From The Desk of Peter Grandich

'Hold that thought... it's my financial planner.'

“For the righteous falls seven times and rises again, but the wicked stumble in times of calamity.”   Proverbs 24:16

 

If 31+ years in and around the financial arena taught me anything, it’s that right about now, a lot of investors have serious anxiety. Sadly, many of them have been led by financial advisors who practice a failed process that usually benefits them far greater in the end than their clientele. Call it Catholic guilt, but after being a part of that failed process, my Lord & Savior allowed me to sink to a level of such personal unworthiness, that I finally was able to remove much of my sinful nature from my mind and begin to practice a life He gave us to live in the only truly worthy financial book to read – the Holy Bible.

While many who wouldn’t give me the time of day just a few weeks ago (I had been stating to close friends that dispensing brutality honest advice on matters on finance was discarded by most), this moment in time will likely at least provide me an audience with some now. Here too, most of those who do lend an ear shall not like what I have to say. But as I’ve stated for a very long time, when it comes to financial advisors, there are only two types:

  • Those who say what they think
  • Those who say what they think you want to hear and it sells

Being a long-standing member of the former, I can tell you it’s far less income rewarding, but at least doesn’t add to the already long list I have to answer to when I stand naked and alone with my Maker.

Okay! Let’s now try to make the old saying of “Adversity Creates Opportunity” to those who have yet to conclude the following points as “Gospel-like” and remain in the clutches of the “Don’t Worry, Be Happy” crowd that litter the financial services industry:

  • Traditional financial planning is a badly flawed process and can’t achieve most financial goals.
  • A “Don’t Worry, Be Happy” crowd that always says buy, buy, buy exists throughout the financial services industry and shall never change their ways. You could literally toss them off the top of the Empire State Building and all the way down they shall say the same thing – so far so good!
  • The Archangel Gabriel could show up at most Heads of Investment Strategy personnel for most firms, tell that person that Almighty God is telling them the stock market is going to crash; And even if they believe the Archangel Gabriel, their firm will never allowed them to tell their clients
  • Most financial markets are regularly manipulated and very much tilted against most individuals. Throwing sand at the ocean has a better chance to stop waves than anyone who thinks they can play regularly in financial markets and come out on top.
  • Finally, if none of the points up to now stopped you from proceeding forward with me, this does for most – no one knows the future except the Creator of all that is good in the Universe. Neither I, you nor that person claiming to you that they can regularly predict market movements, can actually do it on a consistent and winning basis.

Assuming you’re among the handful who agree with my points and finally want to put matters of finance in your life into a proper and Godly perspective, let’s spend a little time discussing how we got here and what with God’s guidance, can get us through this bump in life’s road.

Before we touch on the economic, social and political factors that led us to here, it’s very important to remind ourselves of the nucleus of what now makes up on we approach matters of finance:

  • Traditional financial planning, no matter how yours has been packaged, tries to predict the performance of the four most critical factors:

1-Interest Rates

2-Inflation Rates

3-Tax Rates

4-Rates of Return

Whether it’s some clown screaming “booyah” on TV or a very well-dressed man with a fancy firm name, no one, I repeat no one, can accurately predict the movement of these four factors. This in turn, shall cause the plan to fall off course and make its goals a near impossibility to reach. But if you read that legal jumbo-mambo at the end of the plan known as the disclaimer, you could’ve save yourself a lot of pain and anguish.

The key to a successful financial plan is to understand its “cash-flow”, not “net worth”, that’s key and two cash flow factors shall be all the difference in success or failure. They are:

1-LOC – Lost Opportunity Costs

2-VOM – Velocity of Money

 

  • A typical Realtor will tell you it’s always a good time to buy real estate. A typical financial advisor always has products he or she thinks you should buy. Unfortunately, many times doing nothing is most prudent; but sales people don’t make money on doing nothing – and that’s what realtor’s and advisors are for the most part (my financial mentor and the man if I had completely listened to years ago instead of just recently, I would be far better off financially, Mr. Frank Congilose, has just released his third book that covers a lot of this).
  • Finally, besides traditional financial planning being a badly flawed process, the other critical reason most investors will come out on the short end of the stick, is the fact of how badly most markets are manipulated.
    Google “markets manipulation” and you will see a long list of stories describing illegal actions; but two stand out to me and are all the proof one needs to see how badly the odds are stacked against them:

1 – In the simplest terms, the “last” financial crisis (not the one unfolding now) was caused by mortgages being sold by financial institutions who knowingly not only knew the chances of the borrower repaying in full was slim and none, but actually bet against them by shorting the very product they sold them
Now because the public-at-large couldn’t grasp what truly happened, I’ve put it into terms they can.
Imagine tonight you heard on the news that the major car companies not only built millions of cars they knowingly knew were faulty and going to crash, but also bought life insurance on the people they sold them to so they could collect when they died driving their faulty automobiles. The world would want to hang them.

But other than some fines and a few low-hanging management personnel, those financial firms were untouched (despite making hundreds of billions of dollars) and are at the center of leading many investors into the pain and anguish now underway yet again!

2 – More recently, we learned that hundreds of millions of dollars were spent by financial institutions to lay fiber-optics so they could “front-run” known orders and without any risk, profits hundreds of millions of dollars each day. Again, because the public doesn’t understand what was described, I put it in terms they may.

It’s like someone saw your grocery list, knew you were on the way to the store to buy, got there ahead of you, bought your entire shopping list, than put it back on the shelf a few pennies higher price and made the difference. How would you feel knowing this happens each time you and your fellow citizens go shopping?

There’s a lot more to getting oneself properly positioned to handle matters of finance in a prudent and Godly way, but for now, I shall move onto the economic, social and political factors that got us to where we stand today.

While many factors made up why I felt it was better to be a live chicken versus a dead duck (and as a chicken to get into a foxhole before this worldwide financial market fallout), one overall theme has guided me and shall do so, even after the dust clears for a period and the “Don’t Worry, Be Happy’ crowd claim the “all-clear” and rehash old products and create now ones to do what they do best – sell, sell, sell – America has been robbing Peter to pay Paul but Peter is tapped out!

 I couldn’t write and speak about it enough. Here in the U.S., and in many countries around the world, governments and its people were enslaving themselves to what the author of the greatest book ever written – The Holy Bible, warned us over and over again to avoid at all costs – DEBT!

How many times did I say history has never showed issuing more debt solved any debt crisis.

I’ve often said that our parents use to ask “can we afford it”, but now our children and grandchildren asked can they make the payments?

How often did I try to drive home that China, not the U.S., was the engine that pulled the world economies around and it was no longer able to run at above average speed.

Despite numerous other fundamental and technical factors warning of a major fall for many financial markets, I stated in my 31+ years, I never seen such complacency among investors and especially the so-called “professional” community. They will of course do what all salesman would do in this situation – say all is well!

Because I’ve personally made and lost millions more than once, I not only speak from real experience, but also chose to believe Jesus Christ is Lord and his manual for life is the Holy Bible. That in itself, causes many who may have chosen to consider becoming a client of mine, not to; but since I already knew they killed the first 11 of 12 who decided to follow him, playing in his ballpark has no luxury boxes. But the good news is you get an eternal extra inning game to give Him thanks and praise for the seats you once thought weren’t great and wish you were in the luxury boxes.

I am by no means, claiming I have an open line to the Almighty One and if you just send me seed money, your own seeds will grow. No, what I am saying is, not only do I not conform to the ways of the secular financial services industry, I take comfort despite my financial mistakes this too shall pass and one day sooner than I think even now, this shall be truly meaningless.

Knowing the worse decisions are made at heighten emotion times, I think we let what’s underway today do its thing but decide if we want to keep handling ones finances the way they are now, or make today the first day of the rest of our lives and maybe be willing to hear more of what I believe is the only realistic way to approach matters of finance. The choice is strictly yours.

You can watch all the secular financial shows despite neither they nor us truly know what the future brings and only add to your anxiety; or maybe pray to God for guidance.

And if you don’t believe in God, are angry at God for what you believe are valid reasons, know not all of the world is evil and no one really cares. I may not have at one time, but I know God loves you and so do I – despite being a horrible sinner saved by Grace.

I will be back through the week to look at the markets.

God Bless,

Peter

“Fear is the glue that keeps you stuck. Faith is the solvent that sets you free.”
                                                                            Shannon Alder