Prosperity Guidelines

Problems, threats and looming disasters have a lot of truth to them, but are seldom absolute or certain. Investors are too often over-powered by fear, typically resorting to poor or weak investing action and strategy. Weak investment strategy adds more exposure and vulnerability.

A weather report for North America would not be very useful when you’re living in Metro Vancouver. Neither are macro reports on economies or real estate. While they do have some value, context and specifics matters a lot, especially when you invest in real estate.

While cash and income is important, they are often excessively pursued. An excessive pursuit leads to a systemic weakening of your portfolio. Income investments are unlikely to sufficiently strengthen your portfolio against inevitable setbacks of life. They do not protect against the rapidly increasing cost of living. These costs are not well represented in official inflation reports.
It is easier to create income with wealth than it is to create wealth with income.

Money loses value faster than we realize, mainly due to monetary policies and inflation. Inflation’s devastating effects are generally under-reported. It is difficult to anticipate long term future inflation, other than reverting to simple averages. Inflation is cyclical and uneven.
96% of high net worth individuals underestimate how much money they need for a comfortable retirement

Just because you can do something doesn’t mean you should.
Investors often conflate a lucky outcome with a smart strategy. Saying “I made a massive return on this investment” without context is like saying, “I stood on a highway with my eyes closed for a minute and didn’t get hit.” The survival doesn’t change the danger.
Risk-taking isn’t inherently wrong—provided you accurately measure and accept the consequences. However, true risk assessment is difficult, particularly in operationally complex businesses where operators frequently lose their objectivity. Think of base jumping: a jumper can be an expert in safety gear and mitigation, but their expertise never removes the fundamental, lethal risk of the jump itself.
Unfortunately, most investors rely blindly on the person selling the investment to define that risk. When faced with complex markets they don’t understand, they over-diversify, which ultimately dilutes their returns.
While others gamble a tiny percentage of their portfolios on these high-risk plays, we don’t play that game.
We are strictly risk-averse. By strategically removing fundamental risk from the equation, we create the clarity needed to confidently deploy much larger amounts of capital safely.

Overconfidence and a herd mentality are some of the biggest drivers that lead to poor decision-making. When new reports suggest growth in a market, quick money rushes in. It appears as if everybody is going to win. Many do, but cycles are certain to return. Without resilient underlying value the risk of disruption can be painful.

Diversification that are wild and with a shallow understanding will destroy returns. Diversification makes sense when done thoughtfully, and is best practiced after specialization.

Investors often have strategic blindspots. Some examples include:

Short-view over long-view. Being overly focused on the short-term outcome can harm long-term financial strength.

Quality Of Life Sacrificed. Investing, even when passive, often demands far more time and stress than anticipated. Not all hours are equal. Stressful time is much more expensive than peaceful time.

The rule of thumb says “low risk = low returns, and high risk = high returns”.
Can this rule be broken? We believe this rule can be broken with principles of specialization and strength creation.
Our aggressive risk reduction strategy coupled with growing slow certain strength produces high investment value.

Speculative money is moving faster than ever before. This creates quick over-valuations and raises overall risk. It is especially true for liquid investments like stocks or short-term strategies that lack strong fundamentals.
There are certain opportunities in times of fear and chaos, but how can these opportunities be identified and pursued? Just because you can get a steep discount does not mean you should take it. Many investors have purchased highly discounted assets only to realize a potential crushing financial burden many years later.

How do we approach emotional markets, sometimes being in the extremes of fear & greed. Cognitive biases like confirmation bias, herd mentality, and loss aversion can distort investment judgments.

The sheer volume of information can be overwhelming. With AI we have quicker volumes of impressive information available. However, more information can easily increase confusion or fear, and reduce our ability to make sound decisions. Media loves attention and emotions, always competing to draw us in.

The wisdom is to reduce investment risk by investing in what you thoroughly comprehend. It may be a tall order in most cases.