The 60-40 rule is an investing strategy that built generations of retirement wealth
but now it doesn't work the way it used to and many smart investors are trying to get away from
it. Bonds aren't as safe as they used to be and stocks are volatile. This is why the smartest
investors on the planet like BlackRock and Ray Dalio are trying to abandon the old playbook
So if you're still following the 60-40 playbook, your retirement and your investments could be at
risk and that's why in this video I'm going to show you the investing portfolio shift that's
already happening. And then I'll show you different ways that you can reposition your portfolio
That way you can potentially see more wealth. Now I got to give you the disclaimer, okay? I'm not a
financial advisor. I'm just a random guy on YouTube. Investing has risks. You are never
guaranteed to make money when you invest. In fact, you will lose money at some point. So make sure
you always do your own due diligence and never blindly trust a random guy on YouTube. The 60-40
portfolio says that your investment portfolio should be 60% stocks, 40% bonds. These stock
market investments are going to give you the growth. These bonds are going to give you safety
and income. Over the last 60 or so years, this 60-40 portfolio was the gold standard of investing
portfolios, and it has averaged around 9% growth a year. But now investors are saying it doesn't
work the way that it used to. For example, Larry Fink, the CEO of BlackRock, which is the largest
investment manager in the world, says the 60-40 portfolio no longer gives true diversification
Now, I don't care if you hate BlackRock or you love BlackRock. The reality is they manage more money than anybody else on the planet
So at the very least, you can learn from them. So let me start by going over the three reasons why the 60-40 portfolio doesn't work the way that it used to
And then let me go over what are some things that you can consider instead. Reason number one is that stocks and bonds are not negatively correlated anymore
One of the big attractions of the 60-40 portfolio is that in history, when stocks go up, bonds go down
When bonds go up, stocks go down. this way you can make money in any market
But that started to change in 2022. 2022 was the first time in history
that stocks and bonds both went down at the exact same time
That 2022 downturn was the worst year in history for the bond market
And at the same time, we saw the stock market fall by around 20% in the United States
That was a warning sign for Wall Street because bonds have historically been a safe haven
a protection place for investors. that when there's a lot of bad things happening in the economy, turn to bonds
But in 2022, not only were we seeing the downturn in the economy, in the stock market
but people were also selling off their bonds. And the reason why is because bonds just don't seem as safe as they used to be
Now, just around the same page, a bond is a loan. And more specifically, a lot of times when people are talking about bonds
they mean lending money to the United States government. Because the United States government spends money it doesn't have
This is our deficit spending that we see happen. This is why we have such a large national debt
And so the United States government borrows money from regular people like you and me
and they pay you back plus interest. Well, because of this huge sum of national debt that we have right now
more and more investors are getting concerned about the United States government debt
They're getting more concerned about the health of the United States dollar. And so the bond market works when people believe in the strength of the government
and the bond market works when people believe in the strength of the United States dollar because they're not seeing any value appreciation
you're just getting paid back interest in the dollar. But now, because of how much inflation we've seen
because of how much money printing we've seen, because of how much national debt that we have
because of our concerns about the government, because of concerns about inflation and the dollar
people are starting to lose some trust in the bond market, and that's what we saw happen in 2022
We saw concerns about the economy, and people still did not feel safe going into bonds
They wanted alternative assets. And this is why Wall Street and a lot of investors are saying
hmm, maybe these bonds aren't as safe as they used to be because if the markets are going down
and bonds are going down, that defeats the entire purpose of the 60-40 portfolio
Now, before I move on to number two, I do want to remind you that for those of you that are investors, specifically in the stock market
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The second reason why the 60-40 portfolio doesn work the way that it used to is because bond returns the money you can make from these bonds are generally pretty weak And now with inflation still being a concern that starts to outweigh the potential return possibility
So remember, a bond is a loan. You're lending money to the United States government and in exchange, you are gonna get interest payments
You're not gonna see growth in the value of your principal. You're investing for interest payments
And right now at the time of me recording this video, if you lend your money to the United States government
for 20 or 30 years, you're gonna see slightly under 5% in interest
on your money. That means if you were to hypothetically invest $100 and you made 4.75
