Joe Withrow, Author at Zenconomics

Shedding the “piecemeal” mindset when it comes to money…

The sad truth is that in the new millennium, government-funded school systems are simply not teaching children about the real world of money.

That’s Steve Forbes, Editor-in-Chief of Forbes magazine. Forbes points out that the public school systems teach nothing about personal finance. Thus, we’re left to figure it all out for ourselves.

But here’s the thing – ever since the 1980s there’s been a concerted effort to push what I call a “piecemeal” approach to money and investing. It’s the idea that we should always be chasing that hot stock or exchange traded fund (ETF) that’s set to soar in value.

Therefore, we tend to think about growing our money in a piecemeal manner. You know what I mean here?

We tend to make investments in a vacuum. We hear about one idea… and we follow it. Then we hear about another idea… and we follow it too.

Of course, there are all kinds of television shows and movies that glorify this model. Jim Cramer’s Mad Money… Shark Tank… all the movies about Wall Street – they each feature the piecemeal mindset.

The problem is, no single investment is likely to move the needle for us. And if we’re not rooted in a foundational system, we’re likely to buy and sell things on a whim… always looking for the next big thing.

This isn’t a winning approach. I learned that the hard way.

How to turn $500 into $50,000 by becoming the bank…

We’ve been talking about consistency this week. About developing small habits that lead to big results.

For me, one of those habits is to add $100 worth of new notes to my crowdlending portfolio every Monday morning. This doesn’t have much impact on my finances at first… but over time it becomes quite meaningful.

Now, crowdlending is an alternative to traditional bank financing. It allows investors to become the bank and lend money to borrowers for a specific purpose. Debt consolidation, home improvement, and medical expenses are three of the most common purposes.

This is done through a crowdlending platform.

Borrowers apply for the loan and provide their financial information. Then the platform pulls their credit report and assigns the loan a specific risk rating. This is what determines the interest rate.

From there the loan is added to the platform’s investor portal. This allows investors to browse the listings and choose which loans they want to contribute to. And in return, they receive monthly principal and interest payments… just like a bank.

What I love about this approach is that, if we’re consistently growing our loan portfolio, our passive income snowballs in a big way. Let’s illustrate this with a few examples.

Suppose we start with $500 and begin building our crowdlending portfolio. And let’s say we follow the rules of success and kick in an extra $100 every week.

If we assume a 9.2% return on the portfolio, which is what I’ve experienced, we’ll have a nest egg of $25,923 in four years’ time. Not too shabby.

Now let’s say we start with the same $500, and then we kick in $200 more every week.

Two habits, two goals…

Yesterday we talked about two simple habits to break out financially. The first is routinely buying Bitcoin – regardless of what the price happens to be. The second is adding new notes to a crowdlending portfolio each week.

We’re piggybacking on an old world success principle here. That is to do small things consistently that will eventually add up to big things.

This is something business guru Jim Rohn talked about frequently. And this is what Darren Hardy’s book The Compound Effect is all about.

The fact is, good habits accumulate over time – so long as we have a clear and definite purpose behind them.

So today let’s talk about our driving purpose for consistently buying Bitcoin and building a crowdlending portfolio.

Now, I don’t mean to suggest that these two asset classes should make up our entire financial picture. Not at all.

But they are the two assets that we can be mechanical about. Largely because the dollar amount we commit to our routine purchases doesn’t matter much. It can be as little as $25.

Two Things To Do Every Monday to Break Out Financially…

Success is neither magical nor mysterious. Success is the natural consequence of consistently applying the basic fundamentals… Motivation is what gets you started. Habit is what keeps you going.

That’s Jim Rohn writing about success.

Rohn left this world back in 2009. But in his time he was considered a leading authority on personal development and business success. His books and programs reached millions of people around the world.

As Rohn so eloquently points out, success doesn’t come from luck. It comes from consistency.

To be successful in any endeavor, one needs to first develop the good habits that will bring success about… And then stick with those habits day after day after day.

And here’s the thing – those habits don’t need to be major undertakings. In fact, they shouldn’t be. Instead, success habits should be small and hardly noticeable.

That’s because it’s very easy to stick with habits that are simple. And there’s a cumulative effect that goes unseen when we apply good habits consistently.

This is the secret of success. It comes from doing little things over and over again.

To that end, I do two little things every Monday morning to improve my financial situation.

Truth and Community

Asha is the path of righteousness, the straight path, the path that is true. Druj is the path of falsehood, the crooked path, the path that is false.

Choose the path of asha, for it leads to happiness and joy. Avoid the path of druj, for it leads to suffering and pain.

This is a quote attributed to Zoroaster. He was the founder of the ancient religion Zoroastrianism.

