Been seeing and hearing a lot lately about investing.
Got me thinking about what it means to different people.

I know a girl who is 31 year old professional and successful. She works for a big name mining company and earns a pot load. Has a half million dollar mortgage and her own car and some employee shares.
What does investing mean to her? She salary sacrifices some of her money to a broker who everyone in her office uses because he tells her, not everyone lost in the financial crisis.
She has NO idea where money is, how much she has left or even how shares and companies work.
My mother is similar, She gives a planner $6000.00 a year and he invests it for her. Its only when she lost $6000.00 principle she had me look at it and her agent had her paying premium fees on volatile market investments. Risking her money for POTENIALLY high gains, telling her 25% a year return guaranteed.

Been visiting a lot of websites that talk about the ‘basics’ of personal finance.
Some list home ownership as a base skill.
Others talk about ‘good’ debt.
There seems to be no set or agreed basics people should aim for.
For me Investing is something you do with a percentage of your savings when you have NOTHING else owing. A fool puts all his eggs in one basket.
I see people at my work place discussing how they bought shares in a super market in China because the company is posting a good quarterlies and their sales projections look good.
Do you work in a super market?
Do you work in china?
Do you work in a supermarket in china?
Then why would you trust your money to them?

I’m a mechanical fitter.
I work with tools in the heavy mining and engineering fields.
Turning the spanners keeps the money rolling in for me.
What would I invest in?
Rio Tinto mining groups company Pilbara iron because I worked there for four years, I saw the company from the ore pit, to the crushers, the rail network transporting the product to port. The stockpiling and ship loading facilities, the high employee benefits, all the nuts and bolts. This is how you should see the companies you invest in.
I would buy shares in Snap on tools because I use their quality products and enjoy there superior return policy.
Komatsu or CAT companies because I fix their products.
I see the product. I see the companies, I can see the people supporting the whole thing. I can tell you the general industries feelings towards these products.
“Snap on quality”
“CAT engine reliability”
“Komatsu land planes on outback highways to deliver parts”

A soldier would invest in weapon manufactures or military vehicle manufacturers.
A nurse in a pharmaceutical company, a marketing executive a communications or media company.
Having access to unlimited companies is a marketing advantage of brokerage companies to expand sales and companies to secure maximum capital in floats.
It should never affect what you invest in just because the choice is there. Financial reports are massaged by companies who want your money.
You cant trust advice on a product from the sales man trying to sell it. No, you find reviews from people who already own it, experience is the wisest teacher.
I think people forget what investing means. When you have a little something you do NOT need you can lend it out for an agreed rental.
You wouldn’t invest in a vineyard if you don’t drink wine. Why, because the numbers or a broker says so, why would you invest in a supermarket in china?

Seeing is believing. Trust only what you know. Not what your told.

Onto the basics of personal Finance.
Number one, there is no good debt/bad debt.
Just debt. IF a debt is offset by an income this is good income, not good debt.
If you did not have the debt, the income would be even better. That is a debt reducing an income. That’s what debt does.

1. Income and expenditures.
Have an income.
Know your expenditures. Expenditures should never exceed income.
Rid yourself of ALL debt.
Have savings.
In this order.
No if, buts or maybe’s. If you can’t manage this then what makes you think you can manage being rich. Get a rich person and a poor person and have them receive the same income and expenditures and the rich person will always finish ahead of the poor because he understands these basics of finance.

After you have mastered living with in your income and budget, emergency funds, insurance, transport, communications, health care and savings can you even think about investing.

You don’t build the building without a proper foundation. This is true for investing. What good is
$10 000.00 in high yield account if you have to withdraw it to pay for a emergency dental appointment. No, your emergency money should cover this. If it does not then your foundation is not strong enough to support your wealth building.

2. Investing
What do you invest in?
Personally I look for safe return and liquidity. What good is money if you can’t have it when you need it?
I like high interest accounts, stocks in companies you know and trust the products and businesses well versed in their craft.

Don’t invest your entire savings in your higher risk investments. Don’t blindly follow one company or product.
Trust what you see, not what your told.

These are THE two basics of finance.


Master Lewis

It's a confusing question.
How much wealth do you own?
Some people say "I own my house, I own my car."
That's a not the answer. These things are not wealth.
How much wealth do you own? How much of your paycheck do you give away for living costs?
After that, how much do you save?
AFTER all that how much wealth DO YOU OWN. . . . . . . after savings.
Right now how much money do you OWN?
Do you have income from a source other than your wage?
Savings is wealth many would say.

Savings are meant to be spent.
You save for a rainy day, shopping, holidays or retirement. To have wealth you must have portion of money that is never destined to be spent. Only grown in value.
Money never spent is a challenging concept. But if you never spend money what does it do?
It transforms into assets.

Definition of a Slave :

1. One bound in servitude with no reward
2. One who is abjectly subservient to a specified person or influence
3. One who works extremely hard.
4. A machine or component controlled by another machine or component.


Slaves is what most of the high consumer types fall into. They recieve their paychecks.
Then after they pay for rent/morgage, they then buy their food and after this they pay bills. Then comes auto and personal loans and, if they're really bad, soon comes store credit cards. Most are all or a combination of these things.

At the end, they have little if anything of spare coin left over. They trade 40 - 60 hours of their lives a week to pay for the banks mortgage profit, the grocers profit and the electronic stores interest. Bound to servitude with no reward.

Even if they save anything that too will one day be spent.

Owning wealth isn't owning a home with a mortgage. Sure a home can gain equity which becomes an asset but in these days and times it can lose value or the morgage can be called in.

Gambling for an asset is no better then gambling on cards.
Your asset of a home is offset by the debt of a mortgage. Effectively cancelled out on your balance sheet
and neutral. This is differant school of thinking to the norm and is not well recieved.
However its a widely agreed fact by those who have attained financial freedom.

Motor vehicles and boats have so many extra costs with insurance,maintenance and license fees that they could very rarely be called an asset.
Savings is an asset while it's in the form of savings. But as soon as it becomes the mortgage or holiday it ceases to be an asset.
Owning wealth is putting some of your money away forever.
You use this money to create income or purchase an asset that creates income.
Having an income seperate from your main is the very basis for true wealth.

At the turn of last century it was considered good learning if a person put away 10% of his income for this purpose.
More recent surveys of Americas wealthy show a trend of investing 15%.

Whatever you do put away be it a little or alot, some is always better then none.
The idea of saving for your whole life sounds absurd to the average person until you realzse such a small amount over so many years can add up to so much. The interest earns interest.
At the end you dont really miss the dollars anyway.

It's important to start off small with what you can afford. Then grow it as you grow.
As your wealth grows you will see wealth where before you missed it. Financial wisdom is a magical thing. Once you understand money and the two important rules of getting and keeping it, it seems to flow to you in increasing quantities.

A person who is wise with their money is powerful and in control. They know where they have come from and where they are going.

Every great tree has grown from a tiny seed. Put those few dollars away in your tiny wealth seed and begin your massive wealth tree.

"No matter a persons proffesion,
they are both honoured and respected if they understand the laws of acquiring and keeping wealth."



It does not matter if you're a garbage collecter or a kitchen hand. If you are well educated in your personal finances and handle your money with foresight and skill, you can walk the same line as the wealthy because you're on the same road, heading to the same place: Financial Freedom

Master Lewis