money

The Wealthy You! – OFFENSE; It is all a personal decision. Everything. Including what you do with your time, what your income is and how much you want to be worth; this is net value. It is your decision to bring that to reality every day. Not tomorrow.

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One’s personal life is a library of one’s personal decisions. Your life is molded and created by you every time a decision is made. Did you decide your line of work or labor? Or did you accept the first job offer? Did you select the amount that you receive from your wage or paycheck from your job? Or was the first offer accepted? What about the city and neighborhood you live in? What about the use of your time? Are you enjoying and receiving fulfillment from the current use of your time every day? All these questions should be answered and determined by you. Not a boss or a parent or a friend or a teacher, but you. This also includes your net-worth or net-value. There is value attached to everything in our world. Even trash on our streets have value, people will hold up used cardboard to ask for money and food, while others may peruse through trash looking for something of value. In Oregon, aluminum cans and plastic bottles can be redeemed for $.10 each. Public trash cans and dumpsters seems to always have a person in it looking for cans and bottles. These people have chosen to be amongst the least-valuable people in society, they demonstrate this everyday by looking for used drinking receptacles and using trash to ask you for your money. The Wealthy You! is you selecting to be amongst the most-valuable people in society. You will peruse through the smartest of minds from people that you meet in your life. You will be looking for gold (or your version of gold) while others look through trash. You will be collecting assets of value that appeal to you; real estate, gold, silver, stocks, bonds, businesses, literally whatever you decide. But it is your decision.

Why is this appealing? Because it is the epitome of private property. Aristotle acknowledged thousands of years ago a very basic principle that applies to all human life in all countries; “true happiness is impossible without the use of private property”. The real estate, gold, silver, stocks, bonds, businesses, artwork, and anything else of value needs to be owned by someone, otherwise they will all fall into disarray or the government will come to own it for us. The purpose of ownership is to take on the responsibility of that asset. Someone who owns a billion dollar business(s) (Musk) has taken on the responsibility of that business producing its product for society and doing it in a financially smart way. Farmers own their farmland so that they can produce their crop for people near and far. Farmland that is unowned has weeds in it and is unproductive. Businesses that don’t produce a product for society won’t exist for long. This is private from the government. Government doesn’t own the farm lands and the businesses, or even the national infrastructure. Businesses own this property and the private citizen owns the businesses (government does own AMTRAK, some land and some artwork in Washington D.C.) but the vast majority of all drivers of wealth are owned by the people. Besides someone has to own these assets and wealth has proven to be superior to poverty for a person’s life.

People are hired to do all kinds of jobs and in satisfactory completion of the job, people will receive a paycheck and some benefits or bonuses. Some people prove they don’t want to keep that job by calling in sick on a regular basis, being consistently tardy, asking coworkers to trade posts, sections or responsibilities or just plain not showing up for work. We have all worked with people who act this way and they are usually the main producers of these issues in your line of work. What they are really saying is they don’t want to keep the job. What if God hired you to do a specific job or play a certain role here on Earth? Are you going to call in sick frequently or complete the job satisfactorily? All these are your decisions to make every day of your life. Your life and world is created by your tongue and built by your hands.

Next on The Wealthy You! – OFFENSE; View yourself as one of the most valuable things to exist in society; you are more valuable than diamond rings, million dollar sports cars and billion dollar sports franchises. Besides, someone has to own all those assets, why not you.

Become The Wealthy You!

The Wealthy You! – OFFENSE; Put your collection of money and value to work for you. The more money you collect and put to work for you, the more money there will be available to work for you. Money doesn’t have a physical body to maintain, which means that it will literally work 24/7 for you until you say ‘stop’. This is compounding interest and investing. Make money work for you every hour of your entire life.

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Money is the most abundant resource in the Universe (America alone had almost $22 Trillion worth of economic transactions in 2021 alone). Time is the most valuable resource in the Universe and it can’t be bought at a store (if you could buy your time at the store how much would you spend to buy more?). Money itself can’t think (but you can). Money doesn’t have a physical body to enjoy the physical world around them (but you do and can). Money can’t get sick (but you can). Money doesn’t have a family to spend time with and enjoy (but you do). Money doesn’t need time off from work (but you do). Money doesn’t want time off from work (but you do). Money doesn’t mind being a slave to a master (but you do). Money doesn’t need to be compensated for labor (but you do). Money is more than happy to work your entire life for you, and if you put enough to work, it’ll be more than happy to work for your kids and your kids kids (generational wealth).

