|Iranians Stand In Line Waiting To Exchange Currency|
This can and should be taken as a warning that it is very important where we store the wealth we have accumulated over the years. An article presented to me some time ago delved into the subject of high-earning Americans, where their wealth came from, and just as importantly where it was stored. This got me thinking about the so-called wealth effect as well as how all that wealth was held. The really big earners in recent years have benefited greatly from the surging stock prices as much of their income has come from financial markets and gains in equities. Many people seem to think this is the way things will continue and the hope of our future. When you have more than you need or want to put money away for a rainy day where do you store it? If you rated people on a "wealth chart" by how many tangible assets they owned you might be shocked to find much of the wealth people own is in paper and this can be full of risk. In our world today the possibility of cyber-crime or cyber-theft takes this to even a higher level.
|Safely Storing Away Wealth Can Be Difficult!|
The reality is that most people do not understand money and wealth. Myths about both run rampant and become intertwined with deeply rooted personal feelings passed down from parents or acquired. These feeling often muddy and skew how people deal with wealth. An example would be anyone who felt deep down that money was the root of all evil would react to winning the lottery far differently than someone with the belief that you can buy happiness. I have even heard poor people say they didn't see much point in winning a lottery of several hundred thousand dollars because "that's not much money." When the B word "billions" is so prevalent in society today it is understandable many people live with distorted values.
Truth be told most people are not overly endowed with discipline this includes many people that amass a fortune. This often means that many wealthy people tend to "misplace" or lose track of where they have placed their wealth. Sometimes it is simply put into a system that is on autopilot. Years ago I purchased a property from a doctor on contract. The doctor having also bought the property on contract had me just send the payments to the man he bought it from so he would not be bothered. After many years I contacted the doctor to discuss a discount for a cash payoff and his accountant discovered the first seller had been paid off years before but continued taking the money he had no right to. The doctor was shocked and getting his money back proved difficult.
|Americans Stash Money In Paper Promises (click to enlarge)|
When you subcontract out control of your wealth or turn it over to a money manager you often get promises but no ironclad guarantee. Confidence in a money manager can quickly be dashed, all the people invested with Bernie Madoff discovered just how suddenly things can go south and promises turn hollow. While it has become both fashionable and common in recent years to let someone else who knows and specializes in financial planning and markets to control this segment of our lives I feel it is a big mistake and a dereliction of duty. Wealth should come with a warning notice saying "Holder Beware This Commodity May Vanish Spoil Or Grow Obsolete At Any Time!"
For some time, I have felt the current trends that have unfolded since interest rates soared in 1979 to halt inflation have become unsustainable. This means that a new reset will have to occur at some point. You can expect promises to be rewritten and broken. Rules will change as we go through the wash. If I'm correct it will be interesting to see how a future reset which is again likely to involve a massive transfer of wealth will affect financial equality as many people see their assets rinsed away as society is put through the wringer.