GuruFocus.comAugust 27, 2020
– By James Li

According to top 10 holdings statistics, a Premium feature of GuruFocus, the top five holdings of Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) as of the second quarter were Apple Inc. (NASDAQ:AAPL), Bank of America Corp. (NYSE:BAC), Coca-Cola Co. (NYSE:KO), American Express Co. (NYSE:AXP) and The Kraft Heinz Co. (NASDAQ:KHC).

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Buffett, who is celebrating his 90th birthday on Aug. 30, studied under the legendary Benjamin Graham at Columbia University in 1951. The “Oracle of Omaha” purchased Berkshire Hathaway, which was then a textile manufacturing company, during the 1960s. Under his leadership, shares of Berkshire averaged a 21.4% compounded annual gain in book value per share from 1965 to 2006. The Omaha, Nebraska-based insurance conglomerate’s market cap stood at approximately $519 billion on Thursday.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter
Buffett follows a value investing strategy based on his mentor’s approach. The legendary guru and his co-manager, Charlie Munger (Trades, Portfolio), seek companies using a four-criterion approach to investing: understandable business, favorable long-term prospects, operated by honest and competent people and available at a very attractive price.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter
As of the June-quarter filing date, Berkshire’s $202.41 billion equity portfolio contains 44 stocks, with one new position and a turnover ratio of 1%. The top three sectors in terms of weight are technology, financial services and consumer defensive, representing 45.76%, 31.72% and 15.01% of the equity portfolio.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter

Berkshire owns 245,155,566 shares of Apple, unchanged from the first-quarter filing. Shares occupy 44.18% of the equity portfolio, up from the previous quarter’s weight of 35.52%.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter
On Thursday, shares of the Cupertino, California-based tech giant closed at $500.04, down 1.20% from Wednesday’s close of $506.09. Berkshire has gained over $80 billion in its investment in Apple since initially buying shares during the first quarter of 2016.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter
GuruFocus ranks Apple’s profitability 10 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and margins and returns that are outperforming over 95% of global competitors. Despite this, Apple’s valuation ranks 1 out of 10 on several signs of overvaluation, which include price-book and price-sales ratios near 10-year highs and are underperforming over 90% of global hardware companies.

Bank of America

According to GuruFocus Real-Time Picks, a Premium feature, Berkshire owns 1,032,852,006 shares of Bank of America as of Aug. 4, giving the stake 14.57% weight in the equity portfolio.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter
GuruFocus ranks the Charlotte, North Carolina-based bank’s financial strength rank 3 out of 10 on the back of debt ratios underperforming over 64% of global competitors despite equity-to-asset ratios outperforming over 56% of global banks.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter

Berkshire owns 400 million shares of Coca-Cola, giving the position 8.83% weight in the equity portfolio.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter
GuruFocus ranks the Atlanta-based beverage giant’s financial strength 5 out of 10, weighed down by debt-to-equity ratios near 3 and underperforming 94% of global competitors despite a strong Altman Z-score of 3.43.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter
American Express

Berkshire owns 151,610,700 shares of American Express, giving the holding 7.13% weight in the equity portfolio.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter
GuruFocus ranks the New York-based credit card company’s financial strength 3 out of 10, weighed down by equity-to-asset and debt-to-equity ratios underperforming over 68% of global competitors.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter
Kraft Heinz

Berkshire owns 325,634,818 shares of Kraft Heinz, giving the position 5.13% weight in the equity portfolio.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter
GuruFocus ranks Kraft Heinz’s financial strength 4 out of 10 on several warning signs, which include a weak Altman Z-score of 0.79 and debt ratios that are underperforming over 60% of global competitors.

Warren Buffett’s Top 5 Holdings as of the 2nd QuarterView photos
Warren Buffett’s Top 5 Holdings as of the 2nd Quarter
See also

The following video summarizes Berkshire’s top holdings.

Disclosure: The author is long Apple as of this writing. The mention of holdings in this article reflect data as of the June filing and does not include trades made in July-August.

Read more here:

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Warren Buffett: Signals a Huge Market Crash Is Coming
The Motley Fool
Christopher Liew, CFA
The Motley FoolAugust 27, 2020
Tired or stressed businessman sitting on the walkway in panic digital stock market financial background
Tired or stressed businessman sitting on the walkway in panic digital stock market financial background
Are investors falling into a trap with the stock market stalking new highs? The highs seem to suggest uncertainty no longer dominates the investment landscape. But if you were to look at Warren Buffett’s recent moves, the GOAT (greatest of all time) of investing is preparing for something else — a huge market crash.

The chief at Berkshire Hathaway was never charmed by the glitter of gold. However, Buffett made a turnaround and took a position in Barrick Gold. His conglomerate bought $21 million shares of the gold producer from Canada. Simultaneously, he ditched his entire stock holdings in an investment banking giant and trimmed his stakes in bank stocks.

New reality
Some experts warn the stock market rally is not a reflection of the broader economy anymore. Canada’s economy remains in a precarious state, despite recouping 50% of jobs lost in March and April 2020. If Warren Buffett is undergoing a conversion and shifting to gold stocks, it signals unique risks.

Buffett’s sudden change in stance appears directed to a new reality. Expensive stimulus packages are pushing deficits to unprecedented levels and swelling national debts. Canada is on track to post a $343 billion deficit this year, and the government projects federal debt to top $1.1 trillion in 2020-21.

Buffett’s stock holdings
Buffett’s investing process is on full display, although some of his moves are surprising. As of June 30, 2020, gone are his holdings in Goldman Sachs and Canadian quick-service restaurant chain Restaurant Brands International. Berkshire added more Bank of America shares and reduced stakes in J.P. Morgan Chase and Wells Fargo.

Berkshire also bought $5.1 billion worth of its own stock — a record amount and the most ever in a single period. Barrick Gold is the only new addition to Buffett’s portfolio. The gold stock also replaces Restaurant Brands as one of only two Canadian stocks in the basket.

Bellwether energy stock
Suncor Energy (TSX:SU)(NYSE:SU), the $31.86 billion integrated energy company from Calgary, remains in Buffett’s stock portfolio, despite the continued underperformance in 2020. This energy stock is struggling and losing 49.68% year to date, while Restaurant Brands is down by 12.34%.

