One of the greatest desires of every human being is the desire for progress and improvement, and thus, from a very young age, our parents have inculcate us the value of money, although also, with a certain prevention and a subtly rejection, to understand it as a source of all great evils.
But money is not evil at all, although the use we give it and the way we apply the tools it provides, it can be. At this point, as is obvious, I will not go into it; everyone is free to have their own principles and values.
THE SECRET OF WEALTH.
- “Yes, that’s fine!”, You can tell me, but…” how can I make money? How can I start to build something that makes my life bit by bit or suddenly, different from what it is now?”
To this question there is only one rational answer, that is, through SAVINGS and PERSEVERANCE, without losing sight of our goal: the desire for progress and economic health …
- “Okay,” you can argue … “but how much should I save or, what criteria should I follow to make a safety cushion and continue moving forward with the desire for improvement?
Indeed, you are right! A guideline list will help us on this regard.
The Boston Consulting Group, (strategic consulting firm, is the most prestigious in the world) points out some actions that I consider of maximum interest. One of them represents “per se,” the basic beginning of our wealth, that is, struggle to save 15% of our GROSS ANNUAL INCOME.
It is about a reference that, if carried out with discipline and determination, will make us have in 7 years the same updated funds as the one that has served us as a calculation point.
(15% x 7años =105%)
For a better view, let’s see the following example: we consider that if our annual income is € 30,000, we should set our saving goal at € 4,500 per year, which, divided by 12 months, will give us a result of € 375 per month.
- And how do I do it? You may ask.
The average person, aware or unaware, we balance our economy at the end of the month, doing mentally the following approach:
Income = Current expenses … and if there is anything left, we call it savings.
In other words: Income = Current expenses + Savings
The thing of putting it this way is that we leave the most important part of the equation randomly, precisely the last one, since our income is more or less computable in the period of a year, we leave expenses flexible and the possible amount allocated to create our wealth base uncertain.
- Is there any solution?
- Yes, is as simple as it is effective, simply turning around the second part of the equality, that is, doing: Income = Savings + Expenses (fixed + variable)
In this way we firmly establish, as vessel rope to bollard pier, a 15% of our income, (our will to shape our wealth) reducing the amount allocated to unnecessary or expendable expenses. (= PERSEVERANCE in our goal)
THE MASLOW PYRAMID OR THE SAVINGS DISTRIBUTION
The following graphic shows the distribution of your savings, by split it into three levels:
C / 30% – Long-Term Investment, period exceeding 36 months of immobilization (real estate, State Bonds, Unit Links, Pension plans, Criptoro Gold and Silver, with the quality, attention! That the last one is immediately liquid)
B / 60% – Medium-short term booking, from 3 to 36 months. This section is usually made up by some Vouchers and State Letters, Investment Funds, shares… with LIQUIDITY restricted in time.
A / 10% – Liquidity “stricto sensu” in the very short term, 2-3 months of our monthly income, with cash available.
Maslow’s pyramid for savings / investment is a suggestive tool for how to allocate our funds according to the potential needs of its use. Thus, when we talk about LIQUIDITY (10%) we must have available between € 5,000 and € 7,000, if our monthly income is € 2,500 (2-3 times our monthly income in liquid assets)
In this chapter, are included bank credit/debit cards, with the limit (temporary) maximum payment postponed indicated above (2-3 months). This section includes deposits or tools without any profit, but AVAILABLE immediately.
I want to emphasis the UNBEATABLE advantage of having a deposit account in Precious Metals with CRIPTORO GOLD and SILVER which, being deemed as a medium/long term investment, is immediately LIQUID in less than 8 hours WITHOUT ANY KIND OF PENALTY.
Once we know how to create a heritage and how to diversify it over time, our next step will be to analyze the enemies of our funds, which are not few and of a very different types… and I will only talk about those who play within the framework of the LAW.
… that will be … in the next post!
I am Jaime MARTINEZ-BURGOS
Director of CRIPTORO GOLD AND SILVER