Invest into True Values and Real Assets (I)

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The investing principle is simple. Your time is one of your most valuable assets. You can't buy it for your money -- you can't buy it for all the money in the world.

Invest your time into the true values. If your money is being parked onto your savings account, its value is being eaten by the effect of cumulative inflation (caused by creation of new money that doesn't have any direct link with the true values and real assets). So, invest your money into the real assets that you can buy for it.

Now the key questions arise: "What has the true value?" and "What can be considered as a real asset?"

Well, it's perhaps easier to start with finding examples of what has NO value and/or should NOT be classified as an asset. Let's take a look to just some of them being most commonly erroneously thought as having value and/or being an asset.

* Information that you do not use and will not use in the nearest future has no value. In a while it is outdated any way. This clearly implies that one needs to be selective when using his/her time (and money) for obtaining the information.

* There is no point to invest your time and money into the education if you do not plan to apply your new knowledge for creating value. Similarly, your skills are worthless if you do not use them meaningfully.

* Things without or with relatively low user value compared with their cost (like luxury car or bigger house than one would like to own in the downturn periods) that are also not used for generating cash flows, are not assets but liabilities. What they do is that they on regular basis take money out of your pocket without making you considerably happier (compared with the situation where you wouldn't have those things).

In this light it is interesting with the money itself: as a paper or electronic entry, it does not have any value, but we can use it for buying assets and creating things that really have value. Hence, what does not have value, is excessive money. And what is "excessive" depends on our financial behaviour. The later in turn could be considered as a function of our financial education, and our willingness and time available for using it.

Similar appears with the time. Sure that everyone needs some time for him/her just to relax and rethink. However, regarding the rest of the time one's need for it depends on how he/she uses or plans to use it.

Next time we will consider the YES-side, i.e. how the true values and real assets could be identified.

[... to be continued ...]

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