Many ask if Suncor is due for a breakout. The oil sands king posted consecutive quarterly losses in 2020. In Q1, the company reported $309 million in operating losses compared with $1.2 billion operating earnings in Q1 2019. For Q2, the net loss was $1.489 billion versus the $1.25 billion net profit in Q2 2019.

Management said the low demand for crude oil and refined products plus the OPEC+ increase in supply caused a significant decline in commodity prices. However, Suncor made considerable progress in reducing operating and capital costs in Q2 2020. It remains on track to achieve the $1 billion operating cost reduction and $1.9 billion capital cost-reduction targets by year-end.

Losing value
The former bellwether energy stock recently cut its dividend by 55% as a prudent move. Suncor is paying a 3.84% dividend, although it’s a high-risk investment prospect. With plunging oil prices and deteriorating global demand, Buffett might dump Suncor next, as he re-balances his portfolio before the next market crash.

The post Warren Buffett: Signals a Huge Market Crash Is Coming appeared first on The Motley Fool Canada.

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Podcast Keyword Strategies explained
The Fine Art of SEO Keyword Strategies
Keyword strategies fail if you select keyphrases that are too popular. In this post I’m covering some SEO tips and research strategies that have emerged from discussions we’ve had with many of our blogging, content marketing and podcast production clients. The good news, unlike in years past, is that almost all of our clients consider SEO a “must have” component of running a podcast or blog. And for many, their blog or podcast serves as the central inbound marketing component for their site, driving traffic and increasing their e-mail lists.

But understanding of SEO keywords strategies and finding good keyphrases often starts with this mis-conception:

I just need to find a popular keyword that lots of people are looking for, and then optimize my post for it.

1.) The dangers of being too popular
It might seem quite easy to imagine a popular keyword that you want to be found for. Why not try and optimize a podcast episode for the keyword “podcast” for example? A popular term, 350K searches a month. Would that not drive lots of traffic to your site?

The answer is yes, but only if your site can rank in the top 50 search results for this keyword.

An example of a futile keyword strategySuggestion: Click here to do a search for the word “podcast” on google right now, and look at the top 10 results. Who are the sites ranking in the top 10? That’s right, Wikipedia, Apple, NPR, The Atlantic, etc. In other words hugely popular sites.

Now ask yourself, on which page of the search results do you think your own post would show up?

That’s right, page 200+ or something like this, unless you have a massively popular site. And when was the last time you looked at or clicked on anything beyond page 2 of a google search result?

The lessons and implications are this:

Do not try to rank for hugely popular keywords. You will not be in the top 50 search results, and therefore your post will not generate any organic search traffic to your site.
You need to research keywords and keyphrases in order to know if they are in fact “too popular” for your post to rank for them.
You need to have an idea about how your site ranks, in other words who it can compete with. Without this information, you are flying blind
No worries though, we will cover all of these considerations in this blog series.

2.) Is there such a thing as being “too niche”?
OK, so in our previous example, the keyword “podcast” seems very generic, and we’ve realized it’s unlikely we can rank our post for it. So what about the other extreme? Maybe it will be easier to rank for a key-phrase that is very specific?

keyword strategies example using Google AdWordsAssume for a minute we optimize a post for the term “health tips for dads”. And a few days or weeks after we published the post, HOORAY, we are ranking on the top 1-2 pages for this post!

Mission accomplished? Well no, hang on…

How many people a month do you think are looking for this term? Oh, sorry, a quick peek at Google Adwords reveals that this term is searched for 0 times a month, which is exactly how much traffic this keyword choice will generate.

The lessons and implications are this:

You may rank in the top 10 search engine results, but that does not mean you will get traffic from a keyphrase that is too niche.
3.) So what’s the answer then?
Finding the right fit for your keyword strategies The answer is finding a fit: To identify keywords and key-phrases commensurate with the search engine power of your site overall.

Some rules of thumb we follow for keyword research success:

The rule of thumb we follow is that if you have a brand new site with little traffic (Under 2000 sessions a month), try and find key-phrases that have at least 70 searches a month, but stay under 300 searches a month.
If you have a popular site at least 1-2 years old with 5000+ month visitor sessions, perhaps you can rank for key-phrases with 300+ searches a month.
But to rank for content that has 1000+ searches a month, you need your site to have both a lot more traffic.
Ask yourself, is it better to be on page 100 for a keyword that is popular, or on page 1 or 2 for a keyword that is un-popular, but that people are still looking for 100 times a month?

4.) Some other ways to determine your overall site rank

Have a look at Alexa rankings, there you can look up your site’s rank for free. Keep in mind, these are my personal educated guesses based on our experience, I would love to hear from you if you manage to “break the ceiling” of these rather cautionary numbers.

Alexa is a great toolset, and if you sign up for the free version you can create charts and comparison graphs to track your site’s rank vs your competitors.

Our “educated guess” rules of thumb here are as follows:

New sites are typically ranked 5million or higher. If you are, stay with key-phrases that are searched for at most 70-100 times a month.
If your site is ranked above 1.5Million on Alexa, you can likely rank for key-phrases that have 300 monthly searches and above.
If your site is ranked above 500K on Alexa, you can likely rank for more popular search terms and key-phrases that have 1000 monthly searches or more.
5.) How can you tell the number of searches a month for any given key-phrase?
Using Google AdWords for keyword strategiesNotice that earlier we mentioned checking up on how many times a month people search for a specific key-phrase. This is super valuable information, but how do you do this? The answer is Google AdWords. If you have not ever placed any pay-per-click ads with Google before, you may be unfamiliar with the platform, but it is free to use and has the best keyword research tools available for free.

Our advice on this one: sign up for an AdWords account, even if you don’t intend to do paid advertising

The sign-up process is a pain, as it requires a credit card and the only way you can sign up is to launch your own initial PPC ad, but you can simply pause the ad as soon as you launch it, and it won’t cost you a cent. The process may be scary, but it is definelty worth it.
6.) The Concept Of Keyword Difficulty
Keyword Difficulty

Keyword difficulty is a data concept and score that shows you exactly how hard it is going to be to rank in the top 10 search results on Google or other search engines. It does so by investigating the sites that show up in the top 10 results of google, and then comparing their SEO maturity and rank to your own. So a low keyword difficulty score is better, it means that you are more likely to be able to compete with the sites in the top 10 search results. A high score means that the top 10 search results are occupied by popular sites that you will have difficulty competing with.

