“Money is better than poverty, if only for financial reasons.” Woody Allen
What is money for? Money has no value of its own. Money is only valuable when it is working. It is not valuable stored in a bank or in a box except to be used for as yet undiscovered opportunities or to cushion adverse events. Maybe you feel better having it, but the money is sterile.
Stored money can buy choices for you and those you wish to benefit. Beyond that it is not much good. It only has value when it is in motion.
Similarly having money that earns investment income that you don’t need is not wise. Invest => earn income => pay taxes => reinvest, is a fool’s game unless you know the end purpose for the capital. Only the government gets useful money out of this cycle.
Choose wisely. There are strategically and tactically effective ways to make your money more valuable in use.
More to come next week on how to manage estate values that will pass to children.
Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario. email@example.com