Learn Three Golden Rules for Accumulating Everlasting Wealth

by | Aug 9, 2007 | Archives

Two years ago when we began our Multi Currency Educational Service, I was approached by a large publisher to sell this program to them.  At that time I offered you my loyal readers a special offer before I negotiated that sale. Had that publishing deal become complete, the price would most certainly have risen.

Now we are at it again.  The phenomenal appreciation of our model portfolios for nearly tow years cannot be unnoticed and tomorrow I’ll once again be talking with a publisher, much larger than ours about some form of deal…which could push up our service’s price.  Big publishing companies cannot operate without staff from their bedrooms as Merri and I do to keep prices low.

In fact we have even set a target date, August 17.

So once again, before any price rise I would like to offer this service to you.  Below is the first trial marketing piece targeted for the new publisher.  In this case, we have left the price at our low annual price.  If you already subscribe you can add a year of subscription at the existing low price. Just mention in the comments box of the order that you are a subscriber.

Our Multi Currency Educational Service is a mere $149 for a very long and educational year!  Won’t you share this exciting world of wealth accumulation with us and our readers around the world?  To subscribe go to gary & Merri Scott´s Internacional Service Center.

Here is the piece:

Borrow Low – Deposit High

How would you like to invest $100,000 with one of the world’s safest banks and nine months later have $297,001?

This is exactly what just happened (in the last nine months) with a Multi Currency Sandwich Investment.  Read on to see why…and how.

This fast accumulation of wealth was not a one off stroke of luck.  Multi Currency sandwiches have been a phenomenal way to invest for over three decades.

Since the US dollar’s link to precious metals was broken in the early 1970s; fluctuations between currencies, stocks and bonds worldwide have created some of the world’s greatest (such as George Soros) fortunes.

One great, very exciting Multi Currency Sandwich, for example, has lasted 19 years.  From 1971 to 1988, the yen rose to hit a dizzy high of 120 yen per U.S. dollar (from 400 yen per dollar).  In 1988, yen interest rates dropped into the low 4% range. This created a classic multi currency sandwich distortion that continues even now 19 years later. The yen was a strong currency at an all time high that could be borrowed at a low interest rate. This is the formula that multi currency sandwich investors always look for.  Learn here how you can spot such valuable distortions.

Now, 19 years later the yen is barely stronger.  Interest rates for the yen have fallen lower, clear down to 1.62%!   Imagine what this meant to many of my readers who have used this global investing approach. They learned how to borrow yen at many huge safe banks and redeposit the loan into investments that earned as much as, 14%, 21% even more as you will see below.

My name is Gary Scott.  I have been writing and publishing information about international investing for nearly forty years (since May 1968 to be exact).

Fortunately I stumbled across the Multi Currency Sandwich Strategy at an early stage and wrote a report entitled “Borrow Low-Deposit High”.  This report teaches how to invest in multi currency portfolios and how to use leverage in these portfolios to create multi currency sandwich investments. Readers of this report have been able to borrow yen (plus numerous other currencies such as the Swiss franc and now the Czech koruna) at low rates and redeposit the loans in other currencies at much higher rates (without forex loss) for more than 20 years!  Sometimes profits have been over 200% in a year!

Yet before we become carried away by the profit potential, let’s look at another aspect of wealth accumulation…safety.  Golden Rule #1 of Accumulating Wealth is Invest First for Safety.  It’s nice to make huge profits but more important not to lose what you already have!

The Multi Currency Sandwich is not a fast trading technique.  In fact most positions are aimed with a five year horizon…pretty sleepy compared to people who trade currencies (entirely different than sandwiches). Yet for most of us, slow and sleepy mean SAFE!

However the Borrow Low-Deposit High tactic can be really profitable.

How sleepy and how safe?

Imagine this. Over the past 19 years, the cost of a Japanese yen loan averaged about 2%. The US dollar interest rate averaged 4% over this same period. Investors who invested $100,000 in safe US dollar bonds or CDs borrowed an additional $400,000 in yen to reinvest in more safe US dollar CDs or bonds.  The $100,000 invested (plus the loan) averaged $20,000 a year minus the $8,000 a year in interest costs of the loan.  This created $12,000 a year income and turned a safe 4% investment into a safe 12% investment. Investors who used this type of Multi Currency Sandwich added an extra $152,000 of income (on a $100,000 investment) over the 19 years!