Keyword difficulty tools we use provide a range of information about your competitor sites that currently occupy the top 10 search results. Domain age, # of incoming links, Alexa ranking and social signals are all able to pinpoint “weak competitors” currently showing up in the top 10 search results. Using these tools as part of our SEO services, and selecting “the right” keywords using the keyword strategies outlined above, we can often quickly accurately create a recipe that places a post or podcast episode into the top 10 search results on Google and other search engines.

Giving away all our secrets, but here are some of the keyword difficulty tools we use for this:

Here is the Link Assistant Keyword Difficulty Tool I use
Here is SEMRush’s keyword difficulty tool
All in one approach to keyword strategiesAre there any “All In One Solutions” ?

My Favorite new tool here to tie all the above elements together is KW Finder
The KW platform is an all-in-one solution that allows you to conduct research for your keyword strategies. You get insights into keyword difficulty and competition all in one place. See a screenshot in the image:

A Word About App Store Optimization
When we’ve been talking about keyword optimization, it’s been largely about being found on the web. What about being found on the app store? This is generally called ASO or app store optimization.

Within Apple Podcasts, there are only limited places where you can ensure that people can find your show.

The title of the podcast is the most important one, but keywords are difficult to embed there unless the title of your show lends itself to this. Keywords within the description of the podcast are not indexed, and therefore people cannot easily find you with these on Apple Podcasts. However, and often overlooked place to embed keywords relevant to your show is the Author Title Tag.

Tip: Use the author title tag to embed keywords for your title.

Here is an example of a podcast we produce called “The Chief Customer Officer Human Duct Tape Show”. Notice how the name of the podcast host includes keywords that are significant for her business.

Spending just a little time on learning the above keyword research tips can have a major impact on your site traffic. It may seem overwhelming at first, but studying this for an hour or two a week is all it takes.

What are some keyword research approaches that are working well for you?
We would love to hear from you about what is and what isn’t working for you.

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| Podcasting

Yeah baby! Two of my podcasts ranking high in the competitive “Technology” category on iTunes.
Yeah baby! Two of my podcasts ranking high in the competitive “Technology” category on iTunes.

I launched my first podcast in 2008, way before podcasting was even remotely cool. I’ve had some very successful podcasts and some podcasts that were failures. In this post I want to share some numbers with you that may help you to know what to expect in terms of download numbers for a new podcast.

A podcast episode that has been live approximately 30 days averages 141 downloads. If you have over 3400 downloads you are in the top 10%. If you have over 9000 downloads you are in the top 5%. Lastly, if you have over 50,000 downloads per episode (again after having it live for 30 days) you are in the top 1%.

~Rob Walch, VP of Podcaster Relations at Libsyn (As quoted by

25 Real-World Examples of Podcasts and Their Download Numbers
The Improve Photography Podcast – 24,000 downloads per episode. This podcast is one of the largest (if not THE largest) photography podcast out there. It is currently in its third year of running and is backed by a large social media following of over 1 million followers. This is my most successful podcast, and it has 1,000 positive reviews in iTunes.
Entrepreneur Tips Podcast – 300 downloads per episode. This show was launched with the best efforts of the podcaster, but the show never really caught traction. There was no independent audience on the website before the podcast was launched. This is a VERY VERY common scenario to see from a new podcaster without an established audience who is just relying on posting on their own personal social media, commenting on blogs, and hoping for new and noteworthy in iTunes. It probably won’t work well.
Photo Taco Podcast – 7,700 downloads per episode. This is a short-format podcast of about 15 minutes in length. It is supported by a large website as well. The show is growing steadily in popularity. This is a show that I own, and which is run by an independent host.
Weekend Games Podcast – 20 to 30 downloads per episode. They are 45 episodes into the show. It dropped about 20% of its downloads after it left new and noteworthy.
LSAT Prep Podcast – 1,000 downloads per episode. This was an interesting podcast. The host basically helped college students who were preparing to go to law school to take the LSAT. The show had a very niche audience, but a very interested audience. The trouble with the show is that as people took the test, they stopped listening. However, 1,000 downloads per episode was really quite good considering how valuable this audience of pre-lawyers is. This podcast was launched without an existing audience.
Home School People Podcast – 750 downloads per episode. This show was backed by a small niche site that was getting fair traffic. The show had good content and the podcaster had many popular hosts in the industry as guests, but he never quite hit critical mass and the show fizzled.
The Art of Charm – 80,000 downloads per episode. This is one of the top 40 podcasts in the world.
Hair Dressers Unite! – 200 to 300 downloads per episode.
Business From Home Podcast – 80 to 90 listens per episode even while in the new and noteworthy section. The show fizzled out.
Tripod Podcast – Variable between 10,000 and 25,000 downloads. This show varies quite a lot depending on how the show performs as a youtube video. If a particular episode is amenable to video as well as audio, the video episode often does very well. This is one of my podcasts.
School of Podcasting – 1,200 to 2,000 downloads per episode (reported a couple years ago). This is an excellent podcast with great information and is worth a listen.
Ding Dong Podcast – 500 downloads per episode
Religion Answers Podcast – 200 downloads per episode. This show had two hosts who talked about religion. The content of the show was good, but the show simply didn’t gain traction. The hosts were just never quite sure how to get the show in front of a larger audience.
The Audacity to Podcast – 7,500 downloads per episode according to this post. This is for a popular show which has been running for years.
Being Honest with My Ex – 700 downloads per episode while in the new and noteworthy section still and 3o episodes.
Portrait Session Podcast – 5,000 downloads per episode. This is one of the podcasts that is done by excellent independent hosts on my podcast network.
Note, while all of the above examples are real, some of the names of the podcasts have been changed for privacy reasons since I didn’t ask permission from some of the people before posting.


Podcasts are Booming, But Downloads are Declining for New Shows
There are tons of podcasting courses out there today filling entrepreneurs’ heads with the idea that podcasting is basically a huge gold rush. It really isn’t–at all. The truth is that when I launched a podcast several years ago, I could expect 1,000 downloads per episode just by being on new and noteworthy.

Now, I’m seeing most new shows without an established audience working really hard to get 200 downloads an episode if you don’t have an established audience. In 2013, there were 100 podcasts being launched PER DAY on iTunes. Now, there are more like 350 new shows a day.

