Early Investing

Economic Freedom Plan

Economic Freedom Plan
By Vin Narayanan
Date September 30, 2020

I’ve been thinking a lot about freedom in the wake of Supreme Court Justice Ruth Bader Ginsburg’s passing. As Americans, freedom is in our DNA. It’s written into the Declaration of Independence.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

It’s written into the Constitution. Here’s a partial list:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. — The First Amendment

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed. — The Second Amendment

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. — The Fourth Amendment

It’s written into the national anthem — “the land of the free and the home of the brave.”

Many of these freedoms were long denied to women and people of color. Ginsburg spent her life trying to change that. She fought to make sure America’s freedoms were for everyone.

But there’s one freedom that the Constitution is silent on — economic freedom. And that’s a serious problem. Without economic freedom, it’s hard to enjoy our basic rights to life, liberty and the pursuit of happiness.

You understand this. It’s why you’ve joined the Early Investing community. You want the freedom to live a rich life.

Everyone’s definition of a rich life is different. It could be owning a big house, having the ability to help others or being able to retire comfortably. It might be buying that boat you’ve always wanted or finally taking that trip abroad. 

Regardless of what your definition of a rich life is, economic freedom is the cornerstone to achieving it.

Unfortunately, securing economic freedom today is harder than it’s ever been.

Stocks are expensive, and bonds are lagging. House prices are rising, and millennials are struggling to buy their first homes

Stocks, bonds and real estate. Those three assets have been the trifecta of economic freedom for generations of Americans. But they’re not working the way they should be anymore.

Economic freedom isn’t guaranteed in the Constitution — or by law. In fact, the government is more likely to prevent you from living a rich life than help you. It’s something each person has to find for themselves.

So today, I come to you with an Economic Freedom Plan — something that will help all of us lead a rich life.

  • Invest in startups. Twenty years ago, we could go on the stock market, invest in $500 million companies and watch them grow into companies worth billions (or trillions) of dollars. We can’t do that anymore. The best companies stay private as they grow from a $50 million or $100 million company into a $1 billion or $3 billion company. Private investors make all the money regular stock investors used to make. But there’s good news. You can be a private investor too! Thanks to the JOBS Act, regular investors like you and me can invest in small private startups — often while they’re still worth less than $10 million or $20 million. A successful investment can give you returns of 10x, 50x, 100x or bigger. That’s a chance to generate real wealth — and economic freedom.
  • Fight for better investing rules. The government doesn’t trust regular investors like you and me to manage our investments or our money. Our national debt is $26.8 trillion thanks to decades of profligate spending. But we’re the people that can’t manage our money. That’s ridiculous. Right now, certain startup investments are reserved for people worth $1 million (excluding main residence) or those that made at least $200,000 a year ($300,000/year if a household) for the last two years. Everyone should be able to invest in those startups — not just people who are already wealthy. That’s what economic freedom is about. We should have every right to invest in the same startups as venture capitalists and other wealth investors. And we should fight for it.  
  • Fight for transparency. Right now, startups are willing to give venture capitalists information that they won’t give startup investors like you and me. That’s unfair. We have every right to make an informed decision. But we can’t make the best decisions when access to information is kept from us but given to other investors. We need to fight for an even and transparent playing field.
  • Invest in crypto. If you had invested $5,000 in Microsoft when it went public in 1986, the shares alone would be worth more than $10 million today. Investing in crypto now is similar to investing in Microsoft in 1986 or Amazon in 1997. Crypto is a new asset class with amazing long-term potential. It’s a rare opportunity to generate wealth in today’s economic environment.
  • Combine research and data. There isn’t a single “right” way to invest. The key is to make informed investments. That means taking advantage of the in-depth analysis and research that we do on startups and crypto at First Stage Investor. We spend hours talking to founders every week. And every minute we’re not talking to founders, we’re taking deep dives into the startups themselves or looking into crypto opportunities (click here to sign up). It also means looking at the startup analytics and ratings that our friends at KingsCrowd pull together (click here to sign up).

This five-part plan should help you get economic freedom so you can build a richer life. I hope our founding fathers would be proud.

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