bonds

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. Acquisition of defensive-minded assets.

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This week on The Wealthy You!; Acquisition of defensive-minded assets.

Generally speaking in the world of financial literacy, there is a concept of assets and liabilities. Assets are things that puts money in your pocket or bank account and liabilities are things that take money out of your pocket or bank account. Both are very important and both are needed in ones life. However, acquiring too many liabilities can risk putting poverty in your life. And having just assets with no or little liabilities can lower ones quality of life as well. For example, a household of four, husband and wife with two kids. The husband and wife both work and bring an income for the household, so they become assets for the household. With that income they pay the mortgage and the other bills, buy food and purchase all the things their children would need for school and other pursuits. The money begins to disappear as soon as they earn it. The things that make your money disappear are liabilities, but it isn’t a waste of money because you get something in exchange for it (money is a medium of exchange). Think about heat in the winter, AC in the summer, transportation to get to work, school, the store and anywhere else you want to go. Vacations. Entertainment. They all take money out of your bank account, that is what liabilities do, but you get to enjoy life. All of that would be impossible though without you first becoming a valuable asset for your household. The purpose of this post is to talk about defensive-minded assets.

Defensive-minded assets will help protect your household from your money being eroded by inflation and by getting you in the habit of paying yourself first before you pay your other bills, at least 10%. Defense means using the income you get from a single job to become wealthier and more valuable (Offense will be going from a single income from a job to building and owning your own billion dollar business). This means paying on a mortgage and owning a home versus paying rent for an apartment. After 20 years of paying a mortgage, you get some money back when you sell. Renting the same place for 20 years will get you nothing when the lease ends and you move out. Not even a security deposit, typically. Wealth is about the ownership of assets, when you rent you own nothing. Renting has a purpose for transient folks who plan on moving about every 1-3 or 4 years. Home ownership is more of a long-term play and strategy.

For those who do rent an apartment, the purchase of stocks, bonds, gold and other assets that appreciate over time can be more appropriate. Stocks tend to rise when interest rates are low. As interest rates rise, stocks tend to not rise as much. Interest rates are raised to help fight inflation. The higher inflation goes, the higher the interest rates will need to be. U.S. Treasuries (bonds) are viewed as some of the safest assets in the world. When there is a crisis somewhere in the world or an economic crash of some sorts, people flock to U.S. Treasuries. They are notoriously stable, with minimal wild swings in its price. Purchasing U.S. Treasuries alone, as a way to pay you first with every paycheck, can be a decent strategy for The Wealthy You!-DEFENSE. They also pay a dividend each month, the more bonds you own the higher the dividend. Stocks can be similar, but tends to lean more towards The Wealthy You!-Offense, they follow a completely different road. Speak with a financial advisor to learn more.

Gold and real estate are other defensive-minded assets. There is a website called www.jmbullion.com, where you can purchase gold, silver, platinum and other types of metals. You can get coins and bars from around the world, gold notes, and jewelry. There are gold currency notes that contain 1/1000th to 1/20th Troy oz of pure gold that start at about $3.50 and goes to about $175. And they have 1 oz gold bars that are $2,000. The price of gold is always changing, which means the price of their gold is always changing. Check often and maybe you might find something interesting. Purchasing gold jewelry from a local jewelry store is another way of acquiring gold. Owning real estate instead of paying rent is another strategy of The Wealthy You!-DEFENSE. A portion of each payment you make goes to your house, which you own. That doesn’t happen with renting.

Having your own place to live and rest your head each night, purchasing bonds or U.S. Treasuries, and purchasing gold and other metals, combined with each of your paychecks will help protect your money and wealth from inflation. Getting in the habit of doing this before starting your The Wealthy You!-OFFENSE will allow you to collect billions of dollars’ worth of gold, bonds, stocks, and real estate once your offense does begin.

Next week on The Wealthy You!; making or not making decisions.

Become The Wealthy You!