Investing for 19 years in US dollar bonds or CDs is about as sleepy and safe as one can get…especially since these investments were made through totally solid banks…and even more so because those banks lent those investors the extra $400,000 at 2% interest!

Yet many smart multi currency investors have done much, much better.

How much better?

Take the performance in our model Multi Currency Educational Service Portfolios as an example.

Once a year in cooperation with one of the safest banks in the world (introduced in a moment), I develop and track five model portfolios for educational purposes.  You’ll find out how this education can enhance your wealth building potential in a moment.

Beginning October 21, 2005 we created five model portfolios to review (and learn from) bi-weekly throughout a year. The portfolios were:

Emerging Asia Portfolio
Emerging Currencies Portfolio
US Dollar Hedge Portfolio
US Dollar Long Portfolio
US Dollar Short Portfolio

We worked with our bank (as we have for 20 years) to select ideas we believed in that would prosper during the year.   We then created portfolios we could track to see if our ideas were good, how they performed and why.   We knew we would become better wealth accumulators through this continual, online, real time study of global investment markets and currencies.  Even if the ideas turned out bad and lost money, we would learn from finding out why.

Funny the way the universe works. When you do something with goals beyond making money, the wealth seems to flood in effortlessly and with ease.

Yet we could never have guess how much more and how easy the wealth accumulation would be!

As mentioned we tracked and studied these portfolios from October 21, 2005.  During mid 2006, we had to cope with the second worst emerging market crash of the decade from March through July 2006.  We learned a lot from that crash!

Despite this emerging market collapse, we came through that year satisfied with the results of these real time portfolios.

The performance of the five portfolios from October 21, 2005 to October 21, 2006 were:

Emerging Asia  + 110.48%
Emerging Currencies + 42.86%
US dollar Hedge + 10.60%
US dollar Long + 8.81%
US dollar Short + 7.32%

Had we invested $100,000 in the Asian portfolio (and leveraged two times with a 1.62% yen loan) the investment would have returned nearly $330,000 profit in the year.

Is this better enough?

Let me hasten to add that this type of performance is easy to write about when looking back. I do not want you to ignore the fact that as sleepy and safe as Borrow Low-Deposit High can be that there can also be risk. Had we invested in some of the portfolios above in March or April 2006, we would have lost money (a lot of it) by October 2006.

This is why our portfolios are not investment recommendations.  Many of our readers do duplicate these portfolios for themselves, but this is not why we create them.   The Multi Currency Portfolios we create and track for our readers are educational  tools to help  readers learn how to spot trends, cash in on distortions and find better, safer ways to accumulate wealth and avoid loss.  Our Multi Currency Educational Service is an educational service that can help you learn what to do and what to avoid for your own personal wealth accumulation.

First, let’s look at some of the lessons we learned from October 2005 to October 2006.

We learned that equities in Emerging Asia and Emerging Currencies portfolios strongly over performed bonds.

We learned that even the lower performing emerging bonds still beat any US dollar, Euro or Western European currency bond yield or CD interest…for the last five years.

Another interesting lesson was that the most profitable investment in all five portfolios was NOT in Asia, China or India as one would assume.

The most profitable (in percentage terms) investment was in the Jyske Invest Eastern European Equity Fund. From October 21, 2005 to October 21, 2006 that fund rose (even without leverage) from $51,000 to $76,138, a return of nearly 50%.

Accumulate wealth at that rate anywhere in the world and you’ll soon not only be rich but famous!

According to an Associated Press article, that’s a much better return than those made by perhaps the most famous investor of all, Warren Buffet.  The article says:  “In 1956, a young Warren Buffet started an investment partnership with $100 of his own money. Thirteen years later, he closed out the partnership with total personal profits of $25 million. During these thirteen years, Buffet received average returns on his investments of 29.5%. That is an unheard of return on investment average today.”

So 50% return in a year is phenomenal…but we are just getting started.

Had you created a Multi Currency Sandwich and leveraged this loan two times with a 2.75% Swiss franc loan, the return on a $100,000 investment would have been over $155,276 profit in one year. That’s a 155.27% return!

This was not a one time fluke either.  This Jyske Fund has performed really well in the last five years, up from 110 euro to 500 euro since 2001. That’s an increase of 3.54 times.

