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Webinar protecting your income and assets from rising inflation david campbell and mike piromgraipakd

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  • 1. Surfing the inflation tsunamiIt’s coming! Will you run, hide or learn to surf?
  • 2. David Campbell Former high school band director Self-made multi-millionaire Professional investor Real estate developer Real estate broker Real estate & business advisor Financial mentorOver $500 million of real estate experience Houses, condo-conversion, multi-family, winery, Resort, office, retail, California, Texas, North Carolina, Mexico, and Belize
  • 3. Husband Father MusicianRegular guy
  • 4. Tonight’s AgendaWhat is Inflation and Quantitative Easing?Who is responsible for Inflation?Who benefits and who loses from Inflation?How do you and your family protect andmaybe profit from Inflation?
  • 5. There ain’t no such thing as a free lunch!• David Campbell owns a real estate development company and works extensively with investors.• Mike Piromgraipakd sells gold
  • 6. What is NOTon Tonight’s Agenda Nothing for sale No MLM No close
  • 7. no investorleft behind
  • 8. Fiat Currency
  • 9. What is Inflation and Quantitative Easing? Inflation is an increase in price as a result of the increase in the supply of currency and/ or the increase in the velocity of money. Quantitative easing is an increase in the supply of currency while attempting to keep prices low by reducing velocity.
  • 10. Inflation is NOT increased demand
  • 11. Inflation is NOT scarcity of goodsINCREASED LIFESTYLE = INCREASED CONSUMPTION
  • 12. INFLATION FROM PRINTING
  • 13. INFLATION FROM: VELOCITY OF MONEY TOTAL CURRENCY:$200
  • 14. Velocity of money BUYS: SELLS:$100 COWS $100 COWS SELLS: TOTAL EXCHANGE: BUYS:$100 CORN $400 $100 CORN BUYS: SELLS:$100 COWS $100 COWS SELLS: BUYS:$100 CORN $100 CORN
  • 15. Who is responsible for Inflation?
  • 16. DebtInflation is an Economic “Solution” forO v e r s t r e t c h e d Governments
  • 17. $13.6 Trillion
  • 18. 201 US GDP IS $14.66 TRILLION (CIA FACT BOOK)
  • 19. THE PRESIDENTS AMERICAN RECOVERY AND REINVESTMENT PLAN ly ! years. p p Doubling the production of alternative energy in the next three s u e y Modernizing more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving n consumers and taxpayers billions on our energy bills. o e m Making the immediate investments necessary to ensure that within five years, all of America’s medical records are computerized. a s re Equipping tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and In c libraries. #1 Expanding broadband across America, so that a small business in a rural town can connect and compete with their counterparts ob anywhere in the world.J Investing in the science, research, and technology that will lead to new medical breakthroughs, new discoveries, and entire new industries.
  • 20. WHAT HAS INFLATION BEEN DOING IN THE UNITED STATES OVER 100 YEARS? WWI WWII VIETNAM IRAQ
  • 21. Where is current velocity?
  • 22. What will happen to velocity/inflation when consumer sentiment returns?
  • 23. What is happening to money supply?
  • 24. US vs China money supply 2008-2010
  • 25. 2008 INFLATIONAROUND THE WORLD 2009
  • 26. FEBRUARY 21, 2009South Carolina Governor, Mark Sanford, thehead of the Republican GovernorsAssociation... fears that excessivegovernment borrowing to fund the stimuluscould lead to an inflationary spiral to rivalWeimar Germanys.
  • 27. John Hathaway, Portfolio Manager and Senior Managing Director the Tocqueville Funds “The unstated objective of governmenteconomic stimulus would seem to be currencydevaluation. Success will be defined as inflationthat alleviates debt burdens to a degreesufficient to rekindle the appetite for risk in theprivate sector. Since nobody knows in advancehow much inflation is required, it is more thanlikely that policy makers will overshoot theirobjective. The results could well be ofWeimar proportions.”
  • 28. N1923 TIO NI NF LA HIT O FI MA NY RA T E GE R ON THTHE R IMA 0% PER M WE 0 DAYS ,25 0,0 WO 3 00 YT EV ER BL ED SD OUPR ICE
  • 29. Who benefits and who loses from Inflation?
  • 30. Who benefits from inflation? Borrowers Trade Deficit Governments Deficit Spending Governments Liberal Governments Arbitrage Lenders - Institutional Banks
  • 31. Government advantages to inflationhidden form of taxation100% tax on interest income OR inflation?!?!?reduces real cost of government’s debtcreates short term / misguided feeling of prosperitygives government unlimited discretionary spending
  • 32. Government disadvantages to deflationincreases real cost of government’s debtif it will cheaper to buy next month, no one will buygovernment spending power is limitedratio of government debt to GDP goes upprohibitively
  • 33. ACTUAL INTEREST RATE - INFLATION RATETRUE COST OF BORROWING
  • 34. INTEREST RATE FOR 5% BORROWERS-10% - INFLATION RATE-5% TRUE COST OF BORROWINGBORROWING TO MAKE A PROFIT ?!?!?!?
