Here are four timeless tips for preserving and creating wealth:
- Spend less than you earn
- Develop multiple income streams
- Think long-term and maintain discipline
- Get out of cash and into real assets
The centralized, controlled monetary policy may be leading you down the path to poverty. As governments pump more and more stimulus packages into their respective economies, all they are really doing in the long term is devaluing the currency. As a result, the buying power of each bank note is drastically reduced.
The reason that the rich get richer and the poor get poorer over the years is because the poor live paycheck to paycheck and live in a cash-centric world. The rich on the other hand convert their cash into investable assets such as real estate, stocks, precious metals and cryptocurrencies, thereby avoiding the devaluation of cash.
The rich also focus on creating multiple, passive income streams through these various investment vehicles. Each sector will inevitably cycle through periods of “boom and bust”, and holding a diverse portfolio of assets is how they hedge themselves against losses.
The best asset class, in my opinion, is the cryptocurrency space. Specifically Bitcoin. Investing in a fixed-supply asset like Bitcoin guarantees that the asset will grow over time. There will ever only be 21 million Bitcoin available. Ever! That means that the supply value can never be diluted. And limited supply inevitably leads to increased demand.
Touted as “digital gold”, I expect that the Bitcoin market cap will catch up to, and eventually overtake the market cap of the gold itself. Gold’s market cap is currently around $9 trillion. If (and when) Bitcoin reaches that market cap, each Bitcoin will be worth $428,000. Sure, this may be decades away, but the possibility of creating real generational wealth is right there at our fingertips.
I’d go so far as to add a fifth point to my wealth principles list;
5. Get off zero!
If you have zero Bitcoin, invest even just a small amount.
DISCLAIMER: This does not construe financial advice! These are merely my own thoughts and opinions. Always do your own research and due diligence on the financial markets, and seek assistance from a professional adviser if need be.