If you had invested $100,000 and borrowed $200,000 more in Czech koruna at 3.75% and invested in this fund for the past five years the initial $100,000 would now be worth over a million dollars!   Your loan costs would be $37,500. Your profit on $100,000 after interest would be $1,024,500 on the $100,000 cash invested.

How much better can we ask than that?

Based on this lesson we gave added Eastern European emphasis in several of our 2007 portfolios (which you will see in a moment).  One of these portfolios is an Emerging Market Portfolio leveraged with a Czech koruna loan.

That portfolio has $100,000 invested and is leveraged with another $100,000 borrowed Czech koruna.  The funds are invested in Eastern European markets including Russia and Hungary as well as the Czech Republic.  In addition this portfolio has investments in Asia, China, India and Turkey.

The Czech koruna has been a good currency to borrow at this time. Its interest cost has dropped to a low 3.75% and has recently flirted with all time strength against the euro. Overly strong currency loans tend to fall and create extra forex profits (as they become cheaper to repay).  You’ll see in a moment how this emphasis has really paid off in the last nine months.

Another portfolio added is a Dollar Short Portfolio. This differs from last year’s Dollar Short Portfolio as it is more aggressively anti the greenback! This is the real thing with a 100% dollar loan and no US$ investments. Investors who fear a US dollar collapse will want to follow this trend.

We also added a Swiss Samba Portfolio of Latin investments leveraged with a Swiss franc loan.

This Swiss Samba Portfolio has made great sense as you are about to see. Over the last year the region of Latin America outperformed the other two emerging regions. Latin America Morgan Stanley Capital Index is up 17.4 %. Asia is up 15.2 % and Europe/Middle East/Africa (EMEA) returned 4 %.

We have also added a Green Portfolio. This is one of my proudest achievements because we believe in investments that can help the world. As you’ll see this portfolio has performed best of all.

Here is the nine month performance of the five 2007 portfolios we have tracked for educational purposes over the nine months from November 1 to August 1, 2007.

Portfolios 2007

Emerging Market 74.67%
Swiss Samba   44.47%
Dollar Short   37.90%
Dollar Neutral   37.19%
Green   197.01%

These portfolios have already helped us learn a lot in the last nine months…not to mention that fact that any readers who created their own green portfolio which consists of just six shares (two Danish, one German, one French and one Japanese) and invested $100,000 now nine months later have $297,001!

The Green Portfolio is also one of my smartest moments as well.  Restoring the environment is one of mankind’s biggest problems. Big problems require huge solutions. Huge solutions create as I had suggested wealth…lots of it.

I had been urging the bank we work with (about to be introduced) to create a green portfolio but always met the same response.  Green is nice…but not profitable.

Finally the manager that I am closest to at the bank and I campaigned hard in 2006 for green!  We convinced the bank to try and I believe we can say that forcing green is history now.

I believe that green is a bigger trend now that plastic was a few generations ago.

This is another lesson we have learned from our portfolios.  Belief in investing is important.  Belief is so vital in fact that the Golden Rule #2 of Accumulating Wealth is Do Not Chase Profits. Invest in Your Beliefs Instead!

However, before I delve more into the investing power of belief, let’s take one last look at safety.  We want safe ideas, safe strategies and safe investment advisors.

This is why I work exclusively with Jyske Bank (my primary investment advisor for the last 20 years) to create our model multi currency educational portfolios.

Jyske Bank selected the six green shares involved in water purification, alternate energy and waste reduction that have appreciated (with leverage) 197.01% in the last nine months. That is really stunning performance.

Yet it is the safety factor that first led me to Jyske.  Their history is long, well over 100 years.

Jyske Bank is large-Denmark’s second largest bank, with 450,000 clients in Denmark, over 30,000 abroad and 23 billion in assets.

In addition, Denmark is rated by Standard & Poor’s as the safest country in the world in which to bank.

Jyske Bank is the only bank we know that specializes in the Borrow Low-Deposit High strategy. It is also one of the leading currency traders in the world. Unlike most banks (that trade only eight hours a day) Jyske maintains a 24 hour trading service.  Many other large banks use Jyske to handle their off hour currency positions.

