When I started The Elevation Group, I made a promise to our Members…
I promised to document my journey into the world of investing, for better…
… or for worse.
While it would be nice to focus only the victories — the greatest lessons to be learned often come from our defeats.
From divorce, to being defrauded by con artists, to watching hopelessly as two close friends battled life-threatening illnesses, the past 365 days have been the most challenging of my life.
But inside every dark cloud is silver lining. And that silver lining is the opportunity to learn from these challenges and share them with full transparency so that we can all grow stronger.
My ultimate desire is that you may learn from my mistakes, and become better for them.
It is to inspire strength in you when you encounter judgment, when you encounter doubt, and when you encounter failure.
I’ve found that when you commit yourself to living an extraordinary life, the universe accepts your deal and silently goes to work challenging you so that you’re always prepared for bigger challenges — and greater rewards.
Challenges are not always fun… at times they can feel unbearable, but I want you to know that your mission is well worth it. And that life only grows more and more interesting as you travel down your path towards your greater purpose.
I’ve declared my purpose in life to be a leader, to be an educator, and to contribute as much value to the world as I can for as long as I can.
This message is to honor that purpose. Thank you for giving me the opportunity to share it with you.
The Elevation Group’s, 2012 Year-In-Review…
Because I’m going to post this Year-In-Review publicly like last year’s, I want to quickly re-cap the purpose and the mission of The Elevation Group for those of you who will be hearing about it for the first time…
The Elevation Group (EVG) is essentially an online diary I started in 2010, after watching my friends and family get hurt in the financial crash of 2008.
I was angry about the money they lost, but I was even angrier about the advice they were given, which was… “Just keep putting more money into the stock market like you’ve always done, and everything will be just fine.”
The simple fact of the matter is that the investment and retirement products and vehicles of the middle class, aren’t designed to make the investor rich. They are designed to make the investment company rich.
They make money from your account whether the market goes up or down. When banks screw up, they get bailed out by us… but you and I don’t get bailed out by anyone.
I knew there had to be better ways to invest and create financial freedom in this chaotic world we live in today, so I set out to find them.
I am not a financial or investing expert of any kind, and I don’t pretend to be. (Heck, I barely know how to use my E-Trade account).
So I sought out the most successful entrepreneurs and investors in the world and provided a platform for them to share exactly how it is they become wealthier and wealthier every year — no matter what happened to the stock market. And then explain it in a way that even total beginner investors could easily understand.
The mission of EVG is to empower the people of the world with the investment strategies used by the ultra-rich.
I’m proud to say that over the past two years more than 40,000 Members from around the world have joined EVG, ten times as many read our free newsletter, and The Elevation Group has revolutionized the way thousands of people think about investing — myself included.
As you’ll see later in this story, my personal approach to investing and retirement (that I’ve learned from EVG experts I’ve interviewed) is wiping the floor with the Wall Street establishment and “old-school” methods.
In fact, over the past four years since 2008, my average annual return has been more than 1,500% (read on to see full details of how I did this). And that’s despite the fact that I’m not an investing guru, and that I proudly admit that I failed all of my college, math, finance and accounting classes at least once.
Obviously these results are incredibly good, but as I mentioned earlier, life is always there to keep you humble, and one event I experienced this year was very humbling indeed. In fact, humiliating is the better word for it.
I know many of you are familiar with the situation, and with these events taking place almost a year ago, many consider it “old news” at this point.
Bloomberg wrote a small blurb about the story back in September, and we’ve been posting updates on the public EVG blog for the past five months.
With that in mind, I know that many people have not yet heard about this, and I feel it’s important that you do because there are extremely valuable lessons to be learned for everyone.
The Nightmare of 2012…
After spending three years creating an incredibly conservative investment foundation, which consisted of precious metals, “cash flow banking”, and real estate, I wanted to explore alternative strategies that had the potential for much higher yields.
In the summer of 2011, I came across a site in the Forex industry, (currency trading), which caught my eye. So I bought and studied the education product and was very drawn to the content because the author appeared to share the same mission we did…
… to help the middle class become wealthy.
So after going through most of his content for a several months, and searching more about him online but not finding any kind of negative feedback, I decided to contact him to see if we could fly down to Australia where the company was based and learn more.
We flew down to Brisbane and spent the next three days getting to know this person as well as we could.