in interest, that means you made $4.75, which doesn't sound bad, but there's two things I need
you to remember. Number one is inflation. Because you're not seeing value growth in the value of a
principal, your only return is this interest payment that you're getting right here, $4.75
And right now, at the time we're recording this video, the average inflation rate in the United
the States is about 3%. So you're making 4.75%, but then you're losing 3% of value due to inflation
And then there's concerns that if we continue to keep printing more money in 2026 and beyond
that inflation rates could go back up. There's also concerns that if tariffs pick up more
our inflation rate could pick up again. And then there's concerns that if the Federal Reserve Bank
ends quantitative tightening, which they said they're going to do on December 1st, then inflation could pick back up. So you're making 4.75%, but then you're losing 3% to
inflation. And also, let's not forget that that 3% inflation is the reported inflation numbers
The real inflation that many people feel is actually a whole lot higher than 3%. In fact
the general rule of thumb is that your real inflation is two times the reported inflation
So if reported inflation is 3%, that means real inflation that people are feeling is 6%
which means you're actually losing value with this interest that you're getting from the
government. But even if you ignore the real inflation, if you're losing 3% of your value
with inflation and you're generating 4.75%, you're really only making 1.75% in interest on this money
after inflation because the value of this money is now growing. And then there's problem number two
which is taxes. When you lend your money to the government and you make interest, you have to pay
federal tax, but you don't have to pay state taxes. This is one of the benefits of bonds is you
generally don't have to pay state and local taxes, but you still have to think about federal taxes
So if you earn a lot of money, you could be at a higher tax bracket, and now you're gonna have to pay taxes
on the money that you make right here. If you're a lower tax bracket, you're gonna pay less money in taxes
but that essentially can negate the value of the interest that you're getting from these bonds
because number one, you're losing value because of inflation, then number two, you also have to pay taxes on the money that you're making
which means you might not actually be making any interest at all. Your money's kind of just staying the same
And then part number three is volatility on the stock side because this side, the stock market investment
is supposed to give you steady growth. But what we've been seeing now in the last number of years
is that the stock market is much more volatile today than it has been in previous decades
Why? Because of more geopolitical concerns. Why? Because of more concerns about inflation
Why? Because of all the money that's been printed. Why? Because of concerns about the national debt. Why
Because of artificial intelligence. Why? Because of all these political changes that we're seeing happen all at the same time
which makes the market more volatile. Now, yes, that creates opportunity for the financially savvy, but for the average person who doesn't want to do the research or put in the work, that makes investing a whole lot more scary and a whole lot less predictable
And this is why you have a lot of institutions on Wall Street saying maybe the 60-40 portfolio isn't right
Maybe we need to add in more asset classes like alternative assets
Maybe we need to start thinking about gold. Maybe we need to start thinking about different types of investments like crypto that we can mix into the portfolio that we have real diversification
So let me break this down with my personal opinions. And again, these are my opinions
based off of things that I do. I don't recommend what I do to anybody else, but I just want you to start thinking like an investor
That way you can build a better portfolio for you. That way you take better care of your family
What I have learned is that a lot of people get diversification wrong because we think of a diversification as
oh, I invest money into REITs on the stock market. I have blue chip stocks on the stock market
I have some growth stocks on the stock market. And I even have some dividend paying stocks
on the stock market. So I'm diversified. But what I've learned is that all of those stocks that you have are all paper assets
It's all one asset class. So when the stock market goes down, because we know the recessions happen, we know the
market crashes happen, a lot of stocks get hit. In fact, your entire portfolio might get hit, even though they're quote unquote diversified
And this is where if you want to have real diversification, you have to invest your money into different asset classes
Now, hear what I'm saying very carefully. This doesn't mean you have to go out and do this tomorrow, because a lot of times we get
overwhelmed that, oh my God, I need to go out and have all these different types of investments Start with one first build your portfolio around one first then go to the second then go to the third and on and on and on But don over diversify before you already built some sort of wealth in one asset class first
This is how the wealthy start to think is they invest in one place, dominate that, then go to
the second, dominate that, then go to the third. I invest my money in five places in this order
And again, I don't recommend what I do to anybody else. Number one is into my own business. I run a
