Porn, IRS audits, and a SELL EVERYTHING warning from a massive international bank. Today’s show is a doozy, my friends. I’m Bryan Ellis. This is Episode 185.

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Hello, SDI Nation. Welcome to the podcast of record for savvy, self-directed investors like you! Get ready for another dose of predictably profitable thinking!

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The host, attorney Tim Berry, is an incredibly sharp attorney with clients ranging from normal affluent people all the way up to people who have 3 commas in their net worth number. Yeah, think that one over hehehehehe. He has extraordinary expertise in 3 areas: Tax law, high-end asset protection and self-directed retirement accounts. And, as it turns out, all 3 of those areas are quite heavily related. In tomorrow’s show, you’re going to learn how to save $25,000 on LAST YEAR’S tax bill… so be sure to tune in. To get a notice about the show, text the word SDIMONEYLAW with no spaces or periods to 33444. Again, text the word SDIMONEYLAW with no spaces or periods to 33444.

Ok, people… Porn. IRS audits. And an incredibly dire prediction from a major bank. Where to begin.

Let’s go with PORN! Actually, that one is all about the IRS, too.

The IRS recently did an audit of disciplinary practices for its employees. That very notion brings up some big questions for me, as I wonder what exactly constitutes unacceptable behavior to the IRS on behalf of its employees, as I’m hearing more and more reports of the IRS returning to the bad old days of very heavy handed tactics during audits.

Anyway, in this disciplinary practices audit, it was revealed that an attorney at the IRS viewed sexually explicit material on his computer for 2-3 hours per day for a period of four months.

Let’s see… one month has about 20 work days. Four months is 80 work days. 80 work days times 3 hours per day… let’s see… that’s 240 hours.

240 hours viewing porn at the IRS by one of their attorneys. That’s a whopping SIX WHOLE WEEKS in aggregate of this guy getting his jollies at the expense of you and me as taxpayers.

What was that expense? Well, based on standard pay tables, it’s safe to say his salary was AT MINIMUM $100,000 per year. Thus, using the most conservative analysis possible, this guy was paid over $11,500 to act like a dirtbag during work hours.

But don’t worry… the IRS really came down hard on him. They suspended him for 3 days. The report didn’t say if the suspension was with or without pay. What do you figure that guy did during those 3 days? Hehehehe

But hey… at the end of the day, this gives us all a new strategy to consider during audits: Make sure that the revenue agent you’re facing is bombarded with voluminous amounts of porn during your audit. Maybe the 3 hours a day they’ll lose to smut-surfing will accrue to your benefit!

On to a much more serious topic: RBS, the Royal Bank of Scotland – a HUGE bank with over a trillion dollars in assets, revenues north of $15 Billion per year and over 100,000 employees – issued a particularly dire warning.

Their suggestion? “SELL EVERYTHING”

RBS is predicting a cataclysmic year and is recommending that their clients SELL EVERYTHING except for high-quality bonds. They’ve suggested that their fear for their clients is the return OF their capital, rather than a return ON their capital.

And RBS, like a few others, have said that they think this year is setting up very similarly to 2008.

Sounds pretty awful, doesn’t it?

Well here’s the thing: I don’t buy it, but I hope they’re right. Yes, I think this year could be pretty turbulent in the conventional financial markets. The Chinese stock market is in horrible disarray, and is being made far worse by the Chinese government’s insistence on manipulating that market. The U.S. Stock market has already fallen by more than 1,000 points this year, with just 13 days into the new year. And oil prices are absolutely freefalling, though the immediate impact of that for you and me is distinctly positive.

Here’s why I don’t buy it: There are certainly some negative forces at work in the world economy, and here in the United States. No doubt about it. And I DO expect the U.S. stock market to have a really rough time this year.

But I just don’t’ see a single CATACLYSM-level driver for destroying the markets like existed back then. Back then, everything came to a head at once for the mortgage crisis and the broader economy. Hey, here’s the harsh truth: It really wasn’t that bad, even back then. According to the St. Louis Fed, mortgage defaults never exceeded about 11%. That means that even at the worst of the worst times, 89% of mortgages in America were being paid as agreed. Think about that in your own portfolio: if 89% of your investments performed exactly as expected but 11% of them hit a rough patch… you’d probably be just fine… probably even happy. But I digress, as government math isn’t real math, and real people are invariably smarter than our friends in Washington.

I do see turbulence ahead for the stock market, because I really do believe that the Fed will be shown to be a paper tiger, as the only real tool they have – interest rate adjustments – will do nothing to spur the economy.

But what about those of you investing in real assets, like real estate or precious metals or even other paper-based assets that you really control, like private loans or even real businesses?

Well, the wisdom of ownership of real assets always comes to the fore in times of economic weakness, and I suspect this time will be no different.

But recall the standard used by wise self-directed investors for making investments: Every asset must be SIMPLE and SAFE and STRONG. This is a time for prudence. Part of the safety standard should be this: Is there a margin for error? In other words, if the U.S. stock market really melts down, does that inherently mean your portfolio will suffer? If oil trades down to $20 a barrel… or even back up to $150 a barrel… what would that mean for you?

These questions matter, my friends.

Here’s my advice: Boring investments that throw off cash will win the day. Boring cash producers. Boring cash producers. Boring cash producers. That’s what you should be looking to in 2016.

BUT… never fear, my friends… BORING doesn’t mean unprofitable. In fact, we’re getting ready to do a major capital push into one of the most boring markets I know of. We’re going to buy a lot of rental property in this market and rent it out. Why? We can collect nearly 20% of the property price every single year… and those rents won’t be effected even slightly in the event of economic cataclysm.

But this market is boring. I’ll bet nobody has ever visited this place to vacation. And you probably would never brag to your friends about the locale… but the NUMBERS are very, very sexy. You’d definitely brag about the numbers.

Want to know more? Join me on RIGHT HERE on SDI Radio for our next episode on Friday… and I’ll tell you all about it. To be notified about that episode when it’s available, text the word SDIRADIO with no spaces or periods to 33444 right now.

And in the mean time… invest wisely today, and live well forever!

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