When you put your money to work, this is called investing. The point with investing is to put a little bit in and get more out. If you invest $100,000 into a home and a year later it is worth $125,000, that is a good investment. But if the home is worth less than $100,000 in a year, then it could be considered a bad investment because you got less out than what you put in. Same thing with stocks, bonds, and other financial assets like precious metals. But it doesn’t stop. If you bought that same $100,000 home but stayed in it as long as possible, then your investment could be worth a lot more as even more time elapses. That home could maybe double in 5-years time and become worth $200,000. This is money working for you to appreciate your assets as much as possible and it’ll continue doing so until you say ‘stop’ or hit the sell button. The longer you allow money to work for you and appreciate your assets, the more effective it becomes. This is compounding interest. Einstein once said “compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t…pays it”. In other words, put money to work for you. Real estate can be useful in this regards, especially if you have some real estate that you can lease or rent out to someone. Stocks will do the same thing as well, but stocks can be extremely risky if you aren’t sure how to navigate that realm. Bonds are another great financial asset, but there are several different types of bonds that exist. U.S. Government bonds are considered one of, if not the most secure and safest, financial asset on the planet. U.S. Government bonds can help protect your money from the erosion of inflation but there is no upside risk and opportunity for a tremendous amount of growth from U.S. Government bonds. Ideally, corporate bonds would do the same thing as government bonds, but each of those corporations DO NOT have the stability, size, capability and reputation to protect your money from inflation that the U.S. Government has. Stocks have more upside potential but their ground tends to be a little less stable. This is when corporations do better than U.S. Government bonds. People have gotten wealthy by purchasing stocks in Apple, Facebook, Microsoft, Coke, Tesla, oil companies, and literally any other company that provides a product or service to society for as long as possible, not by purchasing U.S. Government Bonds. U.S. Government bonds will keep your money (DEFENSE). Stocks will grow your money (OFFENSE). The longer you let your money do that for you, the longer money will find you even more money to work for you, this is compounding interest. Enjoy your life with the people you love and doing the things you love to do with your time while money works for you in the background, literally your entire life.

Warnings: Don’t use or spend your money blindly. If you are going to invest and take advantage of compounding interest, become a student of the game. Learn as much as you possibly can about the potential investment you are considering. This also doesn’t happen overnight. This will happen every night and day. There may be perceived setbacks, but don’t quit. Those perceived setbacks needed to happen to put you into a better position.

Next on The Wealthy You! – OFFENSE; Produce your product abundantly and share it generously, this is production. Production is the means of wealth. It is hard, damn near impossible to have wealth if nothing is produced.

Become The Wealthy You!

The Wealthy You! – DEFENSE

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This week on The Wealthy You; it is irrelevant how much you earn.

What is meant by this is that your income should be and will be fluid. It should ebb and flow with your life, it will have highs and lows throughout your lifetime. You may have a good paying job right out of high school at a young age but which may be dangerous in which there are few people willing to do the job but the people who do accept the job are payed generously, just to keep them coming to work everyday to do such a dangerous job. Then perhaps you get injured from that job and your income falls from underneath you and goes to the lowest income you have had in your life. Who knows how long the injury or other event will have an impact in your life, how long does your income stay low? Then the next work you find is a job that is mediocre in your life that pays a mediocre wage, as an example. Your income will be reacting to events and changes that occur throughout your entire life. It’ll be high and low and in the middle. Preventing your lifestyle from having the same drastic shifts and changes that your income is experiencing will be a major stress relief when your income does drop. This happens by paying yourself first a percentage, minimum of at least 10%, before all your other bills are paid. When you get in the habit of paying yourself first, or collecting for yourself what you work for everyday that you don’t spend, you will always have a pile of cash available when you need it. This will automatically eliminate the feeling of working paycheck-to-paycheck (this is a miserable way of working your entire life). Going to work everyday to pay yourself is the ideal reason why we work, not because it pays the bills (you are your most important bill, if you go to a job that you don’t care for and say “because it pays the bills” but you are NOT paying yourself first, then your comments become hypocritical). Get in the habit of paying yourself first.

When you establish the habit of paying yourself first from every source of income you work for and build, you are also simultaneously eliminating a phenomena that happens when people’s income goes up, called Lifestyle Inflation. Your income goes up then your cost-of-living goes up. This phenomena, despite having a larger income, has led to more financial problems in peoples lives than having a job that just rises with inflation. More money means more access to credit (other peoples’ money), more credit use means more bills to pay to those creditors (bigger house, more cars, fill up the house, do something with those cars) and more bills to others means less money for you, yourself, your retirement, and other you-related wealthy goals. This is a guarantee with Lifestyle Inflation and is a classic ‘it doesn’t matter what you earn or make, what matters is how much you can keep’.

