I’m trying to get into the habit of writing every day. When I get into it, I love it. The way you can lose yourself and just put down whatever pops into your head and try to organise a story to teach a valuable lesson onto digital paper. I try to talk about the lessons I think have served me well, so far! Anyway, I had some thoughts on one of my favourite topics…Money.
Money can do a lot for you. It can help you buy food and shelter you need to survive. It can give you experiences that your grandparents could only dream of. It can give you lots of toys and even buy you lifesaving surgery if you ever needed it and it was available. So, what I’m getting at here is that money is pretty important.
The very fact that you save money to invest or speculate with shows that you prefer the money over the ‘stuff’ you could buy with it. You could just have easily gone out and spent that money on the latest iPhone or Tesla vehicle. But, instead, you chose to save it. Why is that? I imagine it’s because you want to turn that money you put aside into more money.
I prefer having the option to buy ‘stuff’ than the actual ‘stuff’ itself. That option is Money. I’m not going to go into what I think a good money is and is not. Aristotle did a great job in defining what a good ‘money’ is. I think gold fits the bill quite well. Cash is what many consider money.
Having more options gives you simultaneously more freedom. More freedom to do what you like, when you like, and with whom you’d like.
When you have enough relative to your true wants and needs, you can purely focus on whatever you want. Continuing to add value in whatever you love to do seems like a good idea to me. But the choice is entirely yours. Adding value makes peoples’ lives better. The willingness of people to hand over money in exchange for you to deliver a good or service as agreed is such an efficient way to trade. The effect of course, is that you will probably make more money as a consequence of adding more value.
You will likely be able to take more risks as your future life is protected by having your own margin of safety. The margin of safety being the amount you need to fund your basic needs and lifestyle over a period of time that you deem necessary. When you take these risks, you will mess up. Everyone fails on the road to success. This protection you need is money. Your personal margin of safety is suited well by money. And the higher your margin of safety, the better.
However, as you may be thinking, the law of diminishing returns becomes apparent the more money you have. But at this point, if you’re truly doing what satisfies your internal needs and wants, you’re truly free. Money can make you free in one sense – a financial sense. This is but one path to freedom. Freedom from disease and pain, both physically and mentally, are other areas that I think deserve attention too.
I’m still working on getting there. Maybe some, if not most on here are as well.
Approach to Investing and Speculating
I was also thinking about an approach generally to investing. My aim is to be better at allocating money to generate more money in relation to my work ethic and general interest in this business. I like to keep the risks low by working with exceptional, highly moral and ethical people and management, and by buying when the business is stupidly cheap based on the emotions of others’. It needs to have low capital costs or be able to maintain very low sustaining costs over a long-time period. There are many other things I look for before making an informed decision, but I wouldn’t start digging deeper until the above was met.
Who are the investors in the company? Who am I partnering with? What’s their story? How much does it cost and how much does it make? And, importantly, what’s it worth?
These investments that qualify for me tend to be royalty companies. I particularly like the ones that have the ability to make money! Especially at a low cost. I enjoy getting paid too so dividends are a bonus.
Speculations are a similar but different beast. The same logic applies and I’m generally looking to partner with the very best speculators at an extremely cheap price with the very best operators. I’m looking for very small, very volatile businesses. They must have the ability to be very, very large though. Huge amounts of Fear needs to be present in the market in order for it to be extremely cheap. This is money you must be willing to lose. You are placing an educated bet in the most efficient and effective way you can think of.
At present, I’m a speculator, not an investor. Until we get any epic bargains in the parameters I want to see in any investment, I wait.
Currently, commodities, in particular gold, silver, and uranium look very interesting to me. Copper less so, but still fairly interesting. I look at copper plays as a hedge in my thinking. As humans make progress, more copper will likely be used, unless of course, some new technology materialises that makes coppers use less necessary. Who knows?
If you are like me and consider accumulating money like a game of adding value, then it’s nice to meet you. My plan is to get enough until diminishing returns kick in and then reassess. Until then, my focus is on fast money accumulation and effective, intelligent allocation of this money until I get there.