Your 401k is one method of saving money, but there are others. As a company, our primary goal is to empower our readers toward a better future. We do that, not only through our 401k trendfollowing newsletter, but also through educational content. For most people, from our abundance, we want to do two things… Invest and help others. A quick peek, with eyes open, and you’ll see so many are struggling. You will not be able to help anyone if you don’t first help yourself.
Today’s topic is a sub-topic of economics, which is the science of production, consumption, and distribution of resources. You’ll find in later posts how simple rules of economics, such as supply and demand can be applied to investing in a way that you might not have previously considered.
One of the first lessons that a student of micro-economics would learn, is that consumers have insatiable wants. You may, from time-to-time meet the perfect counter-cultural minimalist who has learned to fight this instinct, at least from the material perspective. For the majority however, our wants are endless. King Solomon, the wisest and wealthiest man who ever lived had this to say:
“The eye never has enough of seeing, nor the ear its fill of hearing…”
Eccl 1:8
Apparently, this also gives credence to the idea that human behavior, at its base level, does not change. At least not in the last 3000 years. This is of course, why our newsletter trading system works. Trends typically begin and end in a similar fashion… not because of the consistency of the economy but because of the consistency of the market participants- people.
Recognition, the First Step to Save Money
For knowledge to become wisdom, there must be application. It’s not enough for us to “know” that consumers have insatiable wants. The important point is to recognize that YOU are a consumer and YOU have precisely the same dilemma.
“When the division of labour has been once thoroughly established, it is but a very small part of man’s wants which the produce of his own labour can supply. He supplies the far greater part of them by exchanging that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he has occasion for. Every man thus lives by exchanging…” Adam Smith, The Wealth of Nations
Resources, specifically, your financial resources are limited. Knowing that resources are limited and that you have insatiable wants, it’s logical to recognize that even seemingly small financial decisions become increasingly important. Maybe you’re not convinced that your wants are truly insatiable? Did you hear about the new Jason Bourne Movie that’s going to be released this week?
Oh also, there’s a great new restaurant in the town where I live called Tonno. Take a peak at the menu for a moment. See what I mean?
Our next post will look at the expense side of your personal balance sheet to see if we can help find some extra money at the end of your month. Do you use a budget, or do you operate by habits?