Where are You Placing Your Value to Build Wealth?

The creation of wealth comes from human effort, which creates value that you store somewhere, possibly in an investment, medium of exchange, speculative asset, commodity, or any other place where you can protect it or grow it. This store of value is your wealth. Most individuals assume wealth is only money. However, money is only one component of wealth. Some cultures focus on monetary value, while others focus on relational value. Each culture prioritizes value differently. In an indigenous society, wealth could be your number of friends and family, how much land you have, or a skill set you have that no one else in the village has. Wealth at its core provides you with a value related to your survival. Wealth, more broadly, is where you create and store your value. This article will discuss the different forms of wealth in the western world. We will look at the various places where you can store value and create wealth; Fiat Money (Medium of Exchange), Investments or Speculating in Businesses (Investments), Precious Metals (Store of Value) & Personal Assets (Survival).

Fiat Money (Medium of Exchange)

Fiat money is a paper note that promises you purchasing power in the future. Trust is the glue that holds the value in a fiat note. Its the trust among citizens of a nation that they will accept and use these fiat notes to transact in an economy. You create value through your labor, and then you place that value in a fiat dollar which is a piece of paper. Since all fiat dollars have failed and devalued, it's a medium of exchange. Meaning it's a place where you can park your value to exchange it in the future. When you exchange that piece of paper with someone else for a good or service, they recognize the value in the fiat note. The whole system relies on trust and the importance of that note remaining intact.

When you stack up fiat dollars, you create wealth. You can grow your wealth by saving and investing your fiat dollars. One challenge with fiat wealth is the value of your currency depends on the trust in the system. If a government decides to print money out of thin air, it will devalue the currency. No currency has ever survived a society devaluing it. Currently, Turkey and Venezuela are going through currency collapses. Prices have expanded so fast that most citizens no longer trust the fiat dollars. Why would you accept fiat dollars as a shopkeeper if their value jumps 1000% per day? You wouldn't because you assume the value of that currency will be worthless tomorrow. It's your trust in the system that determines whether or not you will transact in that currency. In a sense, you don't own your wealth; it's on loan from everyone else trusting the system. If that system fails or devalues, your wealth devalues or disappears with it. Fiat dollars are a medium of exchange and no more. In the next section, we will talk about a store of value and a medium of exchange.

Gold (Store of Value)

Gold has withstood depressions and exorbitant markets. It's a durable and finite metal that does not tarnish. People have used it for money, jewelry, and electronic parts. It's a place where you can park your money, and most importantly, it will never go to zero. Gold is one of the densest metals on the planet, which means you can store a lot of value in it. Each ounce which currently trades at $1800 is the size of a large dollar coin. You could easily throw 50 coins into a backpack and walk anywhere with $100,000 in untraceable wealth. It's a great Plan-B to store wealth. It also has a 6000-year track record of maintaining its value. Gold is a phenomenal asset in totalitarian governments and during currency resets or economic implosions.

Gold is not an investment. It's merely a store of wealth as well as a medium of exchange. You can profit from it if you have it during chaotic times or a currency reset. Warning, you should not allocate all your capital to gold unless you are experiencing societal collapse.

Think of gold as your insurance policy. It's a place where you can park your hard-earned value and then put it away for a chaotic day. Gold is an asset that you can store for 100s or 1000s of years and pass it on to future generations. In the next section, we will look at one of the greatest assets on the face of this earth, which made America the largest superpower in the world.

Business (Investments & Speculation)

The most effective way to grow your wealth is by investing it in a profitable business that pays you to own it. Paying you to hold it is an essential component in growing your wealth. You have worked hard for your wealth. Why give it away for free. When you buy a stock, and it doesn't pay you a dividend, you are giving away your value for free. Most individuals don't sit down and ponder this thought. They buy, thinking the next fool will pay a higher price. Yeah, you have heard about the successful tech investors that have 1000x'd their wealth like Tim Ferris & Gary V. They are part of a 1% that made a highly speculative bet and won. What about the other 99% of investors that got smoked. You won't hear about their financial chaos and destruction because their stories don't sell advertising and books. People are primarily looking for success stories.

If you want to grow your wealth, don't speculate and eventually crash and burn like 99% of other speculators. Possibly you think you will defy the odds. Maybe you will, yet most of you won't. Why not stack the odds in your favor. Forget your ego and focus on what works—investing in highly profitable businesses at a great price that pays you to own them. Highly profitable companies like Oracle and Microsoft will be around for a while because they have durable competitive advantages, large customer bases, high margins, lots of cash, and low debt loads. These aspects mean they will out-compete the majority of businesses. Put your value in the best performers, and they will reward you financially.

Personal Resources

Take some chips off the table by investing in hard assets which you own 100% with no debt. You can do as you like with these assets. Think of your car, land, an RV, a plan, a boat, etc... All these assets provide massive value in times of financial chaos because they enable you to move and live. Preserving your wealth in chaotic economic environments is essential for wealth building. We overlook it because most of our trust sits in the current financial system. When that system starts to crumble, move your value into personal assets.?

Closing Thoughts

Think of wealth as locations or vessels where you store your value. On a weekly or monthly basis, analyze where your value lies. Ask yourself if your value is maintaining or increasing its purchasing power across your portfolio of money, gold, businesses, personal assets, and any other place where you store value. Creating value, storing value, and growing value are essential to increasing your wealth.

Article Originally Published at www.RedtoBlackAcademy.com