Again going back to my blog post “The Millionaire Blueprint” I mentioned strictly that you must save your money, however what I really meant was just keep enough cash liquid for you to live out 5 years and invest the rest.
Look I’m a risky guy and I do risky things, well sort of – Like jumping on to a running train moments before it departs, literally seconds(Not always just sometimes Haha). Well I do like to get my kicks from such things but the bigger picture is about understanding the history of money and how to play it to your advantage.
Going back to ancient history and de-valuing of currency – Yes the thing you call money is actually fiat currency! In the old days currency or the notes were actually receipts that were printed for Gold, i.e the currency notes were backed against Gold and printed as a receipt for it. Ancient civilizations – The Romans, The Babylonians etc, all used Gold as the form of wealth and they dealt in Gold in exchange for products and services. However when things got bad- like heavy expenditure on war and so on- they got depleted of a lot of their Gold and began to print currency receipts without backing of the Gold. This is called de-valuing because the replaced an object of value (Gold) with an object of no value(Paper Currency). They went a step further and began to mix their coins of Silver and Gold with base metals like copper and steel. Essentially de-valuing their wealth. And once they began to not have enough Gold to back up the receipts(or paper Currency) they began to print and print up to infinity the paper notes. People began to use the currency notes and forgot about the Gold that was backing it up.
In basic economics what they did essentially was increase the supply of paper currency to the extent that it’s value got reduced (because if there is an increase in supply of anything it’s value decreases). Sooner rather than later once the Gold ran out because of heavy war expenditure and compensation to those nations they once ruled – they ran out of Gold and were only left with the paper notes(that too in abundance). And so the paper currency began to lose its value(high supply of it) and gradually went back to it’s true intrinsic value – Nothing!
This has happened with every single civilization that de-valued it’s currency in exchange for paper currency or notes. A lesson history has taught is that every single civilization that did this – went bankrupt. Every single time de-valuation happened in the end the paper currency notes went back to it’s true intrinsic value -Zero.
Fast forward to this day and age and our civilization has done the same. Nixon went off the Gold Standard in the late 60s and early 70s and basically caused the same thing. Once the notes get printed to infinity, which is happening – It will return to it’s true intrinsic value of Zero and become worthless. And then the IMF and Monetary Policy Makers will come up with a new worldwide monetary policy – It’s going to happen believe it or not. I know it’s hard to believe that your currency notes will be worthless one day but if history is an example – It has happened with every civilization since the dawn of time.
So how do you stay one step ahead of the curve? – Buy tangible assets, a lot of them(Gold, Real Estate, Priceless Paintings, Money making companies etc) . Ditch the cash. Cash with inflation will decrease in value as the years go by, so if you have a truck load of cash it’s going to worth way less 10 years down the line. However the Dollar remains all powerful now because the US has the highest Gold reserves in the world.
They don’t want you to buy Gold because they can’t print it! There’s only a limited quantity of it available and trust me, going back to the history lesson, whenever a fiat currency went to it’s intrinsic value of zero – Gold and Silver skyrocketed back to it’s true intrinsic value of thousands.
You need to keep your money working for you at all times and not work for money. So keep what you need to spend and invest the rest in tangible assets and if you like to be a little risky buy quality stocks, bonds, etfs etc.
Stocks are intangible assets but they’re great in the long run especially if you have done a detailed research on the companies and find it a good investment.
That way when things get bad and hit the fan you’re true worth is always in tangible items and not in depreciating cash.
Hence the saying by the Great Robert Kiyosaki – “Saving is for losers and cash is trash”
Don’t believe me? -Watch this!
Have a great week!
Don’t say I didn’t warn you. Very few people actually get this. So stay on the educated side of the wealth transfer.