[x_skill_bar heading=”Number of new podcast feeds launched per day in 2013″ percent=”330″ bar_text=”100″]

[x_skill_bar heading=”Number of new podcast feeds launched per day in 2016″ percent=”750″ bar_text=”350″]

The market is tough. If you don’t have a really clever launch strategy using some advanced techniques, you aren’t likely to make it. Don’t get me wrong. I think podcasting is amazing. I just know that the competition is tough, so you really have to up your game in order to make it.

How I Tripled My Podcast Downloads Overnight
I have been frustrated for years by the fact that I spend time preparing for a podcast episode, schedule with others to be guests on the show, and then record the show for an hour and then it only goes out in audio format. I tried and failed multiple times to create an audio and video version of the show at the same time–but I’ve finally figured it out.

Now, when I create a show, it goes out as a normal audio podcast, it’s posted on Youtube as a video, AND I live stream it on Facebook Live! The day I flipped that switch, my download numbers doubled or tripled (depending on the episode). It was AWESOME! I’d busted my butt for years trying to get more listeners and then this one change yielded immediate results.

I definitely believe 100% that if you’re launching a podcast in this market, you absolutely must do more than just putting it on new and noteworthy and hoping to see downloads. Frankly, it’s unlikely that you’ll succeed that way.

I created an audio course called Podcast Advance that walks you through the tips I use to market my podcasts and how I’m producing multiple versions of the same podcast on different platforms. I priced Podcast Advance way too low just because I’m excited about it and really want this information to get out there to more podcasters. You can pick up the Podcast Advance audio course here.

The things I’m teaching in Podcast Advance are not theory. It’s the exact techniques I’ve personally used to create one of the top 10 shows in my iTunes category which brings in a substantial and steady income from advertising and other revenue.

Two Important Notes About How to Count Podcast Downloads
Just so the real-world examples below make sense, I have to be clear on how I’m measuring downloads. People have different definitions, so I want you to be able to compare apples-to-apples.

Downloads for a podcast EPISODE are typically measured by the number of downloads the episode gets in the first 90 days after it is released. That is the standard method for determining numbers for reporting to advertisers on a show.

It’s very common for a podcast to get many thousands more downloads on the first episode of the podcast than on any other episode, because as people find your podcast years down the road, they may like it and download all episodes–usually starting with episode one. That doesn’t really count. Only the downloads in the first 90 days count toward the industry-standard download counting method.

Second, you’ll likely see large variations in how downloads are counted between platforms. I switched one of my podcasts from Libsyn to Blubrry and saw a slight reduction in the number of downloads (about 4%) simply because Blubrry is a little more strict about how they count downloads from bots or multiple downloads from the same IP address. Then I switched all of my podcasts over to Soundcloud for hosting and there was little change.

Blubrry, Libsyn, and Soundcloud all have different algorithms, but they are all very well-regarded platforms. If you’re using a random lesser-known podcast host, you may be seeing numbers that are GROSSLY inflated if the platform doesn’t cut out spam and repeat downloads to the same device.

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The company is developing brain-machine interface technology

By Jon Porter and James Vincent Aug 26, 2020, 5:06am EDT
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Image: Neuralink
Elon Musk has said that his secretive neurotech firm Neuralink will demonstrate a working “device,” presumably a brain-machine interface, at 6PM ET on Friday. Musk has spoken repeatedly about his belief that BMI devices are needed to help humans keep up with AI by supplementing our brainpower, but right now, his goal is much simpler: to create an implantable device that lets people control phones or computers with their mind.

Musk initially announced the August 28th “progress update” back in July, and has now offered more details on what will be shown. He says the update will include the unveiling of a second-generation robot designed to attach the company’s technology to the brain, and a demo of neurons “firing in real-time,” though it’s not clear exactly what is meant by this.

Even compared to Musk’s other ventures like Tesla and SpaceX, Neuralink is ambitious. The company wants to connect to the brain using flexible electrodes thinner than a human hair that it calls “threads.” Current BMI devices use stiff electrodes for this job, which can cause damage. But inserting flexible electrodes is a much more delicate and challenging task, hence the company’s focus on building a “sewing machine” like robot to do the job.

Eventually, Neuralink hopes to make the installation process for BMIs as non-invasive as Lasik eye surgery, even removing the need to use general anesthetic. Musk has previously spoken about the need for an automated Lasik-like process for BMIs to overcome the constraints and costs involved with needing to use highly trained neural surgeons. But this isn’t ready to be shown off yet, according to Musk. “Still far from LASIK, but could get pretty close in a few years,” Musk tweeted in response to a followup question about the event.

Many scientists have welcomed Musk’s involvement in this medical field, because of the huge potential of BMIs to help paralyzed individuals and those with neurological disorders. Others have cautioned that his claims for the future utility of these devices are far from proven, and his timescales for progress overly optimistic. Neuralink said last year it would start clinical trials by the end of 2020, but has not given any further updates on this goal.

Neuralink is yet to officially announce how you’ll be able to watch Friday’s event, but keeping an eye on the company’s YouTube channel seems like a safe bet.

Garrett Gunderson

I write about wealth-building and personal finance for entrepreneurs.
image of the corner of a one hundred dollar bill
Photo by Giorgio Trovato on Unsplash PHOTO BY GIORGIO TROVATO ON UNSPLASH
The greatest wealth transfer in history will take place over the next three years. What does this mean for you? It means now is not the time to blindly hand your money over to Wall Street or bury your head in the sand. Your 401(k) won’t save you in this COVID-19 world.

As our economy continues to be pumped with money, the money will end up in the hands of only a few, redistributing wealth and creating even more of a wealth gap. Do you know where your money is going to end up? In the hands of people who know how to get rich. Even during the Great Depression, when one-third of Americans were financially devastated, more millionaires were created at that point in time than at any other time in American history (adjusted for inflation).

The same is true now: one-third of Americans have and will be hit hard by the pandemic and the recession; one-third will be able to maintain their lifestyle, but it will be increasingly tougher to do so; and one-third of Americans will get much richer.

Which group will you be in?

If you want to be part of the third that gets rich, here are three things to keep in mind.

