized system, the stock market. The public market. So the public market means you on the outside, you're putting money into public shares but the centralized system that runs the whole thing is the house. Now, for most of our investors, clients, new clients, the good news is this. You again who were putting in some, when you're in your 20s and your 30s and then your company maybe matched some so you've accumulated some but you were buying into the rules that the money your company was putting that was real, the money you were putting in that was real was going to stay real.
- [Zach] Right. And then that real money was going to create, well, real money and that one day you could pull all that out and then actually tangibly have that. But what you just said was so important because if everyone decided, hey this is a great idea, we just had money that has accumulated and it's now time to use it in real life. It's actually not there.
- Yeah just like the casino is betting that a new person will walk in and put more money into it. So the casino is betting that they can either pay you off with a new investor, a new customer's money or b not have to pay you, right? You wouldn't go into the scenario with in the third option and this is where they try to keep you, right? Is they tell you, "Well, just leave it in here, "just leave it in here "and we'll slowly pay you back some "of your chips over time. "You can retire and we'll start paying you." But you wouldn't leave. You wouldn't just say, "Keep my chips and pay me back some of my dollars." There's two points. There's only two times where you can actually have money if you're going to go to the casino, okay? One, before you walked in the door and cash it in for chips.
- Right.
- Right, there was real money then. The only other time there's real money is when you actually take your chips and you go cash it back in for real cash. So it's the only two times. Now could you have grown while you are at the casino? Yes, but it will never ever be your money. It will literally never be your money until you pick your chips up and go cash them in for dollars.
- And the only difference with the casino and the actual centralized system is that everyone who's actually physically inside the casino at that moment, if they have chips, they'll always be able to collect. They have chips they can go turn them back in. But in the stock market, that's not the case. Matter of fact majority of people have had to set it and forget it for so long, they don't even know how much they got. And the reality is, the statements that come from the financial advising firms, don't even have all the fees on them. Like you don't even know how we're looking at the statement--
- [Zach] You're just watching the number.
- Yeah, just watching the number. We're looking from a statement from one of our recent clients who just transferred a big chunk out of the market and there was no return on there. There's no actual tangible, like this is how much return on investment you made.
- Right. Their fees weren't really on there either and the reality is there's 33 fees teeny little fees from the point that the money comes out of the market to the point that you receive it. They aren't actually even in your financial advisors' paperwork. So the realization here is that if you have money in the market, you actually need to pull it out to put it actually to work or you actually don't have anything. The truth is, to make money tangible, your net worth has to be activated. Without it being activated, it's literally just up in a cloud. It's all up in a cloud and it's ran on a volatile emotional market. So when you're doing well, I was talking to a guy two years ago who's not doing well now by the way, I was talking to a guy two years ago and that man, "I loved Trump, Trump's my man, "he's my hero. "Like I'm making 12%." Another guy said, "I'm making 15% on my money." The realization was, he didn't want to leave the poker table. He didn't want to leave the craps table. He didn't want to leave--
- You don't want to leave a hot hand.
- I got a hot hand and principle number one is a hot hand must be sustainable or the house always wins. If your hand is hot and it used to not be hot, that means it's going to not be hot in a coming time if you stay at the same table. So what does that mean? You got to pull those winnings off. You got to actually take your money out. you got to close down and realize the house is going to win. If I have a challenge, if you could really just think through, how many people do you know have money that put money in the market which is almost everyone you know. But how many do you know who have taken all their money out? The realization is you probably don't know 10 people who have taken all their money out.
- It has to stay in there.
- It has to stay in there because that's all the rules that have been created that you got to keep it in, keep it in, keep it in. Even a 32% like you've just lost 32% in the last two weeks. Individuals say like, "Man but it's going to come back, "I should probably throw more money in. "I should probably double down." What?
- Yeah, the key principle that I think everybody has to understand. As a Solomon investor, the first thing you have to do is activate your net worth and the only way you activate is by gaining control and the only way to gain control of your net worth, of your portfolio, of your money, is to say, "I've got my chips "and it's time to go cash in." It's step one, it is the first thing you have to do, you have to gain control and there's no control in the markets. It's all speculative like we talked about.
- The two questions that I get are the two challenges that I get on a regular basis from clients that are making that transition. Our number one, I'm having a struggle because I think it's going to go back up.
- [Zach] Right.
- It has to go back up. And number two is, man I've been in for so long, there's probably going to be a lot of taxes. How would you handle the first one? It's probably going to go back up.
- Going back up, right. So again this is like sitting down at the table. I'm down, right? I'm hurting, well, the only way to get it back is to keep playing and if I keep playing, I'll be able to drive back up, the markets going to come back. Well, here's the thing. The question that I bring back to them and what I want everybody to take away is how can you gain control when you're tied to the public market? So like if we pause for a second, everybody went into the public market for a couple reasons. These were all good principles. You were told that you should invest and grow towards the future.
