Financial Sense University ~ Pay Yourself First by Anonymous Silver Investor 02/25/2005

PAY YOURSELF FIRST
by Anonymous Silver Investor
February 25, 2005

Many years ago when first starting out in business, I was given some advise which sadly I didn't really understand at the time and didn't always follow anyway.

�Pay yourself first.� I used to think this simply meant; draw a regular paycheck for yourself. What one did with the money afterward didn't really matter that much. Naturally a lot of money flowed through my fingers over the years. I gradually learned about saving and investing but today there is so much more to learn.

The basic concept of saving applies to all fields of human endeavor not just to small business owners. Whether one is an hourly or salaried worker, executive, farmer, small business owner, professional investor, speculator, or riverboat gambler, paying yourself first is one of the most important things to remember as we go through life.

Paying yourself first means taking a little off the table on a regular basis and putting it somewhere safe. The early farmers, settlers and pioneers knew this because they were living on the very edge of survival. They didn't eat their seed corn and didn't live beyond their means. I guess I've always identified a little bit with this spirit, I keep extra food around and live in the country as self sufficiently as time allows. As a society gets more secure with itself this concept is gradually lost, it’s not taught in school anymore and rarely passed along by family elders. No worries, we have that government safety net