Jyske Invest, the investment management affiliate of Jyske Bank, uses a good value system as well and their affiliated fund management company has been rated #1 by Morningstar. They use this value system to help us select shares for the Multi Currency Educational Service. 

Jyske has been my bank for over twenty years and helps me stay informed about global equity markets, plus global currency parity and interest rate trends so we can learn from real time, ever evolving portfolios.

My business is to help readers learn how to manage their managers. Jyske Bank can provide a stable and safe institution for those who wish to employ a multi currency  strategy.

Having reminded you that seeking safety is the first golden rule, the second as mentioned is to invest in what you believe.

This lesson really struck home many years ago when my wife, Merri, and I were strolling in the dawn near this wonderful old hotel known as “The White Queen of The Gulf”. Built in 1897, it sits high on a bluff and combines old world charm, from the antique-filled Henry library to the Tiffany Ballroom with its priceless skylights of stained glass, to its private resort setting.

I will never forget this hotel because I learned perhaps the most valuable lesson of all about investment managers.  We were conducting our International Business and Investing Course there.  As I arrived at the Belleview to check in, even before I reached the registration desk, one of the delegates, a heart surgeon, approached me and vigorously shook my hand. “Gary,” he said, “I cannot thank you enough. I have followed your recommendations about borrowing yen to invest in pesos and shares and have made so much money, I have been able to buy a house on the beach in my homeland and can now retire.”

I felt a glow as I walked away headed for the check-in counter of the hotel. (One always feels good having helped a client and friend.) I was happy that the doctor had made a lot more profit than I did. I am conservative with my own investments and had only borrowed two to one. This doctor had borrowed four to one and had held on during the yen rise.

However, the warm feelings did not last. Still before I could check in another delegate, also a medical professional, collared me. “Gary,” he said, “I am not even sure if I should be here. I followed your advice borrowing the yen to invest in peso and shares and lost every single penny.”

It turned out he had chosen to borrow six to one. When the yen appreciated and he was faced with putting up substantially more money, he decided to cut his losses.

Three investors (two doctors and myself) with similar backgrounds and exactly the same information. All had the same investment manager yet they obtained three totally different results!

The lesson was clear. This is why the most important investment manager is always yourself.  In the end your other investment manager (or managers) will never make you happy unless you have a belief and purpose that guides and manages them.

This is why we provide a global, real time online educational service to help you develop your own ideas and beliefs so you can better direct your investment managers.

Our emailed Multi Currency Educational Service can help you learn how to expand your profits with up to 400% loans just as our reports have helped thousands of readers do over the past twenty years.

Golden Rule #3 of Accumulating Wealth is Combine your Beliefs and Ideas with Value.  Good ideas and value create profits and accumulate wealth!

You can learn how to better accumulate wealth by developing beliefs, finding value, spotting distortions and trends in my new updated report “Borrow Low-Deposit High”. This emailed report explains how to make multi currency investments and how to use leverage to create multi currency sandwiches.

You can purchase this report below.

Tens of thousands of readers have paid $49 for this report since it was first published in the 1980s. You, however, can have the most up to date edition free.

Subscribe to our annual emailed Multi Currency Educational Service and get the email report “Borrow Low-Deposit High” FREE.

When you enroll, we’ll email the “Borrow Low-Deposit High” report FREE to you immediately along with an up-to-date analysis of the portfolios we are currently tracking.

In addition, if you sign up now I’ll add in another FREE report entitled “The Economic Titans Clash” that helps you learn why 13 economic forces now clash to shape investments markets in the year ahead. This report shows both the rewards and the risks contained in these 13 trends.  The report also outlines the five Multi-Currency Portfolios we are tracking in our Multi Currency Educational Service now.

Then we’ll email updates to the Multi Currency Educational Service on a regular bi weekly basis. These updates help you learn how, why, when, where and which opportunities in currency and interest rate parities and global markets may be best suited for you.

The service helps to see why and where to invest and learn why and how currencies and interest rates rise and or fall.

Finally, as always you are protected by the 30 day completely satisfied or your money back guarantee we have offered our readers for more than 20 years.

Our Multi Currency Educational Service is a mere $149 for a very long and educational year!  Won’t you share this exciting world of wealth accumulation with us and our readers around the world?  To subscribe go to gary & Merri Scott´s Internacional Service Center.