After meeting with him and learning more about his company, we recorded a video lesson with him for our Members. The feedback was incredibly positive, so we shared his product with our readers and Members in February of 2012. Recommending other products we like and use is a standard piece of our business model. Sometimes we receive a commission when these products are or sold. Sometimes we don't. In this particular case, we did receive a commission on each product sale, and were very transparent about that fact with our readers.
After going through the education his company provided, he offered an opportunity to set up an account with his preferred broker, which was registered and in good standing with New Zealand financial authorities.
At that point, his proprietary trading group who had documented returns which were audited by KPMG (at least that’s what was claimed and illustrated), of around 100% per year since 2008, and would trade your account and take a percentage of the gains.
So I invested a significant amount of money with his team, as did 970 other EVG Members.
One day in May of 2012, those of us who invested with his trading group woke up to find that our accounts had lost 63% overnight due to a “human trading error.”
Not being satisfied with the answers given, we flew our legal team down to Austin to review the entire chain of events.
After scrutinizing every detail surrounding the loss, our attorneys felt there was a very good chance this was all one giant con, and we had been played as the ultimate patsy.
The very next day, we contacted the SEC, CFTC, and the ASIC to start an immediate investigation.
Over the past few months we’ve come to find out through the diligent work of the Federal authorities that this was likely an elaborate fraud, and that in excess of $50,000,000 has been lost, stolen, hidden or misused.
Because of the legal ramifications involved in this situation, (which I’ll share with you in detail shortly), I’ve had to stay quiet and simply let people say what they will, despite the fact that 99% of the commentary has been incorrect.
Now that our role in the legal proceedings is starting to wind down, I’ve finally been given the green light to set the record straight.
I figured the best way to do that was to simply give you the same sworn affidavit that was submitted to the CFTC, SEC, and ASIC under oath and penalty of perjury, which outlines the chain of events that took place.
I would encourage you to read it, as it is the only true and accurate accounting of events as I experienced them, and as evidence supports.
In order to verify the facts below, help authorities recover the stolen funds as quickly as possible, and bring justice to this matter, I voluntarily handed over copies of my computer hard drives, emails, and bank statements.
To my knowledge, none of the other parties have done the same.
Michael Dillard of 815-A Brazos St. #111, Austin the State of Texas, United States of America, businessman, states on oath:
- I live in Austin, Texas, in the United States of America. I am the founder and president of The Elevation Group (“EVG”), which is also located in Austin. EVG is a subscription-based investment/financial news blog located at www.theelevationgroup.com. EVG subscribers are given access to a variety of content, including interviews with investment professionals and high-net-worth individuals to learn about their wealth-building strategies. EVG's blog has over 20,000 paid subscribers.
- I am also the director of Finish Strong Ventures Inc, a company incorporated in [State] . I make this affidavit on my own behalf and on behalf of Finish Strong Ventures, Inc. In or around June 2011, I became aware of a financial education and trading program called “ProphetMax” that Senen Pousa offers through his company, Investment Intelligence Corporation Pty Ltd (“IIC”). Pousa called the trading program “ProphetMax Managed FX.” In reviewing IIC's website, www.prophetmax.com I saw that ProphetMax claimed to have access to “elite” trading partners around the world that enabled investors in ProphetMax Managed FX to realize exceptional financial returns.
- Pousa posted several videos on the IIC website that described the ProphetMax program. These videos were available by subscription only, and had to be reviewed before investing in ProphetMax Managed FX. To better understand the ProphetMax training program, I purchased a subscription in about July 2011. Most of the videos contained presentations by Pousa personally. Among other things, I recall that in some of the videos, Pousa said words to the effect that investors in his ProphetMax Managed FX program had realized a rate of return of over 2,500% over the previous 48 months.
- After reviewing the ProphetMax training videos, I contacted Pousa and suggested that we discuss the possibility of introducing ProphetMax to EVG subscribers as a new series in EVG's curriculum. Pousa said in a Skype conversations and in emails that he was interested and we had further discussions on Skype to advance that over a number of weeks.
- On 2 February 2012, my business partner, Robert Hirsch, Chief Executive Officer of EVG, and I filmed an interview with Pousa at his offices in Brisbane, Australia. The interview was to be made available to EVG subscribers through the EVG website.
