NOTE: This is a long post, so you can either read or watch the video, below.
John here, coming to you from our secret bunker, somewhere in the Hill Country of Texas.
Welcome to the new world folks. We just had full lockdown here in Texas, and I believe you’ve now had the same, over the other side of the pond in the UK.
Not that much has changed practically for us to be honest, as I work from home, and we have two screaming kids under the age of 2, so that’s what we deal with everyday anyway! It’s quiet now cos they’re asleep but don’t be surprised if that changes...
I don’t think I’ve ever gone live on my timeline before, because I’m a bit of a social hermit at the best of times. But with what’s going on at the moment, I do feel compelled to do this.
For those that don’t know me so well, I invest in property in the UK, and I teach property investing and online business.
And in this live, I’m going to cover a few things: effects of this lockdown on business, on the self employed, on property investment, my thoughts on what’s coming next, and also some spiritual stuff.
Some of what I’ll cover you’re not likely to hear anywhere else by the way, and some of it may even offend some people.
Now, there’s no doubt that there’s a serious health problem that needs to be dealt with -- my sister is a GP on the front lines in Scotland -- but I think that there’s a kind of hysteria that’s being created by the media that is not healthy.
We know that decisions based on emotion are generally unreliable, and when we retreat into fear, that’s what happens. Instead, we need to stand up and lead. Lead our families, our businesses, and our communities through this.
So yes, everyone’s health must come first so that we can beat this, but my heart can’t help breaking for all the businesses that are being affected and people that are literally losing their jobs as a result.
Obviously, anyone heading for financial hardship needs to look at taking advantage of the assistance that is available from their lender in the form of mortgage holidays, and any other government help as it becomes available.
And a quick disclaimer -- of course none of what I’m going to talk about is financial advice, I am not regulated in any way...
But those starting to feel the pinch may also want to look at the credit cards that you have available. Now I wouldn’t normally recommend that anyone takes on this type of debt, but a strategy you could consider is to start spending on your credit cards where possible, instead of spending the cash that you have.
That way, if your card company decides to change your credit limit for whatever reason, which can happen, then you’re safe because you’ve already borrowed the money.
This money will buy you time and this time will allow you to make better decisions, untainted by emotion, or fear. Be logical though and don’t throw good money after bad, and be aware of any biases -- either positive or negative -- that you may have about the possible outcome of this situation, that will affect your judgement.
If you have an offline business, now is the perfect time to move yourself online.
I’m sure that you’ve already thought of ways that you can provide your service remotely, over Skype or Zoom, and if you’re not able to perform the service that you do remotely (or even if you can but you want to scale), then creating a digital course is the perfect way to do that.
And with everyone at home, people are looking for things to occupy their time, and online learning is going to be big during this time of isolation.
I teach a free workshop on how to do that at digitalcourseformula.com and I’d like to invite you to take that with my compliments. What I teach is applicable no matter where you are in the world.
I’ve been running my businesses in the UK from the USA for over three years now, so I know a bit about doing business remotely online. So if I can help anyone with advice on any aspect of going online, then I’m here for you, just drop me a message.
In terms of property investing, there are certainly ways for this to carry on in the current climate, although I am seeing things start to grind to a halt, especially where sale/purchase transactions are concerned. I heard yesterday that Registers of Scotland (the people who handle property titles) have shut down, so that basically makes buying or selling an impossibility. That is likely to happen in England too, if it hasn’t already.
There are going to be huge opportunities on the other side of this for investors -- whether new or experienced -- who refuse to curl up and retreat in fear. And now is the time to get prepared and educated for that. Stay tuned to the end by the way because I have something special to help with that.
People still do and will need solutions, and if property grinds to a halt for a while, there is going to be an explosion of activity on the other side. I’ll be holding a special training for my subscribers at Property Investment Blueprint very soon, and you can be sure you get access to that by joining my free UK property course at freepropertytraining.co.uk.
I think that with what we’re starting to see, with people losing their jobs, is that we can’t rely on the system anymore, and when the crash comes, believe me, you won’t be able to rely on the government either.
So, if you’ve been sitting on the fence thinking I need to start my own business or I need to get into property investing, then NOW is the time to do it.
Historically, some of the biggest and most successful companies were started during times of hardship: General Electric, IBM, FedEx, Microsoft and many more were all started during recessions.
Uber, AirBnB, Pinterest, Whatsapp and others were born out of the last recession.
And I’m not necessarily a fan of this guy, but legendary investor Warren Buffet famously once said of investing something along the lines of: "Be fearful when others are greedy and be greedy when others are fearful". Do you think people might be a bit fearful right now? I think that a similar principle applies to business in general. But I’d probably reword it slightly and replace “greedy” with “courageous”.
So, what’s coming next?
Well, whilst I am optimistic about business and investment opportunities during this time, for those who are willing to adapt and not be fearful...
I’m not as optimistic about the economy at large.
Some out there seem to think that when this blows over, we’ll be back to business as usual.
But I have been expecting an economic collapse for years now, and honestly we were on borrowed time already: the policies of infinite quantitative easing, pumping billions into the economy every day essentially had the system on artificial life support. It was always only going to take one event to bring the whole house of cards tumbling down.
I don’t think anyone ever expected it would be this kind of event that would be the catalyst, but here it is, and the strain that the loss of jobs and government stimulus is going to have, I believe will bring it down.
Again, they may be able to keep it afloat artificially for months, even a year, but it’s coming down, and it’s not going to be pretty.
