Partner in Charity

1) Get out of debt

A great place to start. If everyone loves debt, it is probably the wrong time to owe it or own it. Think of the two controls the Federal Reserve has, interest rates and money supply. They are the ends of a stick, if one is held steady, the other flops all over the place. Inflation was cured after its last rampage by controlling money supply and letting interest rates float. To counter the many recent financial crises the Fed plan has changed, interest rates are being held and money supply is no longer being contained.

Inflation is not higher prices, inflation is a decrease in the value of money due to oversupply. If money is worth less, most things will take more money to acquire. To see the real amount of inflation, look at inflation of the money supply. This makes "official" inflation indicators, the increase in cost of carefully selected and adjusted items, at best worthless, or at worst deliberate deceit. I calculate real inflation as bouncing wildly between 5% and 20%. If our standard of living is being maintained by borrowing, we are spending our future trying to stay even now.

With inflation exploding one of two things will happen. The Fed will continue to increase money supply and interest rates will balloon killing the economy. The Fed will tighten money, creating deflation, killing the economy. Yes they can continue to pull one of the two levers they have to manage this unwieldy money supply machine. There is no direct control, the levers are more sluice boxes directing flows of a huge river while guessing what clouds up stream may mean. They have been lucky to get us into just this small mess, so far.

If you want to be in control of watering your own vegetable garden, you must cut dependence on the upstream robber barons. Quit trusting them to be benevolent toward you. Quit believing them intelligent enough to control nature. The daily news records how they consistently screw up their own lives, they are certainly not qualified to run your life for you.

Only what you own without debt is truly yours.

2) Start to save

Pay yourself first.

If you spend all of your money, or more, it is gone. Forget a new car this year, put 10% of your pay into the bank, automatically if possible. Most of us spend it all, it doesn't matter if it's $50 a week or $500,000 a year. Have money taken out before you get the check, then don't touch it until you are ready to invest it.

3) Invest in what you know

Are you an artist, a doctor, a workman? Consider what you know and the trends in your area of knowledge. A bricklayer that invests in diamonds is probably buying cut glass. A bricklayer that sees growth in his area and buys a local gravel pit may find it creates more wealth than diamonds. When someone calls you about their great opportunity, hang up. Research what you know, and seek out your own opportunity.

Plan your investment, invest your plan. Don't suddenly switch due to a news report or a friend's report of success. If everyone that is excited has bought, who will they sell to? Know well in advance what you plan to do, when the moment arrives, do it. Buy when everyone has sold, sell when everyone has bought.

4) Concentrate your investments in, at most, a few positions

Modern Portfolio Theory suggests 10 or so investments, depending on the size of your bankroll. I've found if I look at 100 investments and pick 10 good ones, my top 3 substantially outperform the next 7. Instead of putting your eggs in lots of baskets, put them in a few. Then watch those few very carefully.

5) Plan and control your own investments

No one cares more about your money than you. You have a huge advantage over professional investors. Professionals get their MBA and dive right into a specialized financial niche. You will not be better at bonds than a bonds pro, or better at trading wheat than a wheat specialist. You can be good at guessing what's next, and learning how to profit in the almost now best sector to invest. If you think metals will take off when China's growth accelerates, you can research iron, gold, and uranium. The bond and wheat trader will still be great at their niche, but that's it. When in a decade or two you decide everyone hates stocks and bonds, you can switch back and by some stocks. If the professional bond trader is still in business, he'll still be great at bonds.

You can be a generalist, you can switch asset classes at will, you can succeed. It is a great advantage.

One big point. Find your own brokers and advisers. If they call you first, hang up. You want someone picked by you for price and quality. If they call you, they want a quick commission, and then it's on to the next sucker. Do your own research, or pick someone after you have researched them. You want to be in charge.

6) When wealth is achieved, diversify a little more

Wealth is created through concentration, preserved through diversification.

7) Travel and discover the asset protection of overseas diversification

Overseas is a valuable diversification once wealth starts to come you way. Law suits in your homeland usually will not touch overseas property. Most countries have had times when they kept their citizens from removing money from the country. Your home country may hit depression, lose a war, accept a totalitarian government, or break up into smaller parts. It will then be too late to protect your family. Whatever happens, you need a safety net, somewhere outside the disaster area.

8) Establish a second home for family preservation

Find a new country that your family loves. Maybe it will be where your ancestors came from. Visit often, establish friends and business relationships. If possible get a second passport. Take your family there for vacations. learn the language and local customs. Yes, it will help you appreciate what you have at home. At some point in the future it may also provide a haven for you, your children or your grand children.

Do not be more dedicated to your country than your country is dedicated to you. If you are viewed as a cow to be milked, your children viewed as property to be expended at a whim; perhaps it is time to prepare to jump the fence. Worse times may be ahead, protect what you have created, determine to live your own life.

Get and read the book written in collaboration by a congressman and a member of the House of Lords, The Sovereign Individual. In spite of their credentials this is an intelligent, interesting read. This book is a high yield $10.00 investment that will show you a new way of thinking about your future. The most critical and enduring of all your investments are those you make in yourself.

Create your own opinion. Do Not, ever, give control of your destiny to another, use many pathways and conduits so if one fails, others survive. Do, always, learn as much as possible. Skip a few of these steps if you wish. Moving to a country with greater freedom to create, and lower taxes on your creation, may be a good move, today. Enjoy the freedom that only you can create for yourself.

Here is a free e-book that tells you how to start your own netrepreneurial company, or grow the company you already have. The internet is fairly easy, inexpensive, and it may give you the freedom and peace that comes from a company that moves with you.

You, your family, and their families may all depend on your wisdom.

Start an action plan, just in case. Acquire freedom now, seek to control your own life. There may not be time latter.

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