- During the interview, and at other times when Hirsch and I were in Brisbane, Pousa said words to the effect that:
- (a) he used “six of the world's best” forex traders who traded currencies 24 hours a day;
- (b) using this proprietary trading group, ProphetMax had turned every $10,000 invested in October 2007 into just over $281,000 in January 2012, with average net returns of 78 percent per year or 6.8 percent per month; and
- (c) ProphetMax provided investors a low risk trading strategy because it made only a few select trades each month with no more than 3% of an investor's capital at risk in any given trade.
- On 16 February 2012, the Brisbane interview with Pousa was posted as “Lesson 19” on the EVG website. This lesson was available on-demand to all EVG subscribers, i.e. all EVG subscribers could view the Brisbane interview at their leisure
- Because of the positive response from EVG members to the Pousa interview, EVG held a live webcast with Pousa. The webcast was broadcast over the internet from Austin on 22 February 2012. Pousa was physically present in Austin for the webcast, and during the webcast Pousa took questions from EVG subscribers via EVG's Facebook page.
- EVG Members were allowed to post comments under the lesson content on our website. Hundreds of Members left positive comments about the presentation Pousa gave. The video broadcast platform used for the live video sessions allows me to see in real time how many people are watching or have watched the presentation. Using this count I saw that over 12,000 EVG members and email readers viewed the webcast.
- During the webcast, Pousa again said words to the effect that he had been actively and successfully involved in investment markets, including foreign exchange trading, for many years and as a result he had access to elite trading partners. Pousa stated that since 2003 his proprietary group of six traders had been able to obtain nearly 100% annual returns on investments, and if compounded the returns would exceed 2,500% for the period from October 2007 to October 2011.
- Pousa said words to the effect that each of his last eight years of trading had been “profitable” and that he “and his research team have been ranked number one in the world and outperformed 15,137 Morningstar Funds and 195 investment newsletter recommendation services monitored by Market Watch.”
- Pousa further said words to the effect that the ProphetMax Managed FX investments were very low risk, with no more than 3% of capital at risk in any given trade. Pousa stated that trades would be made on only four to five days per month, and that no more than eight trades would be made on a single day. Pousa stated that while there was some inevitable risk involved in the trading, losses were very unlikely.
- Pousa stated that he offered two managed investment vehicles. He claimed that the first, ProphetMax Managed FX, was a low-volume, low-risk trading program that required a minimum $10,000 investment. He claimed that the second, ProphetMax Pro, engaged in higher-volume trading and required a minimum $500 investment. Pousa also represented during the webcasts that his traders would receive a “performance fee” of 25% of any profits they made for investors. Pousa stated that he did not personally receive any commissions.
- During the webcast Pousa also directed attention to a marketing brochure available on IIC’s website. The brochure claimed that:
- (a) for over a decade, Pousa has been researching, interviewing, and documenting the activities and performance results of the world's highest performing money managers, investors, and traders;
(b) Pousa uses “charts, technical analysis, research and economic fundamentals in his decision making process” and had “applied this to attracting and selecting stocks, ETFs, commodities, currencies, fund managers, proprietary trading groups, Quant programmers and institutional-grade algorithmic trading software”;
(c) using this methodology over the last 8 years, Pousa's “selections have been profitable each and every year”;
(d) that over the last five years “Senen and his research team have ranked number one in the world and outperformed 15,137 Morningstar Funds and 195 investment newsletter recommendation services monitored by MarketWatch”; and
(e) ProphetMax Managed FX service has grown an October 2007 $10,000 investment to $284,958, and the detailed monthly performance results of the proprietary trading group have been verified by “Robert Gereige, Market Research Analyst.”
Exhibited and marked MND01 is a copy of the marketing brochure that was on IIC's website.
- During the webcast Pousa also said words to the effect that these extraordinary results have been audited by the prominent accounting firm KPMG. During the webcast, Pousa said words to the effect that he would make the audited results available to EVG subscribers, with minimal proprietary information redacted.
- On or around 19 March 2012, Pousa emailed to me a severely redacted letter dated 20 February 2012. It references KPMG as “auditor” and purports to be from an unidentified (due to redaction) third-party vouching for the performance of Pousa's “proprietary trading group” including confirmation that “they have indeed turned every $10,000 invested in October 2007 into $281,082 as of January 31st 2012.” The letter makes additional representations regarding meeting rigorous compliance and due diligence standards.
