Since we are a society on the acquis, in addition to being a country in which it was forbidden to own assets, few of us took off in adult life with a financial portfolio inherited from our parents or grandparents. This means that we have had to build most of our assets from scratch. More and more people are aware of this, but the problem arising is the choice of the relevant assets.
We have been living in a capitalist system for 25 years, which means that whether we want to or not, we can and should accumulate capital. The word “we” here is not accidental, because under the previous regime and in many more countries around the world, the freedom of citizens is still limited in this regard. We all had to work in Poland for 45 years and could not count on a life of assets. Today, anyone can invest and support our budget with passive income from rent, dividends, businesses or securities and the government is doing everything so that we can stop counting on a national insurance state pension. In particular, entrepreneurs must build or buy assets, because most of them pay minimum state contributions, which is not surprising. The return on paid contributions to that institution is mostly negative and, in addition, from the moment of departure from this world, all of it is lost.
Since we are a society on the acquis, in addition to being a country in which it was forbidden to own assets, few of us took off in adult life with a financial portfolio inherited from our parents or grandparents. This means that we have had to build most of our assets from scratch. More and more people are aware of this, but the problem arising is the choice of the relevant assets.
When the value of money was based on gold, listed companies had a solid structure of accounting and increase and could count on the systematic payment of dividends. Today, with the flood of money in exchange debt, nobody counts on dividends merely to increase the value of share prices. The securities market is gradually losing its investment attractiveness and is starting to resemble a casino.
Between 1644 – 1914, when money was based on the gold standard, the price increase was minimal, and in the UK was even slightly negative (1). Today we are struggling with inflation devouring our savings, which in reality is nothing more than a hidden tax, and is caused by an increase in the quantity of money in the market. Every time someone takes out a loan, money for them is “manufactured”.
What do we invest in? Apart from the fact that we should start investing in ourselves and our knowledge, business gives the greatest return on investment. Given that most start-ups quickly fail, we can consider investing in someone else’s business, which is already proven and run by experienced entrepreneurs. If we cannot count on listed companies, then maybe we can take the opportunity of an OTC, i.e. the employee share of a privatized state enterprise? At one time it was possible for them to earn well, but now good opportunities in this sector are lacking. Hence, small special purpose vehicles established for the purchase or construction, real estate, or the wind power plant are beginning to enjoy increasing popularity. Returns from such investments are double-digit, which is higher than most of the assets available in the market can offer, and the level of security is very high, because of the legal structure. Inflation does not affect the return achieved on investment, because as prices rise, these businesses will automatically bring higher profits. Those who are closest to the issue of new money gain most and this is mainly the real estate industry, generally using the mortgage lever. Renewable Energy Sources, in addition to the loan, plus making use of the global trend in controlling CO2 emissions means that the bark of the gold has become a component of the current monetary system which supports the construction of renewable energy sources and penalizes for greenhouse gas emissions. If our investment portfolio is still small enough not to afford professional wealth management services, these activities and updating knowledge on investment has become one of the most important elements of life of every family, especially entrepreneurs. A lack of action in this area threatens not only lowering the standard of living and a steadily emerging crises, but also a financial disaster in retirement.
Small special purpose vehicles established for the purchase or construction, real estate, or the wind power plant are beginning to enjoy increasing popularity. Returns from such investments are doubledigit, which is higher than most of the assets available in the market can offer, and the level of security is very high, because of the legal structure. Inflation does not affect the return achieved on investment, because as prices rise, these businesses will automatically bring higher profits.
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