Financial Safety Advice

Business cycles are relatively short wave growth and decay that affect the economy. This means that the trend of long-term growth of developed economies is not a smooth linear line. This trend of growth is accelerating moments and moments of slowdown in growth.These movements are called cycles and all economies go through these cycles. The danger faced by the investor at this stage is to invest in stocks at a time when the cycle is at its maximum and have the need to sell your investment when the cycle is at its floor, with the loss that this entails. To avoid this situation, as investors will have to learn to try to detect when they start and when they complete the cycle. Easy task, but that is the main objective of the economy.

But problems do not end here. As companies in their quest for growth through innovation and increased productivity are able to grow, but the process left in the way companies less innovative, less competitive, with products and services more expensive and of lowerquality that the winning company. The company, the winner, out of the market to the company losing. This process has the name of the process of creative destruction, the new company creates a new process or system and destroys another company. As investors, we will not only be analyzed when there are positive economic cycles, but also in this series the winners of this process of creative destruction.

The same can be applied to real estate investment. First, the cycles have much influence on the real estate cycle. That is, when the economic cycle is positive, the real estate cycle is very positive and vice versa. Therefore, it is vitally important to predict the cycles when it comes to predicting the real estate cycles. Second, the process of creative destruction also occurs in real estate investment. The most innovative and creative investors move to more rustic investors. Let’s see an example to better understand this point. Five years ago began construction in Buenos Aires buildings with what was called amenities, this meant buildings Read the rest of this entry →

80% of millionaires are people who have made themselves, only 20% of millionaires are people who are millionaires by inheritance, lottery or a lucky break in the stock market or other conditions which shows that the more people are rich that is done by their own efforts and not to get it all by chance, however there is a problem, since even just a popular saying is both a truth that “the first generation creates wealth, the second and the third administration spends “this because of different views about money can briefly explain what happens in most cases.

The first generation: Work hard, save, invest and diversify.

The second generation: usually saw their parents worked, saved, invested and diversified, it also helped their parents to get wealth.

The third generation: was not sacrificed as if they were grandparents and did not see it very closely so that they cause a big impact, and lived in wealth and may not have worked hard in the pursuit of goods and money ( or may not have worked at all) only saw the process of investing and diversifying not to earn money, save it and undertake the projects.

In other words without the wealth of financial education a family can begin to wane or permanently in the third generation.