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Making money is one thing. Keeping it is entirely different. As we navigate this pandemic and the ensuing wealth transfer, cash is going to be king. Opportunities will be available, but only to those who have liquid capital available to bail out needy business or home owners. If you are automatically allocating money to plans that lock your money away or require performance from a stock market you have no control or expertise over, plan on a bumpy (and disappointing) ride.

Automatically save, but deliberately invest. This isn’t about setting it and forgetting it or investing early, often and always, instead it is about having cash on hand to capitalize on opportunities. You must focus on cash management and cash flow, but people paid commissions won’t be able to tell you this- it is a threat to their income.

Let me break this down to five levers you can pull in order to become a better cashflow investor—and don’t worry, these are about leveraging knowledge, not capital.

#1: Plug The Leaks
You can keep more of what you make without cutting back. Look to save on taxes, interest, investment fees (especially on non-performing investments), and insurance. Make sure you don’t have duplicate coverage or improper structures that are costing you more. There is substantial opportunity to save on tax. Due to CARES there are several IRS acts that may allow you to go back and amend your returns and get a refund.

#2: Know Your Costs
What are your monthly costs? Not necessarily to thrive, but just to live. You can’t achieve financial independence—having income from assets cover your basic costs—until you know what those basic costs are. Once you have that piece, you can work backwards to create the cashflow necessary to cover your costs and invest money you earn back into yourself. Once you know your costs, differentiate your expenses.

There are 4 types:

1- Destructive, eliminate those.

2- Lifestyle, manage those and pay cash.

3- Protective, having cash is part of this as well as asset protection and insurance.

4- Productive, these are investments that when you put in a dollar more than a dollar comes back to you.

#3: Accelerate Investment Income
Too many people have been trained to save 10% and attempt to earn a 10% return on that money. That approach has been leaving people well short of their retirement goals for decades now, and it’s only going to get worse in a post-COVID world. So, stop looking at easy or automatic investments like mutual funds and shift your focus to investments that create cashflow from day one. Another note, protect the downside. Focus on risk management and mitigation. Stop gambling with your money. If you don’t know how you benefit now and in the future, when it is a good time to get out and be in cash, or if you think high/risk=high/return, you are on the wrong side of the equation. You are taking risk while others get a return. Instead, look to make money on the buy, create cash flow from day one and be patient. Rookie investors always stay invested, pros sit on the sidelines until the opportunities are right.

#4: Scale Business Revenue
Your best investment is likely your business. You may even consider buying complimentary businesses that have people retire or simply didn’t manage their business properly and you can buy it for a deep discount. The economic turmoil and struggle is only at its beginning. The opportunities will be plentiful for the next few years.

#5: Make It Count
Money is a great benchmark when it is the context of ways to improve your life. What about money is important to you? What are the best uses of money for you? Invest back in yourself. Invest in the things that move the needle: marketing knowledge, emotional intelligence, financial IQ, and things that will be necessary to add substantial value to grow your wealth.

Make Sure Your Wealth Is Sustainable
In addition to prioritizing cashflow, take a look at your risks. This is what the pros do: they learn to manage and mitigate risk. Part of the new reality we’re going to face is that inflation is going to sting. The government is pumping trillions of dollars into the economy, without any value being created for those dollars, therefore, devaluing the worth of your dollars. You don’t have to be an economist to know a day of reckoning is coming.

Now is the time to protect your profits. How do you do that? By looking for assets, not stocks or funds. A lot of business will go on sale in the next few years. Could you buy one? If there’s already infrastructure in place and you can add value through your expertise, that investment could be profitable from the start. You could also invest in real estate, although I’d opt for residential real estate that people will be looking for no matter what the economy does.

The stock market is artificially inflated with the printing of money and automated deposits from retirement accounts AND the price to earnings and multiples are temporarily inflated. Those sitting in funds will lose. Hedge funds will sell short and take those dollars and it is time to be mindful and careful. This is your warning.

You Can Become Part of the Upper Third
No matter who you are, you can join the one-third of Americans who will get rich during the wealth transfer we’re about to experience. Most Americans talk about passive income, but what does that mean? It means the money passes them by on its way to make someone else rich. Take time choosing investments and be active in the selection, handing money over and relying on others that are paid more on commission than performance will be a costly mistake.

Now that you know what it takes, the only missing piece is action. There will be money to be made in the next three years. Will you be part of the third who captures it?

Check out my website or some of my other work here.
Garrett Gunderson
Garrett Gunderson

I am Chief Wealth Architect at Wealth Factory, author of the NY Times best-seller Killing Sacred Cows, and a Keynote speaker. Wealth Factory helps entrepreneurs optimize cash flow, streamline their finances and keep more of their hard-earned money so they can make more powerful investments in their best wealth creator: their business. I’ve appeared on ABC News Now, Your World with Neil Cavuto on Fox, CNBC’s Squawk on the Street and more — and my first firm made the Inc 500. Read more at and follow me on Youtube (, Facebook (@WealthFactory) and Instagram (@garrettbgunderson).

Updated Mar 13, 2020
Elon Musk has been hailed as a genius. He’s also been dubbed a “modern-day Tony Stark.” And, at this point, there are few who would doubt that he’s a talented entrepreneur. However, some amount of his notoriety is the result of his antics, especially his performances on the social media platform Twitter. In 2018, on April Fool’s Day, Musk sent out a series of posts on Twitter that joked that Tesla had gone bankrupt.

While some analysts and investors haven’t found Musk’s viral internet fame very entertaining, he’s been lauded by others for his willingness to engage with the public on a shared forum. Musk is also behind more than one company that has disrupted its respective industry. A list of some of Musk’s best investments includes PayPal Holdings, Inc. (PYPL), SpaceX, DeepMind (GOOGL), Tesla Inc. (TSLA), and The Boring Company.

Musk is the CEO and co-founder of Tesla and the CEO and lead designer at SpaceX. In 2020 alone, Musk has added $17 billion to his net worth and is ranked about 20 in a list of the world’s wealthiest individuals.

Elon Musk–engineer, industrial designer, and technology entrepreneur–is behind more than one company that has disrupted its respective industry.
Musk’s best investments include PayPal Holdings, Inc., SpaceX, DeepMind, Tesla Inc., and The Boring Company.
Musk has added more than $17 billion to his net worth so far in 2020.
PayPal has a notable roster of executives and investors. The popular online payment system provides an electronic alternative to traditional paper methods like checks and money orders. PayPal’s co-founders include Ken Howery, U.S. Ambassador to the Kingdom of Sweden and co-founder of Founders Fund; Max Levchin, an early investor in Yelp and the founder and CEO of Affirm, Inc.; and Peter Thiel, co-founder of Palantir Technologies and Founders Fund.

