As you plan your portfolio, it helps to know what things are really wealth. A lot of people confuse wealth and money. They think that the two are synonymous. This is not true. Money is what you use to measure wealth. Wealth is something you use to make something else. Particularly with the current usage of paper currencies, we have lost the utility of the gold and silver coins of the past.
In becoming a wealthy person, the goal is not to accumulate stacks of paper money. The goal is to accumulate time, knowledge, skills, water, food, shelter, clothing, relationships, work ethic, certifications, and authority. In pursuing these things, you are pursuing wealth. The problem with a lot of investment plans is they stay too liquid. All of the capital is in the form of digits in a digital bank account. This is not helpful. A wise investor spreads out their investments in multiple baskets, including the variables listed above. Avoiding the principle that money is not wealth will lead to disaster when the next recession comes. You will be caught with most of your portfolio in a banking system that is failing. Although many government agencies claim to insure depositors, the cold truth is that no government in the world has the assets to fully insure all of the bank accounts for every individual in the world. They are playing a political game of chess with us. Do not be the victim.
As you prepare for economic issues, always keep in mind that you should have multiple outs in case of recession. Many people regret their poor decisions after the recession. Do not be one of them. Make wise decisions before the recession, and you will be one of the happy few who is successful in life.
Wise decisions include thinking about what experts are saying, buying low and selling high, and never investing above your actual capital level. People who go in debt to fund their portfolio end up floundering when the recession hits. Prepare yourself for the next market failure, and you can capitalize from it.
Martin Lustgarten is devoted to making your life as an investor easier. Martin likes seeing the happy smiles on peoples’ faces when they learn his tools.
Martin can be reached at his Linked In account. He looks forward to hearing from you.