Exhibited and marked MND02 is a copy of the letter I received. Investment with Prophetmax Managed FX
- I decided to invest in ProphetMax Managed FX program. I made this investment through my company Finish Strong Ventures Inc. My understanding of the process from the presentations made by Pousa was that an account was opened with IB Capital, and that Pousa's proprietary trading group would trade this account. In order to invest, Pousa required me to execute a Limited Power of Attorney (“LPOA”) giving IIC trading authority over my account. The LPOA was submitted to Joel Friant, the head of customer service, at IIC's office in Bellingham, Washington. I never met Mr Friant in person. I only was introduced to him by Mr Pousa via a Skpye conversation after I had invested.
Exhibited and marked MND03 is a copy of the LPOA I completed.
- Pousa gave me instructions to wire the money that I wanted traded to an IB Capital account at ING Bank in the Netherlands. On or about 12 April 2012 I wired USD $XX,XXX to ING account number XXXXXXXX in the name of IB Capital FX. I did not receive a stock certificate for my investment but did receive periodic account statements, and was able to view my account performance via the internet.
- I received a number of account statements for my investments from IB Capital.
Exhibited and marked MND04 are copies of the account statements I received from IB Capital with personal information redacted.
- On or about 17 May 2012, I logged into my IB Capital account and discovered it had experienced losses of 63% as a result of extensive trading losses in the preceding days.
Exhibited and marked MND05 is a copy of my account statement for 17 May 2012 with personal information redacted.
- Shortly after Pousa said that the trading in the accounts was controlled by Kevin Clarke, of Global Forex Management, not Pousa's proprietary trading group.
- On or about 24 May 2012, Pousa held a webinar during which he attempted to explain the reasons behind the loss. On the webinar, Pousa was joined by an individual who he introduced as Kevin Clarke (“Clarke”). Pousa and Clarke together explained that the 63% loss was the result of a trading error by Clarke in entering the number of contracts to be traded in one specific transaction. Pousa and Clarke were unable to explain why the 3% risk threshold was exceeded by over 20 times. Pousa and Clarke later attributed the losses to a “technical error” caused by, “a misallocation of the Multi Account Manager.”
- During the webinar, Pousa sent via email a “white paper” entitled “Global Forex Management Response to Trading Losses for the Week Ending Friday 18 May 2012.” According to the White Paper and Pousa, Global Forex Management and its trader Clarke were responsible for the losses due to a failure of the “Multi Account Manager” and Clarke's in manually entering the volume of contracts for a trade. Clarke explained that he inadvertently added a “zero” which created ten times as many trades. Clarke further explained that the risk therefore “ended up being 10 times larger than it should have been.” Finally, Clarke explained that he had doubled the losses by entering additional trades in an effort to recoup the losses caused by his “error.”
- In the White Paper, Pousa and Clarke represented that the loss in May 2012 was only the fifth monthly loss in over four and half years of trading and that they were averaging returns of just under 9% per month over that period of time. Pousa and Clarke also encouraged investors to add more capital to their accounts, which they said would allow investors to recoup their losses more quickly.
Exhibited and marked MND06 is a copy of the White Paper presented by Pousa and Clarke during that webinar.Exhibited and marked MND07 is a copy of the transcript of the 24 May 2012 webinar.
- On or about 25 May 2012, I placed an 11-page statement on the EVG member forum concluding that EVG could no longer support Pousa's trading program. Shortly thereafter, Pousa contacted me by Skype to discuss this statement. However, despite my request, Pousa refused to offer any further explanation of the trading losses to either the EVG members or me. Pousa repeatedly claimed that IIC did not need an Australian Financial Services License because neither he nor IIC gives personal financial or investment advice, and nor do they manage or invest money.
- As of 6 June 2012, I was locked out of my ProphetMax accounts despite being a paid member and having substantial personal investments with ProphetMax and IB Capital. No reason has been provided by ProphetMax or Pousa to me as to why I can no longer access my accounts. On advice of Counsel I have refrained from contacting Mr Pousa.
- On or about 12 June 2012, IB Capital sent an email to account holders informing them that IB Capital had severed its relationship with ProphetMax. The email demanded that investors withdraw any remaining funds and close their accounts. No explanation was given for why the relationship was severed.
- On or around 19 June 2012, all of the “Level 3” ProphetMax content about the Managed FX trading service was removed from ICC's website.
- On 15 July 2012 Pousa sent an email to Prophetmax Quant investors which stated “on Monday, July 16th, 2012 we are holding an orientation webinar for anyone who wants to consider becoming a ProphetMax Pro/Quant member and wants to learn about ProphetMax Quant.” The email goes on to claim that “Quant has outperformed the S&P 500 by over 100%,” and that “we are only accepting wire transfers for anyone who wants to become a ProphetMax Pro/Quant Member.”