Musk no longer holds a stake in PayPal. He exited his position after the e-commerce company eBay purchased PayPal for $1.5 billion in 2002. Musk reportedly earned between $165 and $175 million in the sale. Musk had initially used $10 million to co-found, the precursor to PayPal. In 1999, Musk founded, an online financial services and e-mail payment company. A year later, the company merged with Confinity, which was later renamed PayPal in 2001.

Musk used most of the proceeds of his PayPal sale to found Space Exploration Technologies Corporation, commonly known as SpaceX. By most accounts, Musk spent over $100 million to found SpaceX in 2002.

SpaceX has been a remarkable success, both financially and in its technological innovations. NASA awarded SpaceX with a lucrative contract in 2006. In 2008, SpaceX launched Falcon 1, the first-ever private liquid-propellant rocket to reach orbit. In 2010, SpaceX’s Dragon spacecraft reached the International Space Station (ISS). In 2011, NASA granted SpaceX a second contract to help shuttle crewmembers between the International Space Station and Earth.

$39.5 billion
Elon Musk’s reported net worth, as of March 2020.

SpaceX is a private company so determining its valuation is more difficult. In 2019, SpaceX raised $1.33 billion from three rounds of funding. In February 2020, people familiar with the financing of the company told CNBC that SpaceX was seeking to raise $250 million at a price of $220 per share. This would raise the value of SpaceX to around $36 billion, up from $33.3 billion previously. It is one of the most valuable private companies in the world, and it ranks among the most in-demand of any pre-IPO companies.

Musk is still the largest shareholder and the CEO of SpaceX, and the company is now worth far more than the $100 million that Musk originally invested to form the company. If the company was ever taken public, it is likely that Musk would earn a huge sum.

SpaceX has made the idea of space travel exciting again for the collective imagination. The most recent round of fundraising is to continue the development of three ambitious programs: Crew Dragon, Starlink, and Starship. NASA has awarded SpaceX over $3.1 billion to develop the Crew Dragon capsule, which represents SpaceX’s efforts to fly humans into space. Starlink is also part of SpaceX’s efforts to fly people into space, but the project Starlink would entail creating a global network of about 12,000 small, interconnected satellites that would provide high-speed internet to any place in the world.

DeepMind Technologies
The artificial intelligence company DeepMind Technologies was launched in late 2010 with Musk as one of its key angel investors. In January 2014, Google announced it had acquired the company for an undisclosed amount, but it was speculated that the sale was between $400 and $600 million.

Musk is famously worried about artificial intelligence overtaking humans, and he is reported to have invested in DeepMind not to make money, but to give him a window into how fast the technology behind artificial intelligence was developing. Since the company was founded, it has focused most of its research on deep reinforcement learning. Deep reinforcement learning is an artificial intelligence technique that combines deep learning–primarily used for recognizing patterns–with reinforcement learning, geared around learning based on reward signals, such as a score in a game. DeepMind gave this technique its name in 2013 in a paper, which represented a breakthrough in the field of artificial intelligence.

DeepMind hasn’t found any successful commercial applications of deep reinforcement learning yet, although Alphabet has applied the technique internally as a method of reducing power costs for cooling Google’s servers.

Tesla Motors
Although Musk was not a founding member of Tesla, he led an early round of financing in 2004. In 2008, Musk went from being a board member to the CEO of Tesla, even though he was still serving as the CEO of SpaceX. On June 29, 2010, Tesla launched its initial public offering (IPO) on NASDAQ. Shares of common stock were available to the public at $17 per share. As of March 13, 2020, shares of Tesla are valued at $522.25.

The company’s mission is to accelerate sustainable transportation by introducing mass-market electric cars to the market. In November of 2017, Tesla announced the creation of fully electric semi-trucks, which were preordered by companies such as UPS and PepsiCo. The company’s affordable and high-quality electric vehicles include the Model S, the Model X SUV, the Model 3 sedan, and the high-end Roadster supercar.

Musk owns around 34 million shares of Tesla, or 19% of the company. In January 2020, Reuters reported that Musk was set to earn $346 million of stock awards as part of a performance-based compensation package. Musk does not earn any salary or cash bonuses; rather, he receives stock award options that vest based on the company’s market capitalization and other growth milestones.

The Boring Company
Musk founded the infrastructure and tunnel construction company The Boring Company in late 2016. The company was founded on the premise that traffic is awful; when there is miles and miles of unused earth beneath roadways, traveling above ground isn’t necessary. The company’s goal is to reduce the cost of tunneling while also speeding up production. Boring Company hopes to achieve this by making smaller tunnels and creating it own high-power Boring Machines.

In 2020, The Boring Company has projects underway in Hawthorne, Calif., Las Vegas, Los Angeles, Chicago, Washington D.C., and Baltimore. To fund the project, Musk announced that he would start selling The Boring Company branded hats. On December 16, 2017, Musk announced he had sold 42,000 hats and raised $840,000. After hitting his goal of selling 50,000 hats, Musk began selling the next branded Boring Company product: a flamethrower. Musk sold these flamethrowers for $500, and in just a few days, Musk had raised an additional $7.5 million.

In July 2019, it was announced that The Boring Company had received its first outside funding. The company raised $120 million by selling shares of its stock to early-stage venture capital firms. Prior to this round of funding, in May 2019, the Las Vegas Convention and Visitors Authority approved a $48.6 million proposal from The Boring Company to build an underground tunnel, called the LVCC Loop, that will travel underneath the Las Vegas Convention Center and feature three stations and a pedestrian tunnel. In February 2020, The Boring Company finished the first of the two planned tunnels in the loop. The project is anticipated to cost around $52.5 million.

Also in early 2019, The Boring Company released a 505-page report that detailed their plan to construct a link between Washington, D.C. and Baltimore via a high-speed transit system.

Elon Musk has had lots of success over the years and there is lots he can teach us about how to do projects better. In this article we will look at some of the principles that Elon Musk uses to get stuff done. After a brief introduction on who Elon Musk is the article will cover 6 things Elon Musk does to get stuff done.

