Gold is often described by many as the “barbarous relic” of the past. It’s a favourite phrase of gold-bashers everywhere trying to make gold the object of derision. Even legendary investor Warren Buffett criticized gold this way: "It gets dug out of the ground in Africa or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head." Gold not only doesn't earn you interest, you even need to pay storage cost for your gold. Furthermore, many speculators got burnt speculating gold. The long-term total returns of gold are not that fantastic and therefore should have discouraged most investors.
Indeed, gold is one of those investments that attracts extreme viewpoints. Are there still good enough reasons to include gold as part of your investment portfolio? Or should you just forget about investing in gold altogether and focus on other investment vehicles instead?
Whenever I hear Warren Buffett speaks or read his annual letters to the shareholders at Berkshire Hathaway, there are always words of wisdom to be found. After all, he is the Oracle of Omaha, one of the most successful businessmen of the 20th century, and consistently rated as one of the wealthiest people in the world.
Warren Buffett has continually shared bits and pieces of his investment philosophy through a lifetime of memorable quotes where he uses simple, jargon-free language when referring to business and investments. There's much to learn from the quotes and quips by the legendary billionaire investor, which have exerted great influence over my own investment strategies as well. In this blog post, I have compiled 20 of the best insightful quotes from Warren Buffett.
Debt is bad! At least that's what most people think. Are they correct? If not, is debt good then? Well, it really depends. Whether debt is good or bad depends on the reason for incurring the debt, and whether you can afford to repay it.
Debt is a complex concept. If you use debt carelessly and irresponsibly, you'll get into financial trouble. On the other hand, if debt is used in a calculated and intelligent manner, it can help you build tremendous wealth. Therefore, you must be able to distinguish between good debt and bad debt if you want to be successful financially.
What is the difference between good debt and bad debt?
A grateful person is a happy person. Many spiritual traditions maintain this. Even science backs the claim that gratitude makes people happier. It was found in scientific researches that grateful people experience lower levels of depression and stress. They also demonstrate higher levels of life satisfaction, positive emotions, optimism and vitality.
Let me share with you a story of a blind girl…
Ever wonder why most people are not wealthy? Without a doubt, people would love to have some extra money. Better still, they want to have enough money so that they never need to worry about finances again. However, given the opportunities that most of us have in the countries we live in, why is it that so many people can’t achieve financial independence and retire young?
I believe the biggest reason why most people can’t get rich has got something to do with how they spend their money. Media everywhere promoting easy credit and materialistic lifestyles are causing many to develop bad spending habits. With so many people spending much more than they can afford, would it even come as a surprise that they need to extend retirement due to insufficient savings? What’s more, there are enough people who are just one pay-check away from bankruptcy!
Investing is about making money grow over time. The earlier you invest, the more time you let your money grow. Time is critical because of the miracle of compound interest. Compounding means you gain returns not only on the money originally invested, but also on the interest it earns. With the power of compounding returns, a small investment made earlier in life could generate a larger amount as compared to a big investment made later in life.
You stand to gain much more if you invest a smaller sum of money now and stay invested for a longer period of time than waiting until you have a bigger amount of money to invest later. Therefore, it makes sense for you to start investing as soon as you can afford, and as early as you can. To illustrate, say you invest $10,000 at 12% returns compounding annually. At the end of 10 years, you'll have about $31,100. At the end of 20 years, you'll get $96,500. If you stay invested and take out the money at the end of 30 years, you'll gain close to $300,000!
You need to invest your money for your wealth to grow. Otherwise, it will be difficult for you to become rich. I have not come across anybody who becomes rich just by saving money. The fact is, if you don’t invest your money for some decent returns, you will become poorer over time because of inflation. With inflation at work, the value of money decreases as things get more expensive. Hence, the purchasing power of your money decreases over time. With the interest rate offered by banks hardly able to cover inflation most of the time, can you afford not to invest your money? It is crucial to invest your money at some point in your life to be financially prudent. If you invest responsibly on a regular basis, you will eventually be financially free.
So, are you ready to start investing your money? Let me highlight five important factors that you need to consider before you start investing.
People are getting more health-conscious nowadays. Their growing expenditures on gym memberships, fitness equipment, health supplements, organic foods, etc. are testament to this fact. Surely, it’s not difficult for you to find health-conscious colleagues and friends around you. While most people are concerned about their physical health, they don’t really pay much attention to their financial health. Most people don’t have the habit of conducting regular financial health checks for themselves. They simply don't care or don’t know how to.
My friend Joshua Yeary from America has developed an excellent scoring method known as the Personal Finance (PF) Score, which helps to determine a person's financial fitness level. To calculate your PF score, you'll need to establish your net worth and your yearly expenses. Taking your net worth and dividing it by your annual expenses, you’ll get your PF score (PF Score = Net Worth ÷ Annual Expenses).
Kelvin is a millionaire investor and landlord. He is financially free by 39 with his assets generating multiple streams of income to sustain his desired lifestyle. Kelvin owns a multi-million dollar property portfolio in Singapore, Australia and Malaysia. He holds a Bachelor of Business (Dean's List) degree and a Business Management diploma. Read more.
Copyright © 2011 Kelvin Wong
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