BE CAREFUL! This Is Serious… – Ray Dalios Last WARNING

Ray Dalio has studied the last 500 years of history and economic cycles. In this video, he explains a serious transformation the world is currently going through that affects everybody. Share your thoughts in the comments below and enjoy the analysis from one of the world’s greatest investors!

There are three things that are going on now to great extremes that have not existed since the 1930 to 45 period and it’s important to know those three things and then to understand them well the first is what is going on with money and credit when you get to something like a zero interest rate and you need buying power the government needs buying power but they

Can’t tax it so what we have is the production of a lot of debt that the central bank prints money and buys that debt to spend and the last time that happened in the last few years it happened starting in 2008 interest rates at zero they couldn’t lower their interest rates so they had to print a lot of debt and the government went in and bought it okay and we’re

Coming to the end of a debt cycle so this is a big thing like because where does the money come from and who will get what the government will now determine that and then they’ll print it and it’ll devalue money okay this is and how money flows a big deal so that’s number one the second one are wealth and political gaps that are causing great conflicts throughout

History there’s always been the main things that everybody’s always fought over is money and power particularly political power so what we have is a situation when you have a large wealth gap and you have an economic downturn particularly if you put a lot of debt having at the same time you you have a fight i mean that’s been true through history and it’s reflected

In the political gap so the political gap is it’s classic political gap left right capital is socialist but how do you distribute it how are you going to deal with that that becomes the other and how you fight so that’s the second of the two this wealth political gap that’s causing the conflict and it’s coming at a time where we don’t have much money because we

Don’t have a good financial position we’re printing and putting it out with made up money meaning what happened like covid was such a good example a lot of people and companies had falls in their income that would be ruinous if checks didn’t go out we would have had a revolution and so those checks and how do you save everything and so on okay so and it’s not like

The government had real money so they made more debt and then the federal reserve printed it you know the checks went out which diminishes the value of money and so on and changes things so then the third thing is the rise of a great power to challenge an existing brake power so the rise of china to challenge the united states in all history there are world orders

What that means are the dominant power you know it’s like in nature almost the big bull or something anyway there’s the dominant power and then what happens is in 1945 we entered the american world order the united states won the war and then in 1945 the winners of the world carved up the world we had 80 percent of what was considered money at the time gold 80 of

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The world’s money essentially we counted for half the world’s economy and the rules were set in the united states basically that’s why the united nations is in new york the world bank and the imf and washington dc because we began the american century and then we are now at a time we’ve never had somebody another power challenge us up in the same way there was the

Soviet union but they were always a fraction of the size economically so couldn’t compete on that same basis they had nuclear weapons but they didn’t have the economic power and so on but now we’re dealing with china coming on as a power i spend a lot of time in china over the last 36 years by the way and i admire how they’re doing a lot of things i mean i know

It’s controversial to say that but in terms of like their power whoa like since i started going there their average income has increased by 30 times so they’re a comparable power and they’re also growing faster and so that has an effect so those three things are things that never happened in my lifetime before but happened before in history which led me to do the

Studies of what happened in history and the lessons i could gain it affects everybody you know it affects like we know let’s start with ourselves most importantly forget about the outside thing can we be healthy and strong and what do we need to do like to know you have to be in it together like if we can row in the same direction okay if we can have thoughtful

Disagreement and get past that if we can be in it together like the wealthy and the poor it sounds so difficult but at the same time if you read history and you see what happens when it’s not when you have a civil war like we could be on the brink of a civil war that sounds so crazy but the truth is in most countries almost every century jury there was a civil

War or a revolution some form of civil war revolution so it’s almost inevitable that we’re going to have something okay you either resolve it or you start fighting so badly that you really once you cross a certain line there’s no coming back because you do the damage you demonize and that person such an enemy or that class of people is such an enemy that the

Communication’s gone and the fight well you see this in politics today in other words is there a respect for the system and a mutual respect of trying to resolve these types of things or will they go to any lengths to win because a constitution or law will only carry you to so far okay there has to be an element of respect for it right if you think about i want to

Distinguish there’s big differences in opportunities so let’s say supposing you have two people comparable opportunities the marshmallow test is you take a kid and you say okay you can have one marshmallow now or you could have two marshmallows in 15 minutes if you don’t eat the first one once you start to realize that deferred gratification is going to make you

