10 principles of inspired investing

investing
In today's faith-based global economy, hard-earned assets can suddenly disappear or even become liabilities without a solid foundation of hard-owned assets.

Most of life is spent working for a living, enjoying our precious free time with family and friends, and hopefully making wise financial choices for a brighter future.

But in 2008 the rules changed dramatically, the 'wealth-effect' slammed abruptly into reverse, leaving millions of investors struggling for direction and hope.

To navigate the turbulent changes in the economic tides, some rely on their gut instincts. Others rely on the advice of financial experts and a few are able to learn and discern the changing times and then make truly inspired investment decisions that will preserve and grow wealth over time.

While no one can predict the future, learning to live by inspired principles rather than ever-changing polls means; learning from the past, being prepared in the present while planning for the future.

Here are ten key principles to help you achieve inspiring investment success in 2008 and beyond -- no matter how depressing the news headlines are.

1) DON'T CONFUSE SAVINGS & INVESTMENT
Millions of Americans used their home as an ATM machine over the last five years. Your savings, whether in cash, home equity or precious metals is your safety net. Investments are longer-term growth assets with higher risks, fluctuating in value during changing market conditions, but should grow over time. Investment capital often uses debt to leverage growth, but using savings to leverage debt is dangerous and helped create both the housing boom, and subsequent bust.

2) A STRONG CURRENCY = A STRONG NATION
"The destiny of a currency determines the destiny of a nation," according to Dr. Franz Pick, a noted free market economist. With today's dollar retaining a mere three cents of it's original buying power a century ago, it's easy to see why the world sees the U.S. as a nation in decline. Debtors become slaves history teaches us. Reversing the dollar's decline seems remote, given our debt and deficit addictions. Gold is now the world's only currency that has retained a store of value over time, buying roughly the same goods or services today as it did 300 years ago.

3) BAD POLITICS DRIVES OUT GOOD ECONOMICS
Gresham's Law says that "bad money drives good money out of circulation." Sadly, the modern U.S. dollar has become 'bad' (or fiat) money ever since the government drove 'good' money out of circulation, starting in 1965 when the U.S. removed the silver from our coinage. Likewise, bad politics drives good economics out of circulation. For example, good economics regarding the present oil crisis called for more oil drilling and refining decades ago, but pandering to the environmentalist-driven agenda (bad politics) has created today's oil squeeze.

4) DIVERSIFY ASSETS FOR GROWTH & SAFETY
Owning a variety of assets is the best way to protect and grow wealth long term. "The Bible has more verses discussing wealth and money than it does discussing salvation," Larry Burkett once said. Regarding diversification, Eccl. 11:1-2 says; "Cast your bread upon the waters, for after many days you will find it again. Give portions to seven, yes to eight, for you do not know what disaster may come." Socially responsible investing, like the new "terror-free" investments, are a smart way to cash in on major cultural trends ahead of the crowd.

5) COMMODITY BULL MARKET CYCLES LAST DECADES
We Americans have been trained to think, live and plan short term, but economic cycles often change unnoticed and run 15 to 20 years. Stocks enjoyed a great run, greased by low interest rates and inflation from 1982 to 2000, then the bottom fell out. Commodities kicked in starting in 2001 and have been rising ever since. Prudent investors and savers are discerning this change and adjusting their portfolio accordingly. Although some speculation has boosted the cycle and periodically must be purged, the trend toward higher energy, food and metals prices may not end until 2024.

6) NEVER BUY OR SELL ASSETS DURING A PANIC
Market manias are a product of the modern, electronic "trader-age" we live in. A panic is when our basic instinct quickly shifts to fear from either apathy or greed. Speculation can drive prices up or down in the short term, but it is the fundamentals on which sound investments must rest. When others panic, sit tight.

7) FED/GOV'T BAILOUTS DISTORT FREE MARKETS
Neither 'emergency tax rebates', 'gas tax holidays' nor 'homeowner assistance programs' are the right solutions to restore economic prosperity in the U.S. Every time the FED or government changes the financial rules, they further distort the free market and create unintended consequences needing further legislation. It all ends in socialism.

8) PRACTICE CONSUMING LESS & SAVING MORE
Inspired investing means redefining 'wealth' from having an abundance of 'things' to controlling our 'wants'. The opposite of a 'capitalist' is a 'consumerist', which is someone who forgoes future income for present pleasures (i.e. "I'm spending my children's inheritance" bumper sticker). Inspired investors do just the opposite because their goal is to build a legacy for future generations. Americans need to start saving money again by living within their means and shunning debt.

9) GET EDUCATED ON INFLATION-PROOF ASSETS
Inflation can kill the best-laid savings plans. Bonds and stocks can get walloped during periods of rapidly rising prices. With inflation now running at 15-year highs, many assets are now producing negative returns, such as savings accounts and other interest bearing investments. Wise investors are moving assets into a variety of alternatives including; Treasury Inflation Protected Securities (TIPS), commodities, energy, collectibles and real estate. The best strategy is always to get educated first before jumping into any new investment.

10) PREPARE FOR UNEXPECTED WILD CARDS
Economic wild cards are dealt out to the world virtually every day ranging from natural disasters... to economic surprises... to terrorist attacks. Family preparedness and community involvement are important, but economic preparedness means having a pool of liquid capital in reserve to cover unexpected crises. With political change comes new economic risks. Wild cards require trump cards. Having a supply of gold and silver coins on hand provides a safe haven in today's stormy world.

"The great strength of gold throughout history has not been that you make money by holding it, but rather you do not lose. That ought to remain its best credential". -TIMOTHY GREEN, International gold expert

FURTHER READING:
10 rules of gold investing
True-Wealth.com


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Growing volatility on Wall Street is driving demand for safe havens like gold. The loss of confidence in paper assets is moving investors to search for tangible alternatives.


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