By MoneyMorning.com.au
Yesterday we left you with a cliff hanger:
“So, what is the path to freedom and prosperity? The After America investment symposium had the answer to that…
“Your only option is for you to take care of yourself and your family.
“How do you do that?”
Today we’ll show you how to help build your family’s wealth.
Remember, we aren’t God (in case you thought we were).
We can’t tell you exactly what will happen and when it will happen. And we can’t even guarantee our strategy will work.
All we can do is give you our best analysis and advice based on what we know of the markets and market behaviour.
Whether you take the advice is up to you.
We know only a few will follow it. The rest will decide to leave it for another day… or conclude we’re crazy and tell us to stop bothering them with our paranoid ramblings.
How do we know that? Because we’ve had first-hand experience of it…
One in 247
We get letters all the time asking to be unsubscribed from Money Morning. So we unsubscribe them. And we wish them well.
As for those who leave things for another day. We’ve seen that too.
At the “After America” investment symposium we asked attendees to download and read two short essays and one short extract. We suggested they download these during the lunch break. And read them over the buffet sandwiches and mini chicken pies.
It was easy. All the essays are available to download free from the Internet. Anyone with an Internet-enabled mobile device could get the documents in seconds.
The essays and extracts are:
I, Pencil by Leonard E. Read
Richard Maybury’s “Cult of the Masterminds” essay
Chapter 1.3 of Murray Rothbard’s Man, Economy & State (the Ham Sandwich)
The next day, during the two breakout sessions, we asked how many had downloaded and read them.
One lady raised her hand… out of 247 attendees.
Does that tell you anything? Maybe 246 people just had no interest in reading these essays. Although we don’t think that’s true as many said they would get around to it.
No. The point is, it’s easy to put something off. The procrastinator’s mantra is: Why do today, what you can do tomorrow?
That same attitude infests the brains of many Aussie investors. They figure if they don’t do something today or the next day, it doesn’t matter, because worst case, at least the government will help.
Wrong. Ask any pensioner today who can’t rub two pennies together, what life is like on the pension. They’ll tell you they wished they’d done more.
Of course, it’s not all their fault. They just fell for the government spin that they’d be cared for in old age.
But the fact is, the government won’t look after you. The only one who can look after you… is you.
Help Your Family Build Wealth
One attendee at the After America investment symposium told us he was worried about the future for his two daughters. He said he wanted to give his daughters some books to read so they could understand what’s happening to the world economy.
His daughters are in their 20s and 30s.
Our advice was simple. He should suggest they read a couple of books (Henry Hazlitt’s, Economics in One Lesson was one of them). But if they don’t look interested, don’t press it.
As we say, the only one who can look after your wealth is you. If your family members choose not to look after their wealth, you can’t force them.
But that doesn’t mean you can’t help… subtly.
If you can afford it, why not save for yourself and save for them too. Even if they’re all grown up. Obviously, it’s better to start when they’re young, but in reality, it’s never too late.
You can start by saving money in a bank account for them. But that shouldn’t be the end of it. If you believe in sound money, then give them sound money as a gift.
We don’t mean for their birthday or Christmas. Just an “I-thought-you’d-like-this” kind of gift.
Buy them a silver coin from the Perth Mint or any bullion dealer. At today’s prices, a one-ounce coin is $40-$50. Tell them it’s pure silver. They’ll enjoy it. And chances are they’ve never seen a silver coin before. So they’ll be curious.
One day (who knows when), they may even ask you how much it’s worth. Or how it can be worth $40 when it only has $5 printed on the coin.
Then you can start explaining the value of money. The important part is, if you do it this way then you’re talking about it on their terms. They won’t see you as an old crank, hoarding your silver coins under the floorboards.
Again, don’t stop there. Keep saving.
It Shouldn’t Be Illegal to Invest
When you’ve saved $500, think about opening a stockbroking account. You can buy shares in a company for them. If they’re under 18, you’ll need to hold the shares in your name.
Only a government would make it illegal for under-18′s to invest. We guess they hope the longer they can prevent people from investing, the more likely they are to not want to invest… and therefore look to the government for support.
Now, as far as stocks are concerned, our shtick is small-cap stocks. But for the first investment, we’d suggest something less exciting. Say, a good dividend stock.
If the stock pays a 5% yield, that’s $25 a year they’ll get in extra pocket money. It’s not a lot. But it’s a start.
Remember, thanks to government laws (supported by trade unions) that make it hard for youngsters to get part time work (minimum hours and minimum wages), they need to come up with new ways to earn a living.
So, rather than giving them pocket money, why not invest a few hundred (or thousand) dollars for them. And let one of Australia’s blue-chip companies pay pocket money to your kids instead?
That’s not a bad way to teach them about saving and earning an income.
And maybe one day they’ll ask why or how the company keeps sending them money… for doing nothing. That’s your chance to explain about capitalism and profits and how this is what creates wealth and prosperity.
The Next Generation of Entrepreneurs
With any luck, you’ll help nurture the next generation of entrepreneurs. Or at the very least, a generation that has learned about how markets work and how to make money.
So that by the time they become responsible for themselves, they’ll know the path to prosperity doesn’t involve relying on the government.
If they’re already adults, think how great it would feel when the light bulb goes on and they tell you they finally “get it”.
Bottom line, it’s about getting yourself in order first. Once you’ve done that, you can help your family get in order too.
Of course, if you can’t be bothered or you think the government will look after you, then good luck. Let us know how you get on.
But if you don’t want to risk that. Then take our advice. What do you have to lose? If you take care of yourself and help take care of your family, you can be sure the wealth will follow…
Cheers.
Kris
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