The Secret to True Wealth Investing

Right out of college, I was a broker for a year or two at a firm specializing in global stocks and bonds. One thing that struck me was that most of my clients were readers of investment newsletters... Mark Skousen’s, Adrian Day’s, and the Oxford Club, among others.

That firm also ran a small ($50 million) fund and, at 24 years old, I became vice president. Running a global mutual fund was my dream job at the time. Unfortunately, the company knew it... So it paid me a tiny annual salary of $23,500! It was a big pay cut.

But I would have been stupid not to take that job. The fund was small, so I wore every hat at times... research, trading, bookkeeping, SEC compliance, accounting, writing the quarterly reports... it was a great experience.

After a year, though, when they offered me a small raise to $27,000, I would have been stupid to stay... I’d started studying for a Ph.D. while working for the fund. Between tuition and rent, my net worth was shrinking every day.

So I quit. I distinctly remember going over to my girlfriend’s apartment complex and telling her what I’d just done. And then on the pool deck, I laid out a half dozen investment newsletters.

I told her, this is what I want to do. “I can do better than these, I think... ” I told her. “What do you mean, better?” she asked. I didn’t really know. “Can you make money doing this?” I didn’t really know. “Well, how do you get readers?” Once again, I didn’t really know. It wasn’t a thought-out plan... I just thought that I could help a lot of people do a lot better with their own money.

My former boss at the brokerage firm was kind enough to get in touch with Julia Guth of the Oxford Club newsletter for me. And in just a few weeks, I moved and was writing a newsletter. By 1998, two years later, I was writing the Oxford Club letter with 45,000 readers – a long way from the pool deck!

The dream had come true... I was helping investors. Even better, the girlfriend with the good questions by the pool became my wife. I’ll turn 36 next year, and we have two little kids, ages five and three. We are so thankful for how things have worked out.

In 2001, my childhood friend Porter Stansberry talked to me about starting my own letter, True Wealth... about writing whatever I wanted. He even offered a “blank check” travel and research budget. I couldn’t refuse that! But I knew that I would be a hard to sell to readers... they’ve always said I’m too conservative an investor for the newsletter business. Another thing that makes the sale hard is that I never buy what’s popular in the investment world.

Apparently, doing what’s unpopular works. Against great odds, we made it. True Wealth has become one of the largest investment newsletters in the country. For a conservative letter with no hot “hook,” that’s an achievement... but I’m just thankful to be doing what I love to do.

With this month being the fifth anniversary of my first True Wealth issue, I decided to kick off my presentation at last week’s Alliance Conference with my five best investment recommendations right now...

Out of fairness to my paid subscribers, I can’t mention my two newest (and most hated by the public) investment ideas. I can tell you, however, the three investments for the long run that I’ve recently mentioned in the pages of DailyWealth: Icelandic bonds, collectibles, and Japanese real estate.

I can’t possibly be an expert in all of these different things, of course. I do my best to find things that fit into our criteria, and then I find experts to help me uncover the best ideas.

For example, I don’t know how many trips I’ve made to Iceland in the last few years checking things out. It’s at least a half dozen. And I’ve met with the local brokerage firms and feel extremely comfortable that our money is absolutely fine there.

And when it comes to collectibles, I think I’ve crunched as many numbers as anyone, and have worked my way to the most honest dealers. For example, Geoff Anandappa of Stanley Gibbons came to Aspen last week to talk about collectible stamps with our Alliance Members.

Shifting gears to Japanese real estate... I think Japanese real estate will be an extraordinary investment for a very long time. Real estate nationwide has fallen every year since 1990... until now. Interest rates are really low.

There’s a huge pile of pent-up savings earning no interest, and I seriously doubt the government will get in the way of a housing boom. So in the latest issue of Sjuggerud Confidential, I recommended a small Japanese real-estate stock.

My brother, who is currently an attorney for a major law firm in the U.S., is transferring to Tokyo to work on mergers and acquisitions in January. He’s been studying Japanese. I’m hoping he’ll be a great local contact for us next year, as I travel there to check things out.

I think these three investments have the potential to make extraordinary returns for many years to come.

Even though all of these investments sound unrelated, they all share the same characteristics we look for in a buy - they’re exceptional values... that are ignored (often hated)... and are just beginning their uptrends. Those are the secrets to True Wealth investing.

But the biggest secret to the success of True Wealth? I think the “secret” is simply that I’m passionate about what I’m doing. And that is helping people grow their money safely.

Stick with us at DailyWealth, and we’ll show you how to do it every day.

Good investing,

Steve