Exhibited and marked MND08 is a copy of the 15 July 2012 email with personal information redacted.
It goes without saying that this matter has been the single most devastating experience of my life, and certainly for the other victims as well.
I want you to imagine what it would feel like if your mission in life was to help people increase their financial prosperity, and then you met someone who told you they shared that purpose and wanted to help you fulfill that mission.
You bring them into your life. They meet your friends. They gain your trust.
And then three months later, you find out the entire thing was a lie, which was perpetrated with one goal in mind… to steal from, and hurt the people you care about most, and the people who put their trust in you.
I have already said this many times, but I want to say it again to those of you who were affected by these people… I am truly, truly sorry.
I spent the vast majority of 2012 struggling desperately to cope with the fact that what I value most in life, which is my reputation and the trust that my students and customers place in me, was violated by someone else, and used to harm others.
Every single day this has been the first thing I think about when I wake up and the last thing I think about when I go to bed.
An unbelievable amount of rumors and speculation have been posted online about EVG and myself as a result of this tragedy.
At the end of the day, there is only one group of people who actually have all of the facts and evidence surrounding this case, and that is the SEC, the CFTC, and the ASIC.
Several months ago, the SEC and the CFTC filed enforcement cases against this individual and the others for operating a fraudulent scheme in violation of the federal securities and commodities laws.
After reviewing the facts, the SEC and ASIC determined that they would not include myself, or The Elevation Group in their cases at all.
The CFTC determined that myself and EVG made a technical registration violation. In layman’s terms, we should have registered with them as an, “introducing broker”, which may result in a financial penalty.
Click here to read the CFTC’s press release.
The other parties are rightfully being sued for fraud.
Despite the fact that we were obviusly not involved in these fraudulent activities, and we are the government’s primary witnesses in the matter, having my name listed as a defendant (even though the claims are technical) right next to theirs has been unbelievably difficult to cope with.
This has obviously been a challenge that myself, and the rest of the individuals who were harmed here, did not expect to encounter.
Unfortunately unwelcome surprises are a part of life.
It isn’t whether or not they’ll happen, it’s how you handle them when they do.
In this particular situation, we’ve done everything within our power to represent the interests of our Members.
First and foremost, as we promised from the moment we found about about this, we voluntarily returned the substantial commission EVG made during the promotion of the ProphetMax membership site.
As far as I’m concerned, it’s dirty money and we want nothing to do with it.
On June 12th, I filed a class-action lawsuit on behalf of any and all EVG Members or readers who purchased this individual’s products, or who invested with his trading group.
Pursuing an international class action lawsuit is unbelievably expensive because you need to hire two different law firms at minimum — one domestically, and one internationally.
We knew there was no way our customers could afford to take legal action against these parties, so we took it upon ourselves to initiate that action on their behalf.
Most attorneys will pursue a class action case in exchange for a significant portion of the money that is recovered. We wanted every single penny to go back to our customers, so we took it upon ourselves to pay for the entire lawsuit out of pocket, which has cost several hundred thousand dollars to pursue.
The federal authorities have done an amazing job tracking down the missing money globally, and we’re hoping that we’ll all get some great news from them in the coming months.
It’s times like these when you find out who your true friends and supporters really are, and I would like to thank all of our EVG Advisors and experts for their support during this situation.
They could have walked away and tried to distance themselves from us during this horrible event, but every single one of them has stood tall by our side as a testament to their belief in us.
The easiest option for me this year would have been to quit… to throw in the towel and walk away from these challenges.
But with over 500,000 readers spread across three companies, I have a unique opportunity to lead by example, and to pass on these lessons learned to up-and-coming entrepreneurs so they can draw wisdom and strength from them.
And my lesson for you is this…
No matter what happens in your life… No matter how far you’re beaten down…
Always, always, always get back up.
We have learned many hard lessons from this experience, and we will not make the same mistake twice.
And Now For The Good News… Our Approach To Investing Is Wiping The Floor With The Wall Street Establishment…
While the horrendous ordeal above cannot be overlooked, 2012 was an incredible year for The Elevation Group and the investment strategies we’ve documented…
Unfortunately, the same cannot be said for the traditional markets and methods…
- According to HedgeFundResearch.com, the average hedge fund returned 6.2% last year.
