Saturday, July 2, 2016

Wealth Transfers - Part One

Our PERSONAL ECONOMY has several WEALTH TRANSFERS, like the way 
we buy our cars through our lives, infrequent major purchases that 
causes paid interest or lost interest by paying in cash. 
Other money transfers could be, lost money on low interest savings, not even  covering taxes and inflation. Also, the way we pay our insurance with inconvenient level of deductibles.
Some other wealth transfers are our income and investment taxes 
with penalties and fees and business expenses.


How much do you have to save and risk just to compensate 
these money  transfers or leaks in our Personal Economy ?

Our Personal Economy has 3 MONEY TYPES: 1) Protection 2) Savings and  3) Growth
Actions that have to be taken are interrelated but with hard control and coordination on our side.
These actions need a main and central piece to make all the remaining components to work better.

These key piece is called Our PRIVATE RESERVE.


This Key piece is our quarterback of our financial game

Losses generated by money transfers must be measured also in the sense of what 
they could have earned if we had them invested, this is called The OPPORTUNITY COST.
If we do not control it, all these money goes to the Government,  
Banks and other Financial Institutions getting lost for ever.

The Private Reserve is a financial process that we own and control, where
we gain interest, without paying taxes or penalties for the money 
we take out of it by following certain principles.
It's like having your OWN BANK.
This Financial Process recovers interest that we could have paid 
to commercial banks and other financial institutions. 
Also, it recovers lost interest if we had made our purchases in cash,.
Again, this is by using the opportunity cost principle and placing 
that lost interest to generate, instead, money growth for us.





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