The second video of Wright's that I watched dealt with how to profit off of the coming ups and downs of various financial cycles over the next few years. He starts off with a discussion of boom and bust cycles. He makes the point that it is significantly easier to find financial independence during a bust period. 10 times easier, he claims. We are in a buildup period - the longest economic expansion in us history. These usually only last 4 to 7 years, but this one has been a decade long. A crash period, which is inevitably coming, usually lasts around 2 years. ( I have not verified this, just reporting!)
US Economic Expansion Periods (does not take into account 2019).
People often look to a certain target of savings before they can feel financially independent, but Wright argues that the only real way to achieve stability and independence is to maintain a passive income that provides annual returns. Rather than just a set amount in savings that could be wiped out by a variety of economic factors.
He describes the example of two investors that he knew of. First was a real estate developer in 2004 who did all the work to build some luxury condos. WHen the crash came, he lost the project, and in 2009, the second guy came in and bought the place for a steal. 25 million vs 7 million, 5 years later. The second guy (having done none of the work) is 10x better off in terms of his investment and returns. The same amount of financial freedom cost guy #1 800k in 2004, while it only cost guy #2 90k. This is due to the timing of the investment with the cycle.