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Better and so on and you start to count how many days weeks months or years can i live if i don’t have money come in and you start to focus in on that that’s the first step okay like the marshmallow test so i want to save you got to start there then if you do that you’re necessarily going to go save in what and then you’ll start to get exposure how these things

Are different okay then you start to care so i can have one of these and one of those and you start to experience and then you start to learn and basically that’s what makes the difference when it comes to the money now at that moment that you don’t want it you have savings that means i want savings so the next thing inevitably that’s going to come at you is where

Do i put it and then you get your choices and then you experience it and you learn i think first calculate how many days weeks months or years you can live on your saving because when you do that you’ll gain security so look at how much you’re spending and then say how much do i need and whatever that number is you’re going to need more than that because it may

Go down rather than go up so now do i have a year spending i think you start there then you start to think what are the things that are most important for me and then you start with your business or your residence that have a symbiotic relationship and that you know well if you start with your business okay you’re closer to that investing in yourself whatever that

May end up being that may be your best investment but if you’re in a job that’s not the thing because you’re in a different position and then i really think there’s something good about your home a basic thing about your home because it’s nice forced savings and it also means that you fix it up you’re saving you find out there’s oh well if i add this thing or that

Thing and you’re enjoying it so when you’re enjoying it and your control it and it’s yours and so on that’s pretty good you know if they keep mortgage tax deductions and so on you know there might be some benefits to it also okay but that’s not a black and white answer you know so you could take a short principle and say is it better to rent or buy okay that’s a

Different question but by and large am i going to move you know all of those other questions so when you start with okay what is it that’s close to home and how much you need a certain amount that’s liquid in other words you got it in your house you got to make a mortgage payment or something and all of a sudden you know it’s not liquid and you lose your job well

That can cause you trouble so how much do i have that’s liquid how much do i have that’s not liquid okay and you start to get those things right pretty soon you’re getting yourself in good shape and then you’re also having some experiences and then you go beyond that so you start to okay what’s a stock what’s a bond and then you know you learn through experiences

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I learned through my experiences i started when i was a kid 12 i used to caddy and i took my caddying money and i put it in the stock market and i was lucky what happened to me by the way is i took my cadding money and i bought the only company that i ever heard of that was selling for less than five dollars a share and i was really dumb i thought i’ll buy my sure

So if it goes up i’ll make more money and it was the only company it was a company that was about to go broke but some other company acquired it and it tripled and i thought ah this is an easy game and i like it easy money but you know you experiment and you learn you earn a hundred dollars and you spend 105 that’s misery if you earn a hundred dollars and you spend

Ninety five dollars you’ll have a good life basically i know so many people who don’t earn much but are there because if you start to think about what it is that it costs you to live in terms of let’s say the basics you know give me a sleeping give me the food let me be educated and so on so forth i think most people can get themselves in a position where they’re

Net positive so if you can be net positive and you could do that you know that’s number one then i guess it was the list that we went to you know the second is you know what do you do next in terms of what do you need what are you best at and then avoid the following mistake the most common mistake of investing thinking that the investment that did good is a good

Investment people rather more expensive the things quite often those markets that did really really well became more expensive and everybody smart money is all the time comparing them and competing so what happens is the naive money buys the thing that was hot or is hot the thing that has been terrible which might be the thing that’s beaten down so i would say

Also an important element diversify because what i learned about this is that first of all investments compete and it’s not easy to tell whether one investment is better than the other because if people could do that life would be easy and everybody make a ton of money and this is a competitive game that’s very difficult to compete in so it’s very difficult to

Say which one’s better or worse you could take experts and do all sorts of tests and you’ll find out that they can pick that and you can’t tell whether the worst ones are going to be better so because of that you under understand that even picking the best ones is difficult and particularly if you’re naive like we spend hundreds of millions of dollars each year on

Research to try to give us an edge okay now you’ve got to compete with us so competing in the markets is more difficult than competing in the olympics but there are more people who try harder in order to do that so it’s a zero-sum game but diversification will reduce your risk without reducing your return that’s critical

Transcribed from video
"BE CAREFUL! This Is Serious…" – Ray Dalio's Last WARNING By FREENVESTING