What will gasoline, airline tickets, bread, green fees, a weekend at the coast, prescriptions, or anything else cost us in 5, 10 or 20 years?
Personal Economic Strategies addresses several of the fundamental problems consumers face as they approach dealing with their futures. One of the biggest issues lies with the difficulty most people have in measuring the quality and effectiveness of the advice being given.
We employ a personal macroeconomic modeling approach which is verifiable and quantifiable and can assist you in selecting a course which could be suitable for you. Our process is very different from the traditional approach. The traditional approach to solving the problem is very linear. Usually it is basic arithmetic where we have the number of years we will work with (TIME), an amount of money we can save or that we have already accumulated (MONEY), and we impute a certain rate of return on our investments (RETURN%) and we multiply AxBxC and hope to arrive at the hypothetical number we assumed we would need.
The traditional linear approach is built around accumulation theory. It is the idea that we will accumulate separate and discrete pots of money. The problem is that compound interest means compound taxes and an increasing drag on our ability to help grow wealth.
Another big flaw in the traditional linear approach is the focus on “Needs”. The problem is that when a goal or need is met, it usually changes. Remember Maslow and his hierarchy of needs? We don’t know what the world will look like in the future. We don’t know what things will cost us in the next few years. What will gasoline, airline tickets, bread, green fees, a weekend at the coast, prescriptions etc. cost us in 5, 10 or 20 years?
Since we cannot predict the future, we have to focus on increasing our financial potential. We have to get the most out of what we have without being limited by the arbitrary ceilings that needs or goals might impose upon us.
How do we do this? By bringing into play a macroeconomic modeling process. This process can help us provide a personalized road map that helps balance growth potential and the reduction of risk.
Focusing on the flow of money within your macroeconomic model allows us to try to tactically align and balance growth potential and risk reduction.
Money flow is essential for businesses, nations and individuals. Money flow can create diversification, it can allow for taxes to be reduced, it can create more benefits and it can allow for a higher degree of control by its user.
*Remember, investing always involves risk including the potential loss of principal.