Zoroaster taught that life was a battle between truth and falsehood. He called truth “asha”. And his term for falsehood was “druj”.

To Zoroaster, the purpose of life was to seek asha and defend it against druj. I’d say that’s a good philosophy.

I only know this because I was researching the origins of the Russian oil trade this week. That’s something I’m writing about in our April newsletter for The Phoenician League.

In 1876 a wealthy Russian industrialist discovered acres upon acres of untapped oil fields in and around the ancient city of Baku. It’s located right on the Caspian Sea in the modern country of Azerbaijan – just south of the Russian border.

It turns out that Baku was once a major outpost of Zoroastrianism. Marco Polo wrote about it in his famous 13^th century book The Travels of Marco Polo.

The Forgotten History of American Mutualism

Americans of all ages, all conditions, all minds constantly unite. Not only do they have commercial and industrial associations in which all take part, but they also have a thousand other kinds: religious, moral, grave, futile, very general and very particular, immense and very small.

Americans use associations to give entertainment, to found seminaries, to build inns, to raise churches, to distribute books, to send missionaries to the antipodes. In this manner they create hospitals, prisons, schools.

Finally, if it is a question of bringing to light a truth or developing a sentiment with the support of a great example, they associate. Everywhere that, at the head of a new undertaking, you see the government in France, or a man of rank in England, in the United States you will be sure to find an association.

That’s French ambassador Alexis de Tocqueville writing in the 1830s.

The French government commissioned de Tocqueville to travel to the United States. His job was to study American society and politics. And what he found amazed him.

That is, Americans worked together to manage society and take on important projects. This was done through private associations. And everything was self-funded.

Nobody was forced to do any of the things de Tocqueville mentioned. And the government levied no taxes to fund these projects.

Instead, those who found the projects useful and necessary came together to complete them. Everything centered around community at the local level.

What’s more, many of these associations also served as “safety nets” for people.

Why I changed my tune on America…

We talked yesterday about the manufactured America is going to the dogs narrative.

There seems to be an agenda in motion to convince us that everything is falling apart in this country. There was a time when I believed this. But not anymore…

My own observations suggest otherwise. We’re seeing a resurgence of self-reliance and self-responsibility in America once again.

I see homeschooling as a great indicator of this.

Not too long ago people considered homeschooling to be weird. Many looked down upon it.

Today it’s estimated that ten or eleven percent of American households with children are now homeschooling. Talk about a turn-around.

The Covid hysteria served as the catalyst for this rapid shift.

The Plot Against American Reality

The man who never looks into a newspaper is better informed than he who reads them; inasmuch as he who knows nothing is nearer to truth than he whose mind is filled with falsehoods & errors.

That’s Thomas Jefferson writing about the primary news media of his day – newspapers.

Many of us today see the news media as biased and sensationalist. We tend to blame the 24-hour news cycle and social media for this… but Jefferson’s writing shows that it’s a timeless issue.

I bring this up today because something of an insight occurred to me over the weekend.

It came to me as my wife and I were out to our monthly dinner. I’m walking down Main Street of this historic town nearby, and a thought came to me. Everything is mostly normal.

Then I had to stop and think… why does such a thought strike me as insightful? Shouldn’t I expect things to be normal?

That’s when it hit me – there’s been a concerted effort to convince us that America is going to the dogs.

I suspect this agenda has been in play for quite a while now. But it certainly ramped up in 2020.

Shifting Our Focus to Monthly Passive Income

Investors are always looking for new ways to generate a return on their money.

But as we discussed yesterday, those who have fixated on the stock market haven’t fared too well over the last fifteen months. That’s why we’ve been talking about an alternative investment strategy all week.

We call it the Income Snowball Strategy. It’s all about creating passive income outside of the stock market.

The beauty of this strategy is that there’s no barrier to entry.

It’s not like real estate investing where we have to come up with large down payments for every property we want to buy. Instead, investors can get started with just $25. That’s it.

Generating Easy Passive Income Outside the Market

What on Earth am I going to do now? It will take forever to regain what I lost…

Alex had been investing heavily in the stock market since the COVID-19 hysteria hit several years ago. He found himself working remotely for the first time… and suddenly he had extra time on his hands.

Like many, Alex began tracking the stock market daily. And he stumbled upon a few Reddit threads full of investors and “day traders”. Making stock picks became a game that the group talked about daily.

Pretty soon Alex began pouring a significant portion of his paychecks into his brokerage account to make new investments.

And for nearly two years he felt like a genius. He watched his investment account grow substantially as the market soared.

But then the market started to fall in January 2022… and it seemingly went down every day. Alex watched in horror as his account began a steep decline.

He thought about selling off some of his stocks to cut his losses. But then everybody in his Reddit groups kept saying the market would rebound as soon as the “Fed pivot” happened.