Age old Financial Advices

Age old Financial Advices which are no longer effective to ensure any kind of Financial Success.

After 1971, the laws of money have been changed. In 1971, The US Government has removed the Gold Standard which means that, The US Dollar was no more backed by Gold. It was backed by full faith of Government only. After 1971, The US Dollar doesn’t remain the derivative of gold but it became the derivative of Debt. In short, US Dollar is a piece of paper without intrinsic value in it.

After the US Government, the governments of the other parts of world also removed the gold back up fro money and thus the modern money become Currency. It has no relation with gold. It means that, the Central Government of any Countries’ Bank can print as much money as it want according to the need of Economy & Businesses.

The Best Example is, The US Federal Government has printed US $ 1.45 Trillion in March 2009 out of nothing. The Fed Government has bough bonds from the Federal Reserve Bank and this is how it has printed money in true sense. And this is the reason why age old Financial advises such as Saving money is no longer effective to ensure any kind of Financial Success.

Today if you save money than it means that, You are saving pieces of papers having no intrinsic value. And each time the central banks of world will print more money, the value of your saved money will be reduced automatically and over the time you will become poor no matter how much you save.

So this article is all about those age old financial advises which are no longer effective to ensure any kind of Financial Success in your life. In fact, if you follow these advises, you will surely meet Financial Disaster in the future…!!!

01) Save Money – Once upon a time, this was the golden advise because if you save money it means that you are saving gold of that much amount. But the modern advise is Save & Invest. Once you have spare money on hand, don’t save it but immediately invest it otherwise the inflation will erode its purchasing power.

02) Go to School, Work Hard, Get Good Grades, Get safe and secure Job & Make lots of money – Once upon a time, this was also a golden advise. If someone whose Career span (25 – 65) falls before 1990, than this was the golden advise. Because before the birth of the Internet (1990), there was job security. But after 1990, there is no job security at all. And on the top of this, school and college drop outs such as Bill Gates, Henry Ford, Dhirubhai Ambani, Steve Jobs, Mark Zuckerberg of Facebook and many others became a billionaire. So it means that the Education System is no longer effective to ensure any kind of Financial Success in your life.

Not only this but after the birth of the internet, a High School going kid was started making millions of dollars every year from his Blog, Forum, Facebook Application, iPhone application, Social Networks, Online Games and Internet Businesses. While a doctor who had worked very hard was still struggling in the field to earn few bugs. So going to school and working hard to hope that one day you will find a good job is no longer an effective advise to ensure Financial Success.

03) Invest for Long term for Diversified Portfolio of Stocks, Bonds & Mutual Funds – If this was the effective advise than why the billionaires on this earth never invest in mutual funds and common stocks? Instead of that why they own Mutual Funds and Portfolio Management Firms? Well, because these are the advises for average retail investors who born to live poor. Rich people want more control over the Assets. Stocks & Mutual Funds are the Assets on which you have little to no control while it is advisable that you invest your money in your own Business because you have more control over your own Asset and thus much more Financial Benefits.

04) Retire & the government will support you – Many people around this world depend on the governments for pension. The old mindset is, work hard and retire at the age of 65, get pension from government and after that happily enjoy your life. But after the birth of the internet, it was possible to retire in your thirties or early forties than why to wait up to 65 years to retire?

05) Live below your means – Of course, this is a good financial advise. Spending less than you earn always pay off in the long run. But why not focus on increasing the income especially in the Information age, you can make money at the speed of light?

So the above are the few ineffective financial advises. Do you know any such Financial Advise than comment on this post…!!!