By copying all or some of these things you will increase your chance of being successful and get stuff done. Even if you adopt some of the smaller changes on your projects you will see an increase in project success.

elon musk first principles

Who is Elon Musk
When I started the first internet company, Zip2, with my brother and another person, Greg Kouri, it wasn’t really with the thought of being wealthy. I have nothing against being wealthy, it was just from the standpoint of wanting to be part of the internet. I figured if we could make enough money to just get by, that would be okay. When we started off, we literally only had one computer, so it would be our web server during the day, and I’d be coding at night. And we just got a small office, in Palo Alto back when rent was not insane, and it cost us like $350 a month. It was cheaper than an apartment, so we just slept in the office, and then showered at the YMCA on Page Mill & El Camino. So we’d walk over there and shower.” Source:

South African born Elon Musk is the renowned entrepreneur and innovator. He has been behind many companies such as PayPal, SpaceX, Tesla, and SolarCity.

He started a pair of huge dot-com successes, including PayPal, which eBay acquired for $1.5 billion in 2002. Compaq purchased his first company Zip2 for $307 million. After selling PayPal he decided to go it alone and invested in rockets and electric cars.

SpaceX became the first private company to deliver cargo to the Space Station. It has also picked up billions of dollars of orders from NASA and others. The SpaceX landing of a spacecraft, back on earth, is the first of it’s kind. One of the reasons was the ‘reusable’ aspect which has reduced the cost of space travel. This lower cost could make it more viable to travel to Mars. It also makes it possible to travel to other parts of the Earth in a much shorter timeframe.

He also owns an electric-vehicle company, Tesla Motors. The company recently unveiled a new car which might become a flying vehicle!

How Elon Musk Does Project Management

1. Communication
elon musk problem solvingMusk encourages employees to buck the traditional chain of command. In most companies messages always flow through managers.
“Anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company,” he wrote. “You can talk to your manager’s manager without his permission, you can talk directly to a VP in another dept, you can talk to me, you can talk to anyone without anyone else’s permission.” Source:

Managers should work hard to ensure that they are not creating silos within the company. Silos create an us vs. them mentality or impede communication.

2. Leadership
Musk employs over 6000 people at SpaceX. He claims, “Leaders are expected to work harder than those who report to them”. According to CNBC, Musk has 3 pieces of advice for how to be a great leader.

Hire people who are smarter than you
Do not go with the flow- challenge the status quo
Focus on your foundation first- understand the fundamentals of what you’re doing
Musk understands that teamwork is a necessity for any team or business to succeed. It is integral to use a team that operates in a cohesive and team-oriented fashion. Source:

If there is a blockage in the team, this is what happens:

I want names named. So if someone is always on the hot seat and is always the root cause for problems, they will not be part of this organization long term. It’s not okay to be unhappy and part of this company. And so if somebody can’t get happy, get divorced.

Elon Musk


3. Negotiation, or almost “0 negotiation”:
Musk said no when eBay offered $400 million for PayPal in 2001. He said no again when eBay doubled their offer to $800 million. Even though it would have meant close to $100 million in Musk’s pocket. At the end of 2002, PayPal finally accepted an offer of $1.5 billion, but even then Musk argued against the deal. He decided to accept because of the long term risk that eBay could develop their own payment system.

Elon Musk to Tesla employees: NEVER discount a car! Tesla CEO Elon Musk found out his sales team has been offering discounts on cars and he was furious. He sent them an email which he later made public on Twitter. “There can never — and I mean never — be a discount on a new car coming out of the factory in pristine condition,” Musk wrote. “This is why I always pay full price when I buy a car and the same applies to my family friends, celebrities, no matter how famous or influential.”

4. Powerful Mental Models
Musk’s company SpaceX had three failed launches of its Falcon 1 rocket. In 2015 Falcon 9 disintegrated minutes after take off. This meant that SpaceX lost around $260 million. Source: After its third successive failure, he immediately spoke to shell-shocked employees. He told them why they had to pick themselves up and keep trying. “For my part, I will never give up, and I mean never.”

One SpaceX employee commented on the power of Musk’s statement. “I think most of us would have followed him into the gates of hell carrying suntan oil after that. It was the most impressive display of leadership that I have ever witnessed. Within moments the energy of the building went from despair and defeat to a massive buzz of determination as people began to focus on moving forward instead of looking back.” Source:

5. Reduce Everything to “First Principles”.
To Musk, prior experiences should not be the basis for making decisions. He encourages thinking based on “first principles”. This is boiling a situation down to its basic, fundamental truth. Then reasoning up from this basic position.

first principles elon muskAn example of first principles is when Musk was estimating the cost of building a SpaceX rocket. He could have used comparable products on the market as a benchmark. Making decisions using “common knowledge” is the antithesis of first principles thinking. Instead, his team analyzed the necessary parts of a rocket. Then they researched the prices of the raw materials of parts firsthand. As a result, the SpaceX team learnt that they could build a rocket cheaper. The big surprise was that the cost was around two percent of the typical price.

6. Challenge your team to be ultra-prepared for every meeting
Musk is a subject matter expert in most aspects of his companies. He leads by example by bringing his A-game to meetings. This sets the standard for everyone to follow. This makes it very difficult for an employee who does not prepare for meetings. They need to be able to answer a followup question or otherwise show that they have done their homework. Source:

elon musk meeting preparationSource:
elon musk

So What Can We Learn From The Way Elon Musk Tackles Projects?
Talk to whoever you need to. On your project, if you need to speak to someone to get something done go and speak to them. There is no need for project teams to communicate through the project manager. Yes, they should keep the project manager informed so they know what is going on. They should not ask the project manager to ask someone else a question. Allow and encourage your project teams to communicate with whoever they need to. This way they can get stuff done.

Hire project team members who are smarter than you and can get stuff done. If they are not happy being part of the project find somebody who is. The project manager should focus on project management not project doing. Projects bring about change so challenge the status quo. Do not allow people to slow the project down with statements such as “This is the way we have always done it”. Also, understand the fundamentals of the project. What is the project trying to achieve at a very basic level? Make sure for example that the project scope is easy to understand.

A common complaint from project managers is the negotiation of their plans to come in faster. As a project manager, you should stand your ground and use risk as your guide. If an aggressive timetable puts the project at risk then you need to stand up for your project. They may not like you in the short term but in the long term, they will thank you later on.

