The Assets to Own to Protect Your Income…
There’s always a reason…
Soon, I’ll be hosting my fourth Passive Income Workshop.
Every time I’ve done so, the economic environment has been fundamentally different… which says a lot about how rapidly America’s situation has been changing, given that the first workshop was in late 2023.
Lots o’ flux in the last 18 months.
This time around, we have ourselves a new bugbear to deal with: the weakening dollar.
The dollar decline is a key reason why everyone needs to prepare their nest egg for the changes afoot.
This is something American investors haven’t had to deal with at a fundamental level since the period from 2001 to 2008, when the dollar fell nearly 42% against a basket of major currencies.
Just to give you an idea of how other assets performed during that era… gold was up more than 270%. Templeton’s Global Bond Fund surged nearly 140%, which is quite the stupendous feat for a bland ol’ bond fund.
Now, I’m not telling you to rush off and buy those two assets (though, you know I am a huge fan of gold, and you should be buying as frequently as you can afford it).
Instead, today’s dispatch aims to frame for you the challenges a retirement portfolio faces in a world where the US dollar is on a southerly track.
Let’s start with the why…
Why, El Jefe, do you suppose the dollar is headed down? We’re America—I’m sure you’ve heard of King Dollar, no?
Si, si, señors and señoras.
This is not me predicting a dollar dive (I will say, however, that I’ve been warning for several years that this day was coming).
Instead, this is me reading and listening to the words Team Trump has offered up in various forums (not a political statement). Various members of the admin have openly stated or have published treatises on the need for America to weaken the greenback in order to A) make US goods more price-competitive overseas, and B) try to lure manufacturing back to US shores.
I am taking them at their word that their game plan is to methodically erase the dollar’s global strength.
And in that game plan, one fact is certain: a weak dollar will have direct impacts on American personal finances, particularly for retirees.
Most pressing: A weak dollar means, by definition, that the greenback loses value relative to other currencies.
The problem there is that America imports lots of stuff.
Some of it is consumer products such as Korean TVs, Mexican avocados, Japanese cars, or clothes and shoes made in Thailand, Cambodia, Pakistan, Vietnam, Colombia, etc.
Some of it is raw materials none of us ever really see, but which go into all kinds of industrial and consumer goods ranging from American-made steel to American-made pharmaceuticals to American-made paints and American-made auto parts… and on and on.
When the dollar is worth less, then the cost of all those finished goods and raw products is more expensive in dollar terms. It’s just the simple math of the currency see-saw; one currency going down means another must go up. The end result: consumers/companies have to pay more dollars to buy the same amount of product. That’s inflation.
So, as the dollar heads lower, the costs that Americans must pay to live their everyday lifestyle goes up, by necessity. That can be especially biting for retirees on a fixed income.
There’s an antidote to this: Diversify away from the US dollar… and own the right kinds of investments that are going to give you what I’ll call a “win-win income stream.” I won’t lay out all the details here because this dispatch would turn into a novella, and ain’t nobody got time for that today… but I will say this will be a key focus for my upcoming FREE Passive Income Workshop.
If you know a hurricane is coming… if you can see the satellite imagery of the beast just offshore, and all the weather-folk are telling you, “Hey, so we got this big storm just offshore and it’s gonna cause this and that and the other kind of problems, so, you know, you probably want to start preparing now…” then the time to prepare is now.
In this analogy, Team Trump represents the weather-folk.
The dollar in decline is the storm offshore.
And the impacts of that storm are the “you probably want to start preparing now.”
Just know that there is protection to be had. We can beat this bugbear with the right portfolio.
I’ll be showing you how in my upcoming Workshop. Just click here now to grab a free ticket.
