Oftwominds.com‘s eclectic range of timely topics include finance, economy, stocks, housing, Asia, energy, long-term trends, social issues, urban planning, work/tradecraft, health/diet/fitness, sustainability, Les Paul guitars and The Great Transformation ahead:
www.oftwominds.com/blog.html.
The key take-away: focus on owning income-producing assets, not a primary residence.
One truism of investing is to follow the lead of those who are building wealth.This chart reveals the foundation of the wealth of the top 1% and the next 9%; business equity, i.e. ownership of enterprises. Compare the assets boxed in red:
The wealthiest households’ primary wealth is businesses and shares in businesses. The bottom 90% depend on the family residence as a store of wealth, and on debt as a means of funding asset purchases and consumption.
Primary residences were once a reliable store of wealth–a store that was accessible to working families who were willing to pinch pennies and save up a down payment.
But now that housing has been financialized and globalized, it is prone to boom and bust cycles like every other risk-on financialized asset. Unfortunately, recent history shows that many middle-class households bought homes at the top and rode the post-bubble burst down.
Those fortunate enough to own homes in bubble-prone regions may benefit from speculating in housing, but playing this speculative game requires cashing out at the top of the bubble–something few have the knack for.
Building a profitable business isn’t easy. That’s why many of the wealthy let entrepreneurs take the risk of starting businesses and then buy the business for a premium once it has proven to be profitable.
But many entrepreneurs refuse to sell out, preferring to hold their businesses as a family asset that can be passed on to the next generation.
It’s also worth noting that the wealthiest 10% own over 90% of the securities and stocks, 84% of trusts (essentially tax havens) and almost 80% of non-home real estate (i.e. second homes and income-generating properties).
Primary residences represent a mere 10% of the wealthiest 1%’s assets.
The key take-away: focus on owning income-producing assets, not a primary residence. The second key take-away:
Don’t finance your assets with debt; finance your income-producing assets with savings and sweat equity, not borrowed money.
It is not accidental that the wealthiest 1% hold very modest levels of debt.
Admin note: I will be busy with family commitments until mid-month. As a result, blog posts will be sporadic and email responses will be near-zero. Thank you for your understanding.
NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, John D’A. ($50), for your superlatively generous contribution to this site — I am greatly honored by your steadfast support and readership.
|
|
Thank you, Hugh C. M. ($50), for your superbly generous contribution to this site — I am greatly honored by your support and readership.
|
Go to my main site at www.oftwominds.com/blog.html for the full posts and archives.
Source:
http://charleshughsmith.blogspot.com/2016/02/if-you-want-to-be-wealthy-dont-focus-on.html
Please Help Support BeforeitsNews by trying our Natural Health Products below!
Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST
Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!
HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.
Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.
MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video).