company called Briefs Finance. You may have heard me talk about this before. My YouTube channel here
minority mindset, this is my hobby. I do this for fun because I like doing this. But my full-time
job, where I spent most of my time, is running a company called Briefs Finance. It used to be
Briefs Media, but we're transitioning to Briefs Finance because of AI and technology. We used to
be a media company that specialized in financial news and education, but we realized that AI is
going to make us bankrupt in a few years, so we're transitioning to a financial technology company
that's powered by media, and we're making this shift now as we enter 2026. It was a pretty
expensive, pretty emotional shift that we made because we had to change everything that we did
in our company. But because of technology, we are changing what we do in our company. And we're
launching a brand new AI and software tool in 2026 that we are putting a ton of money, effort
and energy into. And it is going to be the most powerful investing and research tool that I have
seen anywhere. But that is my largest investment. And it's also where I spend all my time. Number
two is my real estate investments. Now, when I talk about my real estate investments, I'm not
talking about the home that I live in. I'm talking about rental properties that I invest in. Now
the reason why I like investing in real estate is because number one, it provides cash flow
because when I buy these properties, my goal is to rent them out and make positive income every
single month. That's generally pretty passive because I don't manage the properties myself
I have a property manager who I have trained, who does all the day-to-day work, and then they give
me a monthly report and quarterly reports and annual reports. That way, I just review the numbers
to make sure that the properties are making me money. So the first reason why I like real estate
is because of cash flow. The second reason is because of tax breaks. As a licensed attorney, who is not your attorney
what I can tell you is that real estate has some of the biggest and best tax breaks
that a tax code has to offer. That's why there are many real estate investors
that can make millions, if not billions of dollars a year and pay little to no money in taxes
You may have heard President Donald Trump talk about this. is because there's a lot of tax loopholes or tax breaks
call it whatever you want, in the tax code that allow investors in real estate
to make money and pay less money in taxes. And the third benefit for investing in real estate
is you own a hard asset. It's something that I can see, feel, and touch
You can compare that to a stock. When I buy shares in McDonald's, I don't actually own any physical building
I don't own any bricks. I don't own anything. And I own a contract, a piece of paper that says
I have one share of ownership in the McDonald's corporation. versus when I own real estate
I own something that I can see, feel, and touch. The third investment that I have is in stocks
Now, when I invest in stocks, I have two different strategies, and if you've been subscribed to my channel
you've heard me talk about this before. I have a passive strategy, and I have an active strategy
My passive strategy is I have a system where every Wednesday, money is pulled out of my checkings account
and it's invested into my portfolio of funds, my ETFs that I invest in
And the bulk of these ETFs that I invest in are for cash flow, meaning they're dividend paying because I love investing for cash flow
My real estate pays me with cash flow, and most of my passive stock market investments are paying me with dividends
And the reason why is because I can work to stack the dividends and I can live off of that income. So every Wednesday, money leaves my check-ins account
and it is invested into my portfolio of ETFs. Why Wednesday? Because it's the middle of the week
I don't have any secret sauce as to why Wednesday. I just pick Wednesday because what I've learned is it used to be Monday
It also used to be Friday. but a lot of times when you have government holidays
they fall on Mondays and Fridays and then the stock market is closed. So I just pick the middle of the week for Wednesday
Doesn't really matter when. The key here is I just have money constantly going to buy these passive investments
where most of them are generating cashflow. I do have some passive investments here
that are more for growth and investment into foreign economies outside of the United States
but the bulk of it is for cashflow. Then my active investments in the stock market
are where I am doing research along with my team. We are doing research to find investment opportunities where I can invest my money
This is now individual companies that I'm investing in. This is part of some of the things that we do at Briefs Finance
We have investment reports where we are researching what's happening in the markets
You may have heard me talk about Market Briefs Pro. That's what we do there. I have ysts that are doing this research to help me with my investments as well
And now we sell that research because, well, we've gotten good returns out of it. But in any case, this is where I'm investing in individual companies on the stock market
based off of shifts that we seeing in the economy Again I not a trader I looking for individual companies to invest in based off of research based off of data based off of where money is moving That is what I call active investments This is more for growth This is for cash flow That for cash flow
