Wednesday, January 18, 2012

Real Wealth: A Reminder

Here's an excerpt from a recent interview with David Morgan of the silver-investor.com. David is one of the world's pre-eminent silver gurus and understands the market very well.

Often we can get caught up in the paper money prices of gold and silver and forget why we swapped our paper for physical in the first place. David's excerpt below reminds us of why we made that decision.

"It's not a number (price) I think people should focus on. People love to know what number, how high and all that, because that's how everyone thinks.

You know, my net worth is how many dollars do I own. But really you got to get out of that paradigm because in a depreciating currency, to think of how much you have in dollars is really not thinking very clearly. Because which dollar are you talking about? The 1913 dollar, the dollar the day you were born or the dollar of today, because it is a variable, it is not a constant.

Whereas an ounce of silver and an ounce of gold is a constant. What you need to think about is how many ounces of silver or gold have I accummulated over the years. Is it higher or a larger amount than I had a year ago or two years ago.

If you think of that shift, that paradigm where you are looking at your real wealth, not just paper derivatives, I think you actually come to the conclusion that it is not that bigger deal to focus on the price.

It is more important to focus on the amount of value, how much purchasing power do I have, how much wealth have I accummulated. How much savings do I have.

Gold in New Zealand dollars: $2066.62 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $37.52 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
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1 comment:

  1. I like this. I think that's a good way to think about one's wealth.

    ReplyDelete