Historically, whenever a country starts printing fake money in droves (America since 1997) it doesn’t turn out well for the people and the economy. Just look at what’s happening to Venezuela.
This has large repercussions to the economy that may be covered in another blog. For now, let’s focus on the types of money in our current economy.
- Fiat or government money
- Crypto
- Gold and Silver
A successful investor will use all three money buckets to build and protect his wealth. In the early stages of your career, a person should be acquiring fiat money, slotting it away each paycheck until he or she wants to invest in an asset. I like real estate as it cash flows and is a human need (shelter). You can put money into the stock market as well, just don’t touch it, ever, to allow compounding interest to grow your ever growing nest egg.
The future of crypto is unknown, however there is massive opportunity and potential with this type of money. I’m personally putting 5% of my income into crypto. To where this asset class goes, we shall see.
Lastly is Gold and Silver or what some call Gods Money. What such a loft label? Essentially gold and silver have been around before fiat money and will be here after fiat money. The earth produced this resource and it’s the ultimate insurance for your wealth.
Super rich people use fiat money to make more fiat money while buying up gold, silver, and crypto to diversify their portfolio and hedge against major economic bubbles bursting.
Fiat money comes from clients paying you for business services or products along with cash received from rents, interest, and dividends in the market. The more fiat money you have, the more you should be owning assets that give you rents, interest, and dividends, and the cycle repeats.
The truly rich people run their own business which has unlimited earnings upside. I believe every young person should think of their jobs as tools, to learn how to run a business so they can go into business for themselves in the future. After all, business are taxed at 20% while workers are taxed at 40%.
For simply tax reasons, you should own your own business. Not to mention the freedom you’ll receive and power you’ll feel running your own show with a few employees at your side.
What’s more, taxes will in all likely hood go up. Why? The pensions and social security state programs are going to be underfunded, so who will pay for them? The people of course! More specifically, the people working i.e. millennials – who already received the short stick with student loan debt and dismal job prospects as they became adults.
*Disclaimer* I am not a financial advisor or economist. I share content I like about topics I find interesting.