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How do you define financial
If I were to ask you,
"What is your definition
of financial freedom?",
what would you say? Do
you have a concrete
definition? Or is your
definition more abstract? Words from the wise
The conventional definition of financial freedom goes "I think there is a world
market for maybe five
something like this:
"Financial freedom comes when you have saved a nest - Thomas Watson (1874-
egg large enough that the interest earned from your 1956), Chairman of IBM,
savings will replace 80% of your current income, adjusted 1943.
for inflation, when you decide to retire."
Maybe not so wise in
However, because of its abstract nature, financial hindsight. However, it is proof
freedom is one of the most abused ideas in the world of that, what may have sounded
sensible in the past may not
personal finance. In my early training as a financial
necessarily be so now.
planner, I was taught to use questions like "Are you on
course to achieve financial freedom?" to provoke action. The same applies to your
(Or, more accurately, to provoke anxiety.) investment portfolio. Which is
why it should be reviewed on
The idea of financial freedom is no conspiracy to deceive a regular basis.
the masses. However, it has certainly sold vast quantities
of financial products and services. How many books, Food for thought
websites, blogs, magazine articles and financial planners
have used the term financial freedom as leverage to sell These are some of the things
something? that I have been reading/
listening to in the past few
But how can you be free if your idea of freedom is
defined by someone else or not defined at all?
I thought that I would share
them with you. I hope that
If the term financial freedom is not made concrete (i.e. you find them interesting too.
defined by you and for you), then there is a danger that
true freedom may never be obtai ned regardless of your Anthony Bolton answers
financial wealth. questions on China
Not for the faint hearted
With that in mind, what is your definition of financial
Jeremy Grantham's Summer
4 Cheers for Gold Not so serious
As of the start of this
month, the price of gold
had tripled in value over
the past 10 years.
A number of prominent
financial experts argue
strongly that this trend
Here are 4 reasons f or considering adding some Did you know?
exposure to gold to your portfolio.
25% of the total medical
1. If adjusted for inflation, the current price of gold is only expenses that we face are
at 30% of its all time high (reached in 1980). usually incurred in the last
year of our life.
2. There is a lot of evidence that indicates that the price
of gold follows the monetary base (i.e. bank deposits and
currency) over time. Over the past two years, the
monetary base has increased greatly. In order to "catch The views expressed here are my own.
up", the price of gold would have to do the same. They are not necessarily shared by
AES International. They are subject to
3. Many of the world's developed nations, including the change at any time based on m arket
US and members of the European Union, are currently in and other conditions. This is not an
the throes of a major monetary crisis. This has already offer or solicitation for the purchase or
sale of any security and should not be
struck Iceland and is a looming threat in countries such
construed as such. References to
as Greece, Spain, Portugal, Italy, and Ireland. specific securities are for illustrative or
informational purposes only and are not
4. Central Banks are buying it. The Russian Central intended to be, and should not be
interpreted as, recommendations to
Bank's gold holdings were recently updated for June.
purchase or sell such securities.
They showed that they have purchased another 200,000
ounces. Their total gold reserves now stand at 22.8
million troy ounces (709.2 t onnes). So far this year, the
RCB has purchased 2.1 million ounces for their
reserves... that's a lot of gold! Other central banks are
likely to follow suit.
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