Powerful Mental Models
As the project manager, you will have the big picture which the project team will not have. It is part of your role to inspire and motivate the project team to hit the project goals. By communicating the vision and the benefit of the project it will help to motivate the team.

First Principles
Projects can become very complicated and lose their way. A great way to keep projects on track is to do what Elon Musk does and focus on first principles. Once you understand the basics of what you are doing build from there. As a project manager, a great way to show the first principles is in the project plan. Regardless of what level of the project plan you look at it should be easy to understand what is being done. You should not have to see the subtasks below to understand what is being done.

Be Prepared
All project meetings should be a very high standard. There should be a purpose for the meeting. Meetings should not take place because you always have one every week. All meetings should at the very least have an agenda. There should be a record of all the actions and decisions made in the meeting. All project team members should prepare for every meeting. This is so they can contribute and make the most of the time together. Needing to go find out and then come back together for another meeting could delay the project.

Get More Success Tips For Your Project
If you would like more tips on how to run a successful project then click here.

Updated Nov 7, 2019
Elon Musk—also known as the “real-life Tony Stark”—is a self-made billionaire, engineer, scientific visionary and investor who has managed to capture the imaginations of the science, tech and finance communities. Musk serves as CEO of two large enterprises, Tesla Motors, Inc. (NASDAQ: TSLA) and SpaceX, which is a private company. A sizable amount of his fortune was built on 20 plus years of selling or taking his previous companies public.

In 1999, Musk sold his first company, Zip2, to Compaq for $307 million in cash and $34 million in stock options. He invested money from the sale to found, which became PayPal Holdings, Inc, (NASDAQ: PYPL) and was eventually purchased by eBay Inc (NASDAQ: EBAY), in 2002 for $1.5 billion.1 He became an investor in Everdream Corporation in 1998 before Dell acquired it in 2007.

Similarly, Musk invested in the artificial intelligence company DeepMind Technology prior to a 2014 buyout by Google.2

Elon Musk is Tesla’s largest investor, owning approximately 22% of shares.3 He is also the CEO and lead architect of the firm and original founder, coming in through an initial round of funding when the company first launched.4

Aside from his current holdings in Tesla, Musk has been given a deferred compensation plan that will be paid out only if the company meets certain performance goals. The value of the payout is $2.6 billion in stock options as of 2018 stock value when the deal was finalized. However, if the payout occurs in the future, the value is estimated to be $56 billion. Musk does not receive any salary as CEO of Tesla.5

SolarCity, a solar panel firm founded by Musk’s cousin, was acquired by Tesla in 2016 for $2.6 billion. Ever since the acquisition, the overall business of SolarCity has diminished, as Musk directed a significant portion of its activities toward the development of the Model 3 automobile for Tesla.6

It has since come to light that Musk acquired SolarCity in a kind of bailout as SolarCity was having liquidity problems at the time and that Musk allegedly misrepresented the firm’s financial health. SolarCity now operates under the energy arm of Tesla and Musk maintains optimistic on the growth of the energy division.7

Elon Musk is the majority owner of SpaceX, holding about 54% of the private company, which is valued at approximately $33.3 billion.8 The U.S. government hires SpaceX via government contracts through N.A.S.A. and the U.S. Air Force for a variety of services, such as satellite launches. SpaceX has been slowly taking away government contracts from the established players in the market, primarily Boeing and Lockheed. In addition to government contracts, SpaceX also provides commercial launches to companies.

SpaceX has created and launched a spacecraft to the International Space Station and has launched its own flight-ready rockets with over 100 missions to its name. Currently, SpaceX is working on an ambitious new project entitled Starlink, which aims to cover the world in satellites to provide fast and reliable Internet to the earth’s population.9

The entirety of Elon Musk’s real estate portfolio is not fully known; however, he does own a few homes in Los Angeles that have been purchased for approximately $55 million.

Published Tue, Nov 13 20189:37 AM ESTUpdated Tue, Nov 13 20189:37 AM EST
Ali Montag

Amid headlines of turmoil in the stock market, heightened global trade tensions and political tumult, it may seem like the safest place to store your money is in a savings account.

But actually, just holding your money in cash is a bad idea, according to billionaire hedge fund magnate Ray Dalio.

“That’s the worst thing you could do because it is the surest tax on your money,” Dalio tells CNBC Make It. “You will bleed slowly to death, because the after-tax returns are lower than inflation by a little per year.”

Here’s what he means: Over time, inflation causes the goods and services you buy every day to become more expensive relative to the value of the dollars in your wallet. For example, it would take saving over $1,495 in September 2018 (the latest data available) to match the buying power of $1,000 in January of 2000, according to the BLS’ Inflation Calculator.

And over the long term, inflation becomes increasingly powerful. It would take about $10,742 in September 2018 to match the buying power of $1,000 in January of 1950, according to the calculator.

Although you do earn interest on money deposited in a savings account at a bank, the amount is far too low to keep up with the negative impact of inflation, Dalio points out.

“When you put your money in cash or short-term deposit, look at the interest rate you’re getting in relationship to the inflation rate,” Dalio, founder of Bridgewater Associates, explains. “You will see that your after tax return will be below the inflation rate. That means that you’re experiencing a tax on that [money] equal to that difference. So you can’t keep your money in cash. If you think that’s safe, you’re looking at it wrong — it’s a sure losing strategy.”

Right now, the national average interest rate for a savings account is only 0.09 percent, according to data from Bankrate. Meanwhile, the Consumer Price Index — which measures inflation — rose 2.7 percent in the past year.

Since keeping your money in a savings account is a guaranteed way to lose money, you have to turn your savings into investments, Dalio says. Then, your money is growing while you sleep.

“Over a longer period of time, equities [or stocks] will have a higher return, bonds will have a higher return, real estate will have a higher return than cash,” he explains. While there are no guarantees in the stock market, from 1928 through 2017, the S&P 500 index produced a 9.8 percent average annualized total return.

“People with great ideas create productivity and get paid for it,” Dalio says. “It is better to invest in productivity than to not invest in productivity, because otherwise your money will lose buying power.”

Don’t miss: Billionaire Ray Dalio remembers the moment he saw the financial crisis coming: ‘This is the big one’