Unfair Advantage Part 1

Inflation is rising. January 4th, 2000 an ounce of gold cost $282. Ten years later, on December 30th, 2010, the same ounce of gold cost $1,405 an ounce. In the last decade, when measured against gold, the U.S. dollar lost 398% of its value. On January 4th, 2000, oil was $25 a barrel. By December 31st, 2010, oil was $91 a barrel. In 10 years, the price of oil has gone up by 264%. Yet the government claims there is no inflation. Has your pay gone up as much as these two things in the last 10 years? If not then you are losing that amount to inflation and devalued dollars each year and that is why inflation is bad.


The smart person would ask:

What will an ounce of gold cost at the end of the next decade, on December 31st, 2020?

How much will a gallon of gasoline cost in 2020?

What will food cost in the next 10 years?

These are questions most monkeys do not ask. Instead, monkeys go back to school, work harder, pay higher taxes, pay higher prices, do their best to live below their means, and save, save, save.

“I’ll never be rich.” IF that idea is not replaced, the the idea becomes your reality.

“I’d rather be happy than rich.” Why not be both? Thinking you can only have one is caused by limited thinking.

“I need job security.” Security and freedom are exactly opposite. The more security you desire, the less freedom you have. That is why inmates in maximum-security prisons have the least freedom. People/monkeys are trapped cause they cling to security.

“I need to invest for the long term in a well-diversified portfolio of stocks, bonds, and mutual funds.” At the start of 2000, the DIJA was at 11,357. At the close of 2010, the Dow was 11,577. A .2 percent gain in 10 years. If Dow performed like gold then it’d have ended around 45,000. Does this mean you should invest in gold? Absolutely not. This means it is best to gain real-world financial education.

Who’s heard this? Live modestly (within your means), have a budget and open a 401k retirement plan, catch up (in other words save, save, save.), pay off debt, work longer, retire later. He says he’d never follow that advice. It’s not only bad, but it is depressing.

Capital gains vs. cash flow. Income statement and balance sheet and how they affect the rich and poor.