- At around $157,000 per share, Warren Buffett’s Berkshire Hathaway (BRK.A), is up just 7.3% over the past 5 years, or an average of 1.46% per year.
- The average return of all domestic stock based mutual funds over the past 5 years is 5.47%.
- The S&P returned 7.5% in 2012, and is only up 10% over the past 5 years.
- The Dow returned 5.4%, and is up just 12.36% over the past 5 years. That’s an average of just 2.47% per year which basically means investor’s real returns after adjusting for inflation is a whopping 0%.
It’s quite obvious to anyone who’s paying attention that the global economy is awash with fraud, theft, and misinformation. Intentionally or not, it is being abused past any point of reason or sanity, and the consequences will be unprecedented.
The investment model used by the Boomer Generation is nothing more than a dream being desperately held onto by those who refuse to acknowledge that the world is in the midst of unparalleled change.
The middle class who continue to participate in this system are literally feeding the machine that will devour them in the coming years.
It’s my belief that if our next generation is to thrive, let alone survive… they must become self-reliant when it comes to investing. To trust the government, or Wall Street with your money and your dreams, is akin to trusting a thief with your wallet.
The Elevation Group’s mission has been to document and share the strategies used by the rich to prosper no matter what happens to the economy, with the rest of the world, so that we may prosper as well.
Over the past few years, I’ve found that most people opt for the traditional investing route of managed, fee-laden mediocrity, because they simple aren’t aware of the alternatives. That was indeed my situation until I started this project and made it my life’s work to “become aware”, of these alternative options.
So how have the strategies I’ve learned and demonstrated in The Elevation Group over the past four years worked out?
Let’s take a look…
(The returns for the following investments were calculated and provided by the respective managing firms. These returns are currently unrealized, as all assets are currently held and have not been sold).
My overall strategy when it comes to investing in a post-2008 economy, is to choose investments that have potential for a competitive return on investment in either a deflationary, or inflationary environment.
For the past four years, we’ve been sitting on a razor’s edge, equally capable of falling into the next Great Depression if the markets are allowed to de-leverage, as they need to, or hyperinflation as a result of the Fed’s attempt to halt that deflation by printing trillions of dollars in new currency.
The “stability” we’ve experienced the past few years has come at the cost of unprecedented, unsustainable levels of new debt, from which there is no escape. We don’t know what will happen or when, but thanks to history, we do know that one path will eventually run its course…
So my approach is fairly straightforward, but what might surprise you is that I’ve avoided stocks for one primary reason…
I believe the stock exchanges have been twisted into a rigged game, as they are manipulated by HFT algorithms run by the major investment banks.
These banks and their trading robots that now make up over 80% of all daily trading volume on every exchange.
They do not buy or sell stocks based on a company’s value. They simply trade stocks back and fourth between each other scraping pennies off the top, and picking the pockets of American’s that still think they’re investing in an honest open market.
Now in addition to the robots mucking up the market, you now have Washington DC stirring up the pot through the “PPT,” or “Plunge Protection Team,” as they are commonly called.
Signed into life by President Ronald Reagan in 1988 under Executive Order 12631, the PPT was established explicitly in response to events in the financial markets surrounding October 19, 1987 (“Black Monday”), to give recommendations for legislative and private sector solutions for “enhancing the integrity, efficiency, orderliness, and competitiveness of US financial markets and maintaining investor confidence.
Former Federal Reserve Board member Robert Heller stated in the Wall Street Journal that, “Instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thereby stabilizing the market as a whole.”
These “saves” by the Fed have been witnessed more and more since the crash of 2008, especially when the markets are about to breach critical technical points to the downside. Whenever that’s about to take place, a mysterious buying force comes in during the final hour of trading and “saves the day.”
Given all of this, why in the world would I, (or anyone for that matter), choose to place my money and retirement funds into a rigged con game?
I wouldn’t, and especially after this recent experience, I won’t.
Just as trust in our leadership has been lost, trust in the market has been lost, and I think you’d have to be crazy to put the majority of your money into the hands of these exchanges.
I view the paper markets as nothing more than a financial version of Las Vegas. The only money I’ll ever place into them, is money I could afford to lose at the roulette table.
Today, I prefer hard tangible cash-producing assets I can physically own like precious metals, housing, farms, oil wells, or stakes in private companies.
