Most of us assume money is safe and stable. People go to work everyday, bust their ass off to cover the bills and try to save what they can at the bank for the future. A better future hopefully. Unfortunately, most people have absolutely no clue what is actually happening with their purchasing power. It is sad to see. I know, I was one of them. It is like swimming against the current and wondering why you are not moving forward.
This is what is happening to money supply: Number go up...
Quantitative Easing... Modern Monetary Policy... Fancy, academic terms to hide the ugly yet simple to understand truth from the masses: more money printing.
In another video, I cover more about how money and our financial system works.
More money supply without much higher growth (demand) leads to currency devaluation or in simple terms: you have less purchasing power. All your hard work for... nothing?
Money in the bank is like an ice cube melting in the sun. Assuming only 3% inflation p.a. will halve your purchasing power in 10 years. Well, the increase in money supply suggests inflation is much higher than 3%. Now. What are the rich doing with their money you might ask? 1 Year Nominal Returns of Stocks: nicely green! It is like there is no pandemic. At least in public stock prices (example: US). Tesla (+130%) taking over the world?
Private Stocks (Angel/VC)? No lack of funding, plenty of liquidity going around. Multi-family real estate? Can't go wrong with concrete gold. The new kid in town: Crypto Assets. Surely looks like there is no crisishere. Talent and capital is pouring into the sector like there is no
Which assets are the rich owning? Well, everything of the above. And more...
In another article, I cover more about the highest quality assets to own.
So what is the rest of the population owning? Well, that melting ice cube we talked about...
Does the money printing stop anytime soon? Well, like a drug addict, you need another shot that is bigger the next time or you will not feel anything.
Can the government print forever? Well, they might need more income at some point.
Where are they getting that income? From the sheeple through more taxation of course!
This is sadly the outcome for the majority (normal employees without financial education). From 100% work they put in, the net purchasing power is roughly at 1/3. I would urge anyone to crunch the numbers themselves who thinks this is unrealistic.
In a different article, I explain more about why equity ownership is essential to grow wealth.
Use this know-how to protect your savings and to boost your capital.
It is time to take control of your finances. This is not rocket science. Everyone can understand this and can improve their financial situation. Can I do this in parallel to my full time job? Yes, easily with the right foundation. What can you do to protect and grow your purchasing power?
Lessons: 1) Invest your money in assets. Long-term. The rich do. 2) Optimize taxes. The rich do. 3) Get educated when it comes to money, finance and investing. The rich are.
Best regards, Harry
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