Happy Friday! Wow, what a week! Between Greg Smith’s scathing resignation letter from Goldman Sachs publicly posted in the New York Times to Apple stock hitting $600 to Fender Musical (yes, the guitar-maker) filing for IPO…it’s been quite a week!
I’m going to jump right into this week’s questions and let you get on with your St. Patty’s Day weekend!
First, Mark asks,
Great job setting up KungFuFinance.com! I just started digging in, and I really appreciate all the content you have pooled together, how you broke it up, and your writing style. I enjoy reading your ideas! Are you able to share things like your suggested asset allocation or particular investments you like? Or are the SEC restrictions so restrictive that only paid members that agree to some legalese can see more specific recommendations?
Hi Mark! Thank you for your nice words, and that’s a great question. It’s one that I get often and is one that’s on everyone’s mind, I’m sure.
Yes, I can definitely share my asset allocation and particular investments I like…to an extent.
I actually mention it in the “Who Is Kung Fu Girl” page, but probably not specifically enough for most people (I’m sure everyone would like to know exactly, but I can’t be too exact for several reasons, which I will get to in just a moment).
Right now, the bulk of our investments are in gold, silver, “cash” (various short-term stuff), rental real estate, foreign real estate (land), domestic and foreign stock, bonds, currencies, two private placements and an early-stage company. (Wow, clear as mud, right?)
Unfortunately there are many reasons that I can’t be more clear, or tell you exactly what percentage we have in which asset class.
The most important reason to me is that my husband, Kung Fu Guy, is an extremely private person, particularly where money is concerned (as are most people…I’m the oddball!).
And because I decided to be “authentic” and use my real name on this website, everything that I say is traced directly back to me (which is fine), but also to him by association (which is fine as long as I stay within the bounds we agreed on).
And even seemingly innocuous statements on my part can unintentionally cause him grief…for example, after I wrote the article on Simon Black’s resilient community he was asked at work, “Oh, so are you and Susan moving to Chile?”. (Let me tell you it is NOT great job security when the people you work for think you are moving out of the country in a year or two…).
(And please note to anyone reading this: we are not moving to Chile—we love Palo Alto and are just diversifying our assets internationally!) 🙂
So as I would like to keep my marriage (and our lives) intact I need to be extra cautious about what I say and think about any unintentional impact it might have.
It’s also simple respect…I can imagine if he started a blog about another “taboo” subject, like say, sex, and then proceeded to tell everyone the intimate details of our sex life….I wouldn’t appreciate that very much! So because money tends to be another “taboo” subject and an extremely private matter, I need to respect that, too.
So that’s my biggest personal reason. There are more, however…
Another important reason why I don’t share exactly what I’m investing in at every moment is that by saying so, it is an implicit (or rather, quite explicit) stamp of approval. And there are times when I try some very risky things that are extremely “inappropriate” for the vast majority of people…much like the Forex article I discussed a few days ago.
Everyone’s personal financial situation is different, and everyone should develop their own personal financial plan that perfectly fits their unique situation. What is right for me, as a 30+ year old woman with two young girls and a certain allocation of assets / needs / desires is probably completely inappropriate for a college student or young single person willing and able to take on more risk, or a senior trying to maximize his/her income each month.
It’s one of the biggest reasons I am such an advocate for teaching people how to fish versus giving them fish…I might accidentally recommend tuna or tilapia to a woman only to find out she is pregnant and the levels of mercury are much too high! It’s the same in finance…different assets are appropriate for different people, and for different levels of financial sophistication. I want to educate people so that they know exactly which asset classes are the best for them, and to grow their financial sophistication to the level where they truly feel and act like the “smart money”.
I could also go back in time and provide you with everything I have invested in over the past ten years to arrive finally at “Accredited Investor” status, but even if I do that, I am not sure it will help you to do the same, because markets change daily, let alone annually or over decades, and what worked for me 7 years ago quite possibly will not work “exactly” the same way for you today (although the principles will, which is why I am such a big proponent of education!).
I believe it is much more important to learn how to do it yourself, and what will work for you now, rather than what worked for me 10 or 5 or 2 years ago.
I am continually investigating new ways of building wealth, and I hope and plan to bring you many more stories and ideas on those in the near future.
From time to time I do mention some investments that I am making now (e.g. if you’re a subscriber and have read my free report I tell you to own gold and own cash, and I do so myself), and I also mention other specific investments I am making (I bought Prophecy Coal a few months ago, for example) but I am cautious to do so for the reasons I’ve just mentioned.
And yes, regarding the SEC and various regulatory bodies, I do need to be careful. I am not a registered investment advisor, and I would never want to be accused of “pump and dump” (although I can’t imagine this scenario anytime soon as Kung Fu Finance is still relatively small compared to “the big guns”…but it has happened to others in the financial field).
(Pump and dump is where someone talks up a stock that they are buying, waits for everyone they’ve talked it up to to “jump in and buy”, and then promptly “dumps” the stock at a profit while the followers get creamed.
I would never do that but I also have zero control over what anyone who reads my articles actually does after reading them, although I like to believe that the majority of people are good, honest people, and in general I look for the best in people!)
So that’s why I’m not more open about *exactly* what I’m doing, how much, and when…but if you read between the lines you’ll actually know quite a bit about what I am doing. For example, I’m still a gold and silver bull (I’ve written extensively on this), believe in holding enough cash to take advantage of severely underpriced assets, sell put options (particularly in volatile bear markets), like rental real estate in growing parts of the country, and much, much more!
In fact there are so many great asset classes to write about, I may have to go back to writing five days / week! Thank you so much for your great question, and for letting me use it to address the question that everyone has about me!
With that, I’m going to sign off for today and wish you a very happy St. Patrick’s Day weekend!
To your financial success,
— Kung Fu Girl