So here’s how things have worked out so far…
DISCLAIMER: Current and past investment performance is not a guarantee of future results. The following investment results pertain to Mike Dillard's personal investments only, and should not be considered an endorsement of these strategies, or partners. They are provided here for illustrative purposes only. All investments are currently held, and may increase or decrease based upon market conditions. Every investment involves risk and the potential loss of money. You should not make any financial decision without the guidance for a qualified and licensed financial advisor.
Investment #1 – Precious Metals: +253.7%
My first investment was in precious metals back in 2008, when the silver spot price was at $8.88/ounce, and gold spot was at $818/ounce.
As of January 15th, 2013, that’s a total return 253.7% in silver, and 105.4% for gold.
In 2012, gold returned 8.3%, and silver returned 4.1%.
Investment #2 – “Cash Flow Banking”: +5.88%
To keep a long story short, we use the “Cash Flow Banking System” as a holding tank for cash instead of a savings or money market account.
This is a little-known investment system that mutates the purpose and use of life insurance to provide us with some pretty incredible abilities…
The purpose is not to own life insurance, of which we buy the least amount possible.
The purpose is to take advantages of the qualities a life insurance policy can provide when structured in a very specific way. There are probably less than 200 people in the US who know how to do this.
When done correctly, this system can…
- Provide you with a guaranteed return, without risk of principle, which means you won’t lose your money if the markets “crash” again.
- Grow your investment by a competitive annual rate of return (currently 2%-10%).
- Allow you to take out loans against your Cash Flow Bank balance for any purpose you want. It requires no application or approval process to take out a loan. You simply fill out a form requesting the amount you desire.
- Provide protection against creditors (in most cases), so you’ll never have to worry about losing your money due to a lawsuit or bankruptcy.
- Unlike 401K’s or IRA’s, there’s no limit to how much you can invest.
- Provide an estate-planning component built right in to the product.
- Allow easy access to your money within a few days.
- Provide you access to your money in the event of a disability.
- Allow you to pull out 100% of your money TAX FREE when you decide to retire.
So every month I automatically add money to this account. While it’s sitting there, it’s making an average return of around 6% per year as of the time of this writing.
When I’m ready to invest in a new project like an apartment complex, I take a loan out against that money.
The insurance company loaned me the funds at 4.2%. 100% of the principle is still sitting in the account making an average of 5.88%, which means I’m making an additional 6.05% ROI through this system.
This is how I made my third investment, which was an equity share in an apartment complex in San Antonio.
Investment #3 – San Antonio Apartment Complex: +11.25% & +37%
Now I’ll readily admit that I don’t know much about investing in real estate. I spend my time doing what I do best, which is building businesses, so having access to an incredible team who are some of the best in the business when it comes to real estate is essential.
Fortunately, there is just such a group here in Austin.
In 2011, I made my first investment with them, and through the third quarter of 2012, my annual cash-on-cash return for the property is 11.25%. Investors’ projected internal rate of return (in the event of a sale of the property) is already at 37%.
Investment #4 – Oil Field Work Camp Housing: +56.45%
You’d have to be living under a rock if you haven’t heard about the massive oil and gas boom taking place around the US over the past few years.
In many ways, it’s akin to the California gold rush back in the 1800’s.
After the real estate bubble popped in 2007, two of my friends in the industry started looking for new opportunities, in today’s new economy.
That opportunity came in the form of mobile housing developments for the oil field crews who typically work in the middle of no where.
Within the first six months, this investment has returned an incredible 56.45%.
Investment #5 – Founding A New Business: +7,500%
By far and away, the best investments Robert and I have ever made, have been businesses. Nothing else has ever come close to the ROI they’ve produced.
I started The Elevation Group, LLC in 2010 from my bedroom as a hobby with nominal expectations. My goal was to simply turn my new passion for economics and investing into a business that could pay the bills.
Last month we celebrated our two-year anniversary, and this little hobby has turned into a mission to change the world. Today we have almost 20 employees.
One of the interesting observations that we’ve made through The Elevation Group, is that every single wealthy individual we’ve interviewed, owns a business.
Every single one.
This hold true for the actual investing gurus of the world as well…
Look at Porter Stansberry, (whose work I love)… We all know Porter does extremely well with his investments, but I’m quite sure they pale in comparison to the $500 Million+ in annual revenue his company produces.
I think it’s safe to assume the same holds true for Doug Casey, Michael Maloney, Bill Bonner, Mark Ford, and Robert Kiyosaki as well.