Then I have my speculative investments. This is primarily in two places. This is into crypto and this is into startups
Now, notice what I said here. These are speculative investments. This is a smaller piece of my portfolio
This is about 18% of my total investment portfolio, excluding my business
So here, because it's more speculative, I know I can go up very quickly
but I know I can go down to zero very quickly. I've invested into a lot of startups that have gone bankrupt
So yeah, I've lost a lot of money on it. I've invested into crypto. Some of them have gone up a lot
So big booms, big busts, more speculative, more fun, more exciting, but it's a speculative piece of my portfolio
I did not start investing into speculative assets until I had established myself here first
because I understand that this is much more risk for more potential return
But the key is potential return. A lot of people get excited about these speculative investments
meme stocks, meme cryptos, startups, because we hope that we can turn $1,000 to $100,000 very quickly
But that ends up becoming gambling for a lot of people. It's a very easy way to lose your entire investment
which is why I like to think about investing in the fundamental investments
first before getting into more of the speculative investments. And then I have a little bit of gold
This is about 2% of my total portfolio. And for me, this gold is really just a hedge against
inflation. It is a protection against doomsday. It is insurance because my theory is if I had
$10,000 of cash and $10,000 worth of physical gold and I bury both of these two things in my
backyard today, in 10 years, I think the gold is going to have more buying power than the cash
I don't know for sure, but that's my theory. And because of that, I have this physical gold as kind of a way of saving hard money
Again, not a huge piece of my portfolio because I'm very bullish on the economy. I get it
Recessions happen. Market crashes happen. But over the long term, I'm very bullish on the economy
But I want to have a little bit of cushion, protection, insurance, call it whatever you want, in case bad things happen
And that's where a little bit of physical gold comes in as just a small 2% piece of my portfolio
you. And this is where now what I've learned is that real diversification is investing your money
in different asset classes. Because now when you see a stock market crash, well, real estate may or
may not go down. You might see a crypto crash and stocks might go up. And this is where when you have
investments in different asset classes, now you have real diversification. Certain things can
provide you income. Certain things can provide you growth, but it does require more work. It's not as
passive as it used to be because, yeah, it used to be a lot simpler. You can just throw your money
into some stock funds and some bond funds and be done. Unfortunately or fortunately, depending on
how you look at it, our economy has changed since then. This is not good for the people that are not
willing to put in the work, but it also creates opportunity for more growth for the financially
savvy that are willing to put in slightly more work. And if you are willing to put in some more
work, you can now start to see more outsized returns. And if you can get slightly better returns
that can add up to thousands, tens of thousands, hundreds of thousands, millions of dollars over
the course of your investing career depending on how much money you're investing and depending on
how much time your money is being invested for but this is where i want you to start thinking about
real diversification as an investor as opposed to just stocks and bonds the way it used to be
because the reality is bonds aren't as safe as they used to be we started to see that in 2022
when stocks and bonds went down together bonds aren't paying that much especially after you
factor in inflation and your taxes a lot of people really aren't making any money at all
from the interest of their bonds and stocks are volatile. And if you're not willing to withstand that volatility
it can be a lot harder to withstand. And this is where having real diversification can be helpful
And by real diversification, I mean investing your money across different asset classes. And I've talked about investing my money
into my own business, to physical real estate, into stocks passively and actively
into speculative investments, to things like crypto and startups, and then maybe into precious metals like physical gold
Some people like silver. It doesn't really matter. just something that could be a hard form of money. Again, if you want to learn more about how you get
started as an investor or find hidden investment opportunities, I have my investing masterclass
for you down in the description. And if you got value out of this video, the best thank you is a
referral. So if you could please share this video with a family member, friend, colleague, or fellow
investor that we can continue to spread this type of financial education. Thank you. It is getting
harder than ever for the average person to get a job and build wealth because traditional entry-level
skills are now being automated by AI, but this is the silver lining because for those of you that
are go-getters that want to go the extra mile, this shift is going to create more millionaires
than ever before. And yes, the things that I'm about to show you will apply whether you work
a job or run a business