  • 35. Who Loses from Inflation?SaversWorkersIncome Tax Avoiders
  • 36. Consumer Price Index is a BIG LIE 3% CPI (inflation)??
  • 37. How do you and your family protect and maybe profit from Inflation?
  • 38. THE EFFECTS OF INFLATION ON SAVINGS AND INVESTMENTSACTUAL EARNINGS RATE - INFLATION RATE TRUE EARNINGS RATE
  • 39. 0.60%HOW IS THAT RISK FREE? ACTUAL EARNINGS RATE 0.6% EARNINGS - INFLATION RATE - 3% INFLATION TRUE EARNINGS RATE 2.40% LOSS!!!
  • 40. Inflation: a foe to savers
  • 41. Inflation: a foe to slow investors
  • 42. leveraged AFTER 1 AFTER 20 TODAY? investment YEAR? YEARS? Interest only $100,000 $100,000 $100,000 loanInflation at 3% Hammers 16,667 16,181 9,505 needed to hammers hammers hammers repay debt
  • 43. With an inflation forecastof 10% inflation how can your investments out pace inflation?
  • 44. value - mortgage = equity 500000 375000equity growth 250000 appreciation equity 125000 mortgage 0 YEAR 20092010201120122013201420152016201720182019202020212022202320242025202620272028202920302031203220332034203520362037203820392040204120422043204420452046204720482049
  • 45. inflation adjusted cash flow$4,000 Income & Adjustable Expenses Increase$3,000 Debt Expense Stays Constant Net Cash Flow Increases$2,000$1,000 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 adjusted gross mortgage expense variable expenses monthly net income
  • 46. What if you took RATES ARE LOW BECAUSE OF SUBSIDIES NOT BECAUSE OF MARKET CONDITIONSout a 30 year fixedmortgage in 2009? FORECAST FOR INFLATION IS VERY HIGH RATE OF INFLATION
  • 47. Arbitrage into Cash Flow Vehicles Borrow at 5-9% to invest at 6-12%+ Strong Cash Flow Vehicles Deeds of Trust (notes) Mortgage Pools / Group Investments• $100,000 borrowed at 6% = $500 I/O• $100,000 invested at 12% = $1,000 Net Monthly Income = $500 (PROFIT)
  • 48. GoldBonds / Treasuries Stock Market Real Estate Businesses
  • 49. Questions & Answers www.HasslefreeCashflowInvesting.comDavid@HasslefreeCashflowInvesting.com
  • 50. disclaimersNOT AN OFFER TO SELL SECURITIES: This is neither an offer to sell nor an offerto buy, sell, or securitize securities.CONFIDENTIAL: The information contained in this presentation is a confidentialcommunication for the intended recipient. If you are not the intended recipient, youare notified that any review, use, dissemination, distribution or copying of thispresentation is strictly prohibited. This presentation and its educational content arethe property of Fourth Dimension Real Estate, Inc. All rights reserved.CONSULT A PROFESSIONAL: The information contained in this presentationshould not be deemed as personalized investment advice. Although the educationalmaterials herein address general investment concepts, they are not intended toreplace qualified real estate, legal and/or tax advice. This investment is not suitablefor all investors. Prospective investors are encouraged to review any investmentdecision with qualified investment, legal and/or tax advisors.
  • 51. disclaimersNO GUARANTEE OF ACCURACY: While reasonable efforts have been made toinclude accurate information in this presentation, errors or omissions will occur. Noguarantee is expressed or implied regarding the accuracy of any informationcontained herein, including but not limited to statements regarding financialperformance, valuations, actual or potential income, business strategy, legal effect,availability or suitability of financing strategies, and plans and objectives of futureoperations. All information in this presentation is provided "as is" and is subject tochange without prior notice. Prospective investors are responsible for evaluating theaccuracy, completeness or usefulness of any information or content available in thispresentation. The Presenter and its affiliates expressly disclaim any liability, whetherin contract, tort, strict liability or otherwise, for any direct, indirect, incidental,consequential, punitive or special damages arising out of or in any way connectedwith your access to or use of this presentation, and/or any other informationprovided by Presenter or its affiliates.
  • 52. disclaimersFORWARD LOOKING STATEMENTS: The Presenter, its related companies, thiswritten presentation, and its related documents contain forward-looking statementsand information related to future events. These statements may be identified bywords such as “expects,” “looks forward to,” “anticipates,” “intends,” “plans,”“believes,” “seeks,” “estimates,” “will,” “project”, “forecasted” or words of similarmeaning. Such statements are based on assumptions that contain a high degree ofsubjectivity and are, therefore, subject to certain risks and uncertainties. Changesin general economic and business conditions, developments in the financialmarkets, including fluctuations in interest rates, inflation or deflation rates, and manyother unforeseen risk factors will cause your actual investment results to varymaterially from these forward-looking statements as expected, anticipated, intended,planned, believed, sought, estimated or projected. Presenter does not intend orassume any obligation to update or revise these forward-looking statements in lightof developments which differ from those anticipated.