It is important for you to pay yourself at least 10% first and foremost, it is a habit that should be as reliable as eating everyday and drinking water. You will do it your entire life regardless of what you do for income and how much you earn. Why 10% as a minimum though? Good question, there are a few reasons that we will go over throughout this program. In stable economic conditions, inflation (the amount of the money supply inflating within the system), rarely goes over 10% year-over-year. In the most recent pandemic year, inflation hit 6-7% for the United States, a 40-year high. 6-7% is still lower than 10%. Paying yourself at a minimum of 10% from each dollar you touch will help protect the wealth you are building from being eroded away by inflation. You are collecting a larger share of your income than the amount the nation’s total money supply grew by in one year. Of course the effects are mitigated when your collection is appreciating at a rate less than inflation, but we will talk more about this in the OFFENSE section of The Wealthy You. This all happens regardless of how much you earn or get payed. 10% is the minimum but the more the merrier as well. There is nothing wrong in paying yourself more than 10%.

One of the biggest components of the DEFENSE section of The Wealthy You is keeping what you earn by managing inflation and keeping it tame in your life. We are all exposed to it everyday in the economic system we live in, but you can reduce the impact it will have in your life by paying yourself first at least 10% and by building The Wealthy You! literally everyday of your life. And it doesn’t matter how much you earn. But how much you can keep.

Next week; being a collector of wealth, but not all the money you earn is yours.

Become The Wealthy You!

The Wealthy You!

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Rules of the Game

I am beginning a new blog program called The Wealthy You. The intent of this program is to create The Wealthy You. It is being designed in a way that feels like a game. A game complete with rules, offense and defense, and a point or purpose of playing and winning. There is always an incentive to play games, even when nothing is on the line when playing with friends or family, playing a game just to exercise your brain is incentive enough to play.

In todays inaugural post we will go over the rules of the game, the rules that are built and designed for you to see continued success, not just once but every day of your life. The rules of The Wealthy You are fairly simple, they have been known in society for thousands of years. Names may be different and change over the years, but the rules are the same. The rules for our game are the roles that money plays in society. There are three main ones; medium of exchange, accounting of value, and the ability to store value.

Let’s go over all three of them starting with medium of exchange; most people understand the exchange part of money, that is shopping. We all shop for things everyday. We buy groceries, cars, homes, appliances, clothes, heat and cold, electronic devices, tools, gardening equipment, and entertainment because we need them and we want them. Without the use of a medium of exchange, exchanging would be trading or bartering. We would trade our cows for someone else’s horses, for example. What would you trade for someone else’s land or house. What could you trade for someone else’s labor to do something that you may not be good or effective at doing. You would have to trade something of value, money becomes a generic means of exchange that everyone would accept for payment. Not everyone would accept a horse in exchange for groceries, but grocery stores will accept money in exchange for their groceries.

The next rule and role of money we will cover is the ability money has at accounting value of assets or liabilities. Without money how could you say Elon Musk is worth over $200 billion dollars? Without money how could you say the least productive people in society are worth nothing? Our worth would be found in our ability to find food and shelter everyday. It is quite possible that we would all be living underneath rocks each night instead of in a bed each night without money. Everything you see in society has a value, and money will put a numerical value on that thing you see, this can include real estate, stocks, bonds, collectibles, items on store shelves, cars, businesses, franchises, professional sports teams and anything else people will produce in society will have a corresponding value attached to it. Money will account for that value.

The last rule and role of money is the ability to store value. We do things and stay productive, we work, we serve the people, we all do things for an income to support our life and to be happy and healthy. What we do with that income when it finally falls into your lap is the important work. You receive your income, then you pay yourself, pay your other bills, and then what do you do with the extra income that hasn’t been spent yet? A lot of people would use that extra income to acquire liabilities, this will lead to a feeling of living paycheck to paycheck. This includes a new car and car payment, maybe another car with a corresponding car payment, maybe a larger house, credit cards and personal loans. This is effectively storing your extra money in liabilities, things that drop in value or take money out of your pocket. Money can also be stored in real estate, stocks, bonds, collectibles and anything you can find that will put money in your pocket or rise in value, those are called assets. Assets are ultimately what you should want to own, not liabilities.

Remember to keep the roles of money in your mind every time you have made the decision to make a financial transaction, that is how the rules of The Wealthy You are to be followed. There is nothing in the Universe that can replace the role of money in society, use it to your advantage.

Every friday will be a new blog post that expands upon this game. Next week we begin The Wealthy You – Defense.

Become The Wealthy You