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Well, of course, as I have conclusively proved on many occasions, not least in some of these  blogs, that latter comment very rarely holds out to be true. There are times to buy and times to sell. You certainly dont buy when prices are high and affordability is getting close to some of the limits. You also dont buy going into a crisis. You wait till the crisis works its poison, and when things appear to be at rock bottom, that would be the time to buy. Prices of real estate are always a lagging indicator, that's why it's so easy to work out what's going to happen next. But most people just dont get it.

I mean, for heavens sake, I've been forecasting house price movements since the mid sixties. I've never yet got it wrong.

There is also a question which comes up very frequently when I do my financial calculations based upon a minimum return of 10% p.a. Where am I getting 10%?

I assume it hasn't escaped your notice that the world of banking has drastically changed over the decades. In particular, over the course of the past generation interest rates have kept falling, and they are now effectively running on minus figures. Bank rate is somewhere in the dodgy zone of about 0.1% across rather a large chunk of the world. With inflation running somewhere around 1% in most countries that sends the return on money saved with a bank negative. But then who wants to leave money in the bank? Bloody silly place to put it.

I take a very simple view of money. This view differs from that of most people, so I think I need to start by explaining how I regard money.

I look at money as a servant. I work hard to get it so I expect when I've got it that it starts to work hard for me.

That means first and foremost that I do not borrow money in order to spend it. If I borrow money it is for one purpose, and one purpose only, to make more money.

The average financial idiot borrows to spend, and therefore remains forever poor. If I need something and it costs money, the first thing I do is work out how I can create a financial situation that will make me money. I then set everything up and use the money that situation makes me to pay for what I want. That way every deal I do makes me money instead of costing me money. Disarmingly simple, and to my way of thinking, disarmingly obvious.

Once I've made some money I then treat that money as a servant and put it to work for me. Who needs staff? They are a nuisance, usually unreliable, and they cost money. Money doesn't cost money, it makes money, and money is the best servant I know, and it works non-stop, and it has the capacity to create money exponentially which is totally beyond the ability of a human worker.

When I look at any investment situation I do my due diligence first. I have several basic rules, but this isn't the place to go into how one should do due diligence. But assuming the investment passes all the necessary tests I apply one further test: the return must be more than the rate of inflation rounded up plus 10% ROI. That means at the moment I would not even consider any investment that returned less than 12% p.a.

The next question is: where do I get such an investment?

I am writing this on Tuesday Feb 9. If I look in my inbox I find at least three threads suggesting deals. I won't necessarily take any of them, but let's look at what I'm presented with.

"High-yield property development partnerships-profit share & security.
LUXURY PROPERTY DEVELOPMENTS WITH ATTRACTIVE PROFIT SHARE OPTIONS AND FULL SECURITY AND OWNERSHIP
IN STRATEGIC SOUTH-EAST LOCATIONS CLOSE TO HIGH SPEED RAIL LINKS TO LONDON
Property joint ventures are when parties come together to form a company which will be used for the purposes of buying residential or commercial property. This can be in the form of buy-to-let for rental income or for development of new properties or refurbishment of existing properties for re-sale. Joint ventures are a common practice in property and can be mutually beneficial for both developers and their partners, and the ability to share costs and risks can be a significant benefit to all parties."

This deal advertises returns of 8%. Too low for me, so let's move on.

Email 2 is from the same company, so let's move on to the third.

"If Fixed Returns of 15% per year aren't compelling enough as an investment proposition, then what about an Equity Bonus to further enhance the offer ?
Receive a gift of Equity Shares equivalent in value to your original investment and still benefit from a Loan Note offering 15% Fixed Returns per year for 36 months.
This way, you will earn a fantastic fixed rate of return - and also share in any further upside that High Street Group can produce over the same period.
You will even receive your shares shortly after you make an investment.
Key Features
    •    36 month Loan Note investment
    •    Fixed Annual Returns of 15% per year
    •    Receive an Equity Bonus to the value of your original investment
    •    Security Trustee acting to protect investor interests
    •    Corporate Guarantee on capital invested
    •    Pipeline comprises 14 Ongoing Projects with an estimated GDV of over £1 billion
    •    Minimum Investment of £10,000
    •    Open to High Net Worth and Sophisticated Investors"

I'm not recommending this deal, just showing you what's out there. And that is just taking pot luck from my daily email client.

Okay, let's forget real estate. Who wants it? Where is the real money? In money of course. It always has been.

