After 20 years as a Licensed Financial Planner for a Fortune 100 company, I became disillusioned with traditional investments after watching my clients labor so long for their retirement goals without achieving the real prosperity that the ultra wealthy are able to create.

It was disconcerting to observe hard working career clients take two steps forward only to take one giant step backward every 5 to 10 years (major market declines, S&L scandal, dot com bubble, Enron and WorldCom bankruptcies, 2008 Mortgage crisis, government bailouts, Madoff, …). After downturns like these, those planning a 20-year retirement plan were suddenly facing the possibility of working an additional 10 to 20 years, or longer.

Many prudent middle class Americans have lost their financial security over the last two decades, yet evidence mounts every day of a small growing percentage of Americans substantially increasing their wealth during the same time period, some at a relatively young age. A former chief economist of the World Bank, Joseph Stiglitz, states that the top 1% in the U.S. now control 40% of U.S. wealth and this same 1% receive 25% of all U.S. income (dated 4/2011). This means of course that the other 99% are slipping farther and farther behind financially.

By the way, I have no animosity regarding this transfer of wealth. I believe there are more than enough resources for us all. It begs the question though: How do the ultra wealthy achieve this, and what do the rest of us need to do to catch up?

It seems that this 1%, the top financial tier, have relied on the lucrative Alternative Markets (the Forex, Commodities, and Futures Markets) to create their wealth. For example, did you know that banks are the largest participants in the currency market, with 4 trillion dollars in currency being traded daily? That\’s 4 trillion dollars a day! Why do banks, large estates, and successful investors choose these markets? Because they offer returns well beyond what stocks and bonds are able to accomplish, even during boom years like the 1990s. 50% annually is at the low end of what the ultra wealthy would consider an adequate return on investment.

Why are these markets able to create such substantial profits?

1.These markets are less regulated than the traditional stock and bond markets. This is because when you buy a commodity or a currency, you are obtaining a real asset with a current market value, not a stake in a company where accountants decide how much that company is worth. Commodities and currencies sell for what someone is willing to buy them for in the market place. They therefore require less oversight to make sure that someone isn\’t being taking advantage of.

It\’s similar to a bank charging you 5% on your mortgage, but 20% on your credit card purchases. The mortgage is backed by your home, so it represents a much safer investment for the bank.

This lack of regulation is also why many financial service companies won\’t offer you these products since financial planners and brokers are rarely licensed to sell these products. Also, trading with these products may not pay commissions and so the firms may not have any incentive to offer them.

2.Mutual funds are the safest and most universally accepted way to invest in stocks and bonds in the traditional markets. Yet, they are very expensive to start and operate. It may require millions to meet all the SEC requirements and substantial overhead to keep the fund operating and create profits. Again, this expense erodes a mutual fund\’s profitability.

The problem too is that the majority of mutual fund managers make substantial salaries whether their fund profits or not. This takes a heavy toll on investor fund profitability during the good years, and magnifies losses during the declining years.

The alternative markets require a fraction of the startup and operating expense (there is none in the commodity and currency markets) compared to the mutual fund arena, so far more of the profits pass on to you the investor.

3.There is far less expense trading commodities and currencies. Stocks are offered by companies that must pay for the overhead and expenses that publicly traded companies require – offices, employees, compliance reporting, marketing, insurance … All of these expenses heavily erode the profitability of that company (and those investing in them via stock and bond purchases).

With commodities and currencies, you\’re buying an asset without all the inherent overhead associated with the stock or bond of a company.

4.Trades in the Alternative Markets are heavily leveraged, so profits are magnified. Losses of course are also magnified, so only the best traders should be trusted to work in these markets.

5.It is possible to make gains in both rising and declining markets, unlike the traditional markets. For example, if a stock increases 10% once month, then loses 7% the next month, there would be a net gain of 3%. Trading a similar fluctuating currency (buying and selling) could create profits of 10% the first month and 7% the next month for a net gain of 17%.

You can see why it is easy to be far more successful in obtaining profits in the alternative markets rather than traditional stocks and bonds. If you are ready to enjoy the profits that the ultra wealthy are achieving, you owe it to yourself to investigate the lucrative Alternative Markets!

Good luck in all your investments!
Passive Income Opportunities

Author Bio: The author is a former CFP with an MSFS in Financial Planning. Ms. Victoria owned a Fortune 100 Financial Services Franchise for 20 years. www.pio-news.com Copyright © 2011 passiveincomeopportunities.net, All Rights Reserved

Category: Business
Keywords: alternative investing, high return investment,IRA alternative,invest,investing,investment,IRA