If you want to become wealthy, you must start a business. Period.
In Addition To The Failures And Successes,
2012 Also Provided Some Truly Fantastic Memories…
Just last week I was honored to stand next to Robert and Stephanie on a beautiful beach in the South Pacific as they tied the knot…
They met a year ago through one of Robert’s consulting sessions, and at one point during the first meeting, Stephanie mentioned she had modeled her life after the lead heroine in Atlas Shrugged, Dagny Taggart.
Well little did she know, but Atlas happened to be Robert’s favorite book. In fact, it was the very first gift he gave me when we met for the first time, and I consider it required reading for any aspiring entrepreneur.
Their engagement a few months later inspired another moment of 2012 I’m fond of…
Knowing that Atlas was at the center of how they met, I tracked down Nick Gaetano who did the cover art for the book. Calling him out of the blue, I asked if I could commission an original piece by him as their wedding present.
He obliged, and we surprised the two of them with this a few days before the wedding…
The ceremony was incredible, and their relationship sets the standard in every way possible…
Another highlight I’m particularly proud of, is the focus on charity The Elevation Group has had over the past 12 months.
We were blessed with an incredible 2011, and wanted to pass that success forward in 2012, which we did in a very big way.
Thanks to your support, we were able to donate $120,000 to Richard Branson’s Virgin Unite program. From wildlife conservation, to clean drinking water, Virgin Unite is dedicated to showing that businesses can, and must, be a force for good. An example we are excited to support, and aspire to follow…
We were also able to contribute $70,000 to the Make-A-Wish Foundation, bringing the wishes of 14 children with life threatening illnesses and their families to life during 2012.
Last month, we were surprised and honored to find out that The Elevation Group will be named the, “Make-A-Wish Outstanding Corporation of The Year”, for 2012.
What’s In Store For Myself and EVG In 2013…
Personally, my big focus during 2012 was to shed waste and pursue my passion and interest in creating a self-reliant lifestyle.
In good times, the purpose of my modest little ranch is to have fun with friends and family, and to demonstrate how we are moving back toward a model of living based on “self-reliance”, which is a core value of The Elevation Group and its Members like you…
In fact, we’re going to refer to it as the “EVG Lifestyle” in the coming months and years…
I believe that the symbol of wealth in American today is no longer about the size of your house, or the price tag of your car, but rather your ability to create self-reliance in your life, as it represents the last foothold of personal freedom we have.
The reason so many people have been hurt during this economic crisis, is because they have given responsibility of every aspect of their lives to others, creating dependencies that have catastrophic results when that dependency is disrupted…
For the most part, the average American family…
Does not make their own money because they are dependent upon an employer.
Does not make their own investments because they are dependent upon a financial adviser.
Does not put their own food on the table because they are dependent upon a fragile food distribution system, which transports everything in from different cities, states, or even countries.
Does not drink clean, unpolluted water because they are dependent upon a city water system which is filled with pharmaceutical drugs, and toxic fluoride, or shipments of bottled water.
Does not educate their own children because that responsibility has been given to the government.
Does not have a say in the laws that are passed, because they have allowed the political system to be purchased by special interest groups.
Does not have the ability to maintain their health, because that responsibility has been placed into the hands of drug companies who profit from your illness, not your vitality.
Does not have the ability to heat their own homes because they are dependent upon power from the electric grid, or oil from fuel trucks.
The American people have completely lost every shred of self-reliance, which is what gives you the strength and ability to make choices, which are independent of outside influence.
When you are dependent upon others for the very necessities of life, you are nothing more than a voluntary slave to the people who control those systems.
The continuing economic crash, which began in 2008, was a wake-up call to the world… If you do not take personal responsibility for critical aspects of your life such as your money, food, freedom, or health, it will be taken from you.
Every single day, more and more people around the world are waking up to this fact and they are taking action.
Whether it’s taking personal responsibility for your retirement and investments, starting a garden in your back yard, purchasing a weapon for self defense, buying an emergency food supply, or taking your home of the grid and onto solar…
People are waking up, and they taking control of their lives back one simple step at a time…
While EVG has been focused on the financial side of this movement, our primary purpose is to create and promote “Freedom”, in every aspect of our lives by removing dependencies and creating self-reliance.
Once again, my goal is to lead by example and inspire as many of you as I can to increase the amount of self-reliance and freedom in you life.
Thank you for the opportunity…