One person once hit me with the extremely stupid, but apparently unstoppable argument about the Indians selling the land on which New York was built for the measly sum of $6.  Yeah, right. How much would $6 be worth today if it had been put in a bank account and had received the basic interest over the years? Now tell me how much the land under New York's buildings would be worth if nobody had built a city there. That $6 would be worth an insane amount today. I did the calculation once, but haven't the time to go look for it now, but believe me the figure is astronomical.

Remember, money works for you, land doesn't. You have to work the land to make it give up value. And it can be hard work. I know, I used to live on a farm. I know, I've built the houses and landscaped the gardens. Give me money as my servants any day of the week.

Okay, let's look at modern banking just for a moment.

I live in Portugal which is a very old fashioned country, way behind the times. The country still does things in an old fashioned, labour intensive way. In most countries if I want to pay a bill I simply flash a piece of plastic over a reader and the bill is paid within seconds. That's it.

Now let me explain what I do in Portugal to pay my electric bill.

There is one office in Faro (forty miles away) where I could pay over the counter (I think). Generally I get an email telling me to pay the monthly bill. I cannot reply to this email as it is a No-Reply email. I cannot phone anybody as the telephone numbers all run into answerphones. I have to open a bank account. It has to be a Portuguese account, which costs me eight euros a month in fees. I then have to fund that account. If I did that by transfer from my own bank that would cost me £25 each time I did a transfer. I therefore choose to withdraw funds using my card, then queue to get into the bank, and pay in the money. I do that once every two months, wasting usually about forty minutes of my time. The bank then charges me a fee for paying the monthly electric bill, which is usually about thirty-five euros. In other words my bank costs in paying a bill are larger than the bill.

What a waste of space for the bank, a waste of employment for the bank tellers, a waste of my time, and a ludicrous chain of events. With DeFi none of this is necessary. Portugal may discover Defi sometime in the next ten or twenty years, or not.

What am I talking about?

Traditional finance requires several layers of middlemen. It requires brokers, clearinghouses, auditors, and specialised insurers.

DeFi replaces all of that with a few lines of computer code. DeFi uses "smart contracts" to do all of the things that banks can do like issuing loans, interest accounts, and even bonds and derivatives. You see, smart contracts are computer programs that run automatically on blockchains. So even people who don't have bank accounts can get involved. All you need is a mobile phone and crypto.

This technology today offers interest rates between 8% and 12% for lending, borrowing, and trading... and even buying digital art through blockchain-based smart contracts that execute automatically without human intervention.

You want to earn 10% p.a.? Well, what's stopping you? You can automate the whole process. Admittedly it's all a bit clunky to do at the moment, but I bet that before the year is out there will be a simplified, easy-to-use system in place. All you have to do is keep yourself up-to-date with the technology. It is true that people do take a while to catch up with technology.

I hassled my clients to get into Bitcoin in 2015 when the price was $280. You dont have to go overboard. You want a pension. Bung £1000 into bitcoin and forget it is what I advised at the time. That £1,000 would have bought you four Bitcoin. That's now worth over £150,000 as I write this.

Ten per cent per annum? Difficult to find? I think not.

Let's not give up just yet. What else do I claim in my books on making money? Find the current trend and hang on in there.

In the sixties it was real estate. In the eighties it was Japanese unit trusts. In the early nineties it was real estate again. In the mid to late nineties it was the internet. These days it's all about AI and biotech. If you want to latch onto a real estate ride you need me. (I dont advise it at the moment. If you have been watching these blogs you know why.)

If you want to latch onto AI and Biotech then get someone on your side who knows the score.

How am I doing? I'm only into this in a small way as I have only been doing this for the past six to nine months, but I'm up one hell of a lot more than 10%.

Of course, one of the stalwarts of the investment business is the world of art. I have in my in-tray an article claiming that a company that invests in art has managed a return of 31.1% for their clients in 2020. That's not bad at all. Here are a few statements from the article.

"For the last fifty years the art market has shown steady growth. In 2020 Christie's, Sotheby's and Philips achieved more than $370 million through auction sales. And Art has been named 'Best Investment' by the Wall Street Journal."

Oh yes, and you can invest from as little as £10,000.

Not for you? In that case how about the very latest way of investing by using SPACs. But this is not a lesson in how to make money, simply a way of answering a question. If you guys want me to go into all of this in a big way then let me know and I will do my best to oblige.

On the other hand, if all you want is 8% p.a. then stay poor. But you most certainly dont have to.