- Absolutely.
- Like you should do that. You should invest in businesses that are quality businesses that produce good returns, and produce cash flow, got it. Like let's have real estate. We can get in, we can buy things that are real estate market and we're looking for ways to invest into products if you will and those products are, we've been told that to do that, to get a piece of these things, I've got to go into the public market. I've got to play that game and I've got to get it that way. But the truth is, everybody has had the right principles like the whole invest for the long-term, like that's a good principle. We should be investing thinking about our future.
- Absolutely.
- Right? And that it will go back up? Well, if you don't have control, you don't have control so you can't bet on that. But if you can escape the public market, understand that all the principles you were sold, held principles people like you, investors were sold on the public markets, all of those principles are good and true principles. Unfortunately, they're just not available in the public market. But the good news is, there's other opportunities.
- And the realization which you just said was so important is that, it's not available in the public market.
- [Zach] Right.
- But the private sector, all those same principles actually do work. As you mentioned on, but it ain't going to go back up, well not on the public market, not on the public side. To just break that down for a second, we don't know or have control of the actual house so that's why when you leave the casino, you always take your money out because you don't have control. You just did good but most of you, come on, you accidentally did good in the casino. In the actual stock market, you didn't have control, you had no influence. One could say, you accidentally did good. You picked the right thing, you put your money in the right location for a minute.
- Just at the right time.
- But if we understand that everyone can't actually pull their money out, well then the rules don't apply in the public market, they do in the private sector so you'd need to now say, "That was fun." And if you lost money, "Hey, it was fun for when it was fun." Like when we had a good ride, we had a good ride and just realized that this is not a place you should actually stay, going back to the casino example, you come in with X amount and then you build up 3x or 4x or 10x and then you play that down and then you actually, you get a little excited and you throw a little too much on one and, but maybe you're now at 1.5 X or something. You're like, "It was good."
- Right.
- You don't buy into the fear because you keep it as a game. And if you're in the public market, it's still just a game. It's like when some of your stock trading websites will give you a paper money. They trading like opportunity to try it. That's really what the market is and so you've got to realize that there's more sustainable methods. you want sustainable income, you want to actually activate it, protect it and make it sustainably create income every single day. And I hear people all the time say, "But that's not sexy." I'm like, "What sexy?" The whole point was your retirement. The whole point was a certainty of cash flow. The whole point was you actually had something in the future you could always count on. The whole point was you had money making money on your money. Though real investors, a Solomon investor desires that sustainable wealth.
- [Zach] Right.
- Real investors, Solomon investor, desires to always know you got money. And so when you activate your wealth in the private sector, you then have sustainable wealth and in 14 years, that's why Zach not one single investor's lost money. Its sustainable, its cash flowing and the nest egg that you removed from the market from the public market, you still have that, it's tangible, it's out of the house.
- There's real control.
- It's real control. Yeah, that's a big difference in the private versus the public. It's as a Solomon investor, you literally create massive wealth. A good example as on a 15-year plan as a Solomon investor, you could literally have certainty of a 217% rate of return over that 15 years. And come on man, the realization is, every investor really wants what in the end? Tangible certainty. That when I need the money, I'll have it.
- Right, and just going back, when you go back and you realize that the definition per the SEC of a Ponzi scheme is directly applied to the stock market. I don't know how you can keep playing the game. I don't know how you can keep going forward in good conscience knowing that it's not what you were promised. You were not tied to the returns of the market, you're tied to the returns only of selling it for another thing. So what people need to understand, the key takeaway today, is control. And only way to get control is by taking those good time-tested principles and applying them in the private sector where you can actually be invested in a business. Where you can actually have real estate. Where you can actually have control and influence and impact towards your future, towards your legacy and build a life that can be sustainable, right?
- And today if you can't pick 10 people that you've seen pull their money out, they've seen the massive results and now they actually have that tangible, then you've got to call timeout and say, "It's got to be a Ponzi scheme." And you see the writing on the wall, SEC has already agreed like this is what it is. We just have a centralized system that the whole entire government is built off of and trust me you don't want to be the one holding it at the end. As a Solomon investor, we want you to actually have purpose, impact and legacy. We want you to actually have sustainable wealth that you can count on. We want you to actually have exponential growth or you can truly rest while you invest. It's literally a different world. In the private sector world, you actually have control, you actually can protect it. In the public market, you can't protect it, you have no control. There's new rules that you've got to learn and what you've got to continue realizing is I just don't know what I don't know because the things in which you've been taught, only apply in the private sector. We've got so many more things that when you actually unlock every single key secret, it'll actually take your investments to a whole 'nother level.