How fast did Venezuelan $ become worthless? (PS I was there).
May 2015 bolívar lost 25% value in week; $300 = $1
May 14, $400 = $1
May 21, $500 = $1
July 3, $600 = $1
Feb 2016 $1k = $1
Nov 9, $2k = $1
Nov 21, $3k
Feb 2018 lost 99.6%, 25k = $1
Today $248k = $1
In economics, things take longer than you think, then happen faster than you think.
Don't be left holding the last Bolivar. Asset up.
This was a tragedy.
Started by incompetent politicians
Finished by idealistic citizens
I saw it happen in Venezuela & in Argentina.
My business (and all expats) kicked out of the countries.
Our clients carrying their belongings.
Businesses stolen from owners.
Run into the ground by "nationalism."
Story as old as time.
Hope we learn our lesson.
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When I started in finance, I had to google what a mutual fund was.
Not my 💡moment.
How bout I save you the embarrassment of doing what I did & asking if I had to "carry" something when they said I got carry... 🤦♀️
Top terms to know (so u sound supa smart):
#1 Equity kicker
- Aka a sweetener
- An option to buy equity...
- At a discounted price...
- Bc u invested in a company today...
- Like when they throw in hot dog when u buy a car (same same really)
#2 Full ratchet 🔧
- If company u invest in goes down in value...
- 🔧 for preferred shares protects u from...
- Getting diluted (aka owning less of company)
WHY PASSIVE INCOME IS CRITICAL? And how to get it?
1st Why?
Out of a job for a year is NORMAL
- 60% of American adults live with chronic illness
- 42% have more than one
- 1/4 Americans will have a disability (That’s 61 MILLION PEOPLE)
Even for us young hustlers:
- 1/4+ of today's 20 year olds can expect to be out of work for at least a year bc of a disabling condition before they reach retirement
And yet we SUCK at saving:
65% of households lack a mere six weeks of take-home pay on hand.
37% of respondents unable to cover more than a month of normal spending.
I'm actually concerned we may default on our national debt.
Anytime a country has gone to 130% det / GDP it has been a metaphorical point of no return.
The country has defaulted, a 🧵based on an industry report that got me humming.
Story time: Over the past 200 years
98% of nations that hit 130% defaulted on their debt (usually through inflation.)
Japan is the only one in 200 years that hasn’t defaulted BUT
Japan is rare...
Japan is a nation:
- in budget surplus (i.e. they run a net profitable biz)
- internally funded (i.e. they buy their own goods)
- with a Net Int’l Investment Position (NIIP) of +70% of GDP (aka they save a lot, and can ask for their $ back from other countries i.e. US.)