A few shelves empty of toilet paper and so on now, is going to be nothing to what I believe is coming.
American economist Peter Schiff, who predicted the 2008 financial crisis, has predicted that the next one will be much worse because it will be inflationary, as in: consumer prices will be going up as the economy goes down.
I know some people will be worried about just keeping their jobs or businesses afloat just now, never mind safeguarding investments, but here’s what I suggest if you have some wealth that you want to preserve.
So, number one is be careful not to hold too much cash in the bank.
Why? Well, if you remember during the last crash, governments did “bail-outs”. Where they essentially took taxpayer money, and used it to bail out the “too big to fail” financial institutions and businesses.
In the time since the 2008 crash, something called “bail in” laws have been quietly brought in all over the world.
What these bail-in laws do is essentially turn you from being a customer of a bank into an unsecured creditor, and that means that if they get into financial difficulty, they can legally appropriate your funds -- or steal your money -- in order to stay afloat.
Most major banks are still pitifully capitalised, and that means that they hold very little cash and cash equivalents in proportion to the total of their customer deposits. Which makes them very vulnerable to the bank runs that will inevitably happen.
And we’ve already seen these bail-ins in action. In Cypress, during their banking crisis of 2012/13, depositors there lost a portion of their deposits over 100,000 Euros. Sounds a lot but I expect that during the coming crisis, that limit will be much lower.
But you’re probably thinking my government has a bank deposit guarantee scheme, I’ll be covered by that.
I wouldn’t be so sure.
For example, The Canadian Deposit Insurance Corporation (CDIC) promises to insure bank deposits up to $100,000.
But on closer examination, there’s about $646 billion of eligible deposits in the Canadian banking system, but the CDIC only has $2.8 billion in cash available to cover it all. Do you see a problem there? Those numbers were from a few years ago so could well be worse by now.
The UK, USA and other western countries are likely to be in a very similar position.
So, how can you prepare for this?
I’d recommend having enough non perishable food in the house to last at least a couple of weeks. There are other essentials that you may want to stock up on, but I’ll leave you to research that yourself if you feel led to. I know there is rationing on many items and even empty shelves at the moment, but I urge you to do what you can to build up some stocks all the same.
If you can, start a vegetable garden, or even get chickens if you have the space! There’s no harm in being a little more self-sufficient, I think we’ve become too dependent on big companies for our day to day living anyway. We need to try and reclaim some of the resilience that our forefathers had.
These provisions will allow you to have peace of mind about providing for your family, and also to be able to bless others, should times turn hard. And if they don’t then it’s hardly going to go to waste!
I’d also suggest having some physical cash on hand: at least enough to cover your expenses for a month. We saw runs on some banks during the last crash and I think they’ll be more widespread this time. That means you won’t be able to get money out of cash machines.
That said, cash is on the way out. There’s been an agenda towards removing cash for some time, and we’re going to see that continue. Don’t be surprised when you start seeing news stories about how the virus is being spread by bank notes, and that these will need to be taken out of the system.
Precious metals are a great hedge against fiat currency. Fiat just means currencies that aren’t backed by any kind of commodity like gold or whatever. Experts recommend holding about 10% of your wealth in precious metals like gold and silver, and remember, if you can’t touch it, you don’t own it!
But even that isn’t safe in theory, because in the Great Depression of the 1930’s, President Roosevelt basically seized all personal gold holdings via buybacks that gave people pennies on the dollar for what they were holding.
All that to say: don’t rely on the government. After all, didn’t Ronald Reagan say: “The most terrifying words in the English language are: I'm from the government and I'm here to help.”?
So, none of those recommendations are completely failsafe, and that brings me nicely on to the one thing that is.
Now, I know that this may offend some people, and it’s sad that if I’d dropped the F-bomb 10 times so far, most wouldn’t have minded, whereas talking about God seems to be pretty edgy these days, but I’m going to go there.
And I want to give people some encouragement from the Word of God. I’m going to read the very short Psalm 23, that might be familiar to some of you:
“1 The Lord is my shepherd, I lack nothing.
2 He makes me lie down in green pastures,
he leads me beside quiet waters,
3 he refreshes my soul.
He guides me along the right paths
for his name’s sake.
4 Even though I walk
through the darkest valley,
I will fear no evil,
for you are with me;
your rod and your staff,
they comfort me.
5 You prepare a table before me
in the presence of my enemies.
You anoint my head with oil;
my cup overflows.
6 Surely your goodness and love will follow me
all the days of my life,
and I will dwell in the house of the Lord
Pretty powerful huh? But let me ask you something: “Is the Lord your shepherd?”.
Because you can only really access the comfort that this Psalm promises if He is.
Don’t worry because if He’s not, that’s very easy to fix (and to claim the free gift of eternal life He offers, too).
How do you do that?
You simply turn from your wrongs and trust alone in Jesus Christ.
I hope that you’ll do that today, because you could get run over by a bus tomorrow, and the alternative doesn’t even bear thinking about.
The world is getting pretty crazy. All I’m saying is that if what we see next is: total financial collapse, a new fiery attack on New York, Trump taken out and Obama returned to power, world war, famine, natural disasters, and even more pestilence... then there’s a pretty good chance we’re living through the book of Revelation!
I’ll just leave it at that.
Anyway, if you’re still with me, you’re a trooper, thanks for listening.
Be safe out there, love each other, and don’t be fearful.
Check on your neighbours, be a leader.
And I’m here for you if you need me for anything at all, whether that’s questions on anything I’ve talked about today, or even prayer.
Thank you and God bless.