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Funny Money

This is the second of the guest posts by John Logsdon from readysteadygowebsites.com.

Imagine the scene. You go to your bank because you want to paint your house which will cost £1000. The bank manager looks in the books, sees that you are a ‘good risk’ and checks the authorised lending level, which requires the bank to have 10% of its lending (it used to be 3%). The manager alters some numbers on the computer and hey presto, you have £1000 to spend.

You have the work done, pay the painter who puts his money in his bank and decides he needs a new van. He goes to the bank which also considers him a good risk, and bingo! he has £10,000 to spend on a new car. This he buys from the chap next door who is already quite rich, pays in the money and suggests he needs £100,000 for a new Porsche. The bank now has £10,000 so it can lend him the money and off he goes in his new wheels. And so on.

Coping with trouble: short term measures

As part of the Money Principle Ideas Generator competition I asked you, the reader, to share the three measures you will take immediately to ensure that you and yours survive serious economic trouble. As I said before, all responses were really fascinating. But the more I think about it, the more it seems to me that the measures that we take should be divided into ones that have short term effects, middle range effects and long term effects. I also did quite a bit of thinking about what I’ll do and have come up with some measures that I think may work for us. Today will share the things I would do/have already done for the short term.

On wealth: European and American style

Anyone who is reading this article thinking that I am going to teach you how to be rich – forget it! That is the domain of Ramit Sethi from I will Teach You to be Rich.  I hate treading on other peoples’ toes. Really! Apart from that I am likely to be teaching you how to be wealthy rather than how to be rich. What is this about then?

I am in America; in Atlanta to be precise! Attending a large conference organised by Georgia Tech which is very interesting on its own.

Who holds the strings? Transnational corporations are really in charge

Whenever I think about control, or simply put, about who holds the strings one of the following happens:

1)      Like many people, I immediately conjure up an image of a politician; usually one of the politicians who rule over countries considered powerful, like the President of the United States or the British Prime Minister.

2)      Like very few people I have this image of Satchmo sitting on a rainbow and hear his voice singing ‘…I have the World on a string…’

On ‘personal finance’, coffee bars and wasps

Lately a bit of discontent has been building up inside me. You see, when I started my financial transformation – and a bit later this blog to help me cope with obsession and keep me focused – I felt really excited. Every new book on personal finance, every new blog sparked connections, generated ideas and generally made me feel like ‘the cat that’s got the cream’. I was LEARNING!

Now, things have got into a bit of a routine. I find that more and more often I will read a book or a blog article and think: ‘Competent; well written (not always); but I have read this stuff many times before’. And a bit of boredom starts setting in. Because, I don’t feel I am learning.

The Money Principle financial health: who controls the flows of your money-river?

Now you have a vision of the island you would like your life to be and of the island that it is. Today I would like to take us through four further steps. These are:

a) Identifying what are the key features of the two islands (the one we are and the one we aspire to be) and how these are different;

b) Focusing on the resources that will move us from the island we are to the island we aspire to be;

c) Considering who controls the inflow of these resources; and

d) Thinking about the outflows.

The Money Principle financial health: money is a flowing river

Lately, I have been asking myself two questions. These are what makes us financially healthy and how do we know that we are financially healthy.  So, what is new, you may ask? Not much! This is another example that there isn’t much new under the sun; including in matters of money, managing money and relating to money.  This shouldn’t stop us asking the questions again, however.  I believe that by asking old questions again and again, we see new ways to approach them and enable change.  By now many of you know me well enough to expect me to question established beliefs, norms and conventions.

Money Principle wealth chat: wealth in the UK

 

A couple of days ago I, for my shame, realised that my knowledge about the wealth situation in the UK still leaves much to be desired. Acting on this is rather important for the Money Principle since it builds on the realisation that there is not much personal in ‘personal finance’.

So today I set out to educate myself. This is what I found.

According to a report of the Office for National Statistics, Wealth in Great Britain: main results from the wealth and assets survey 2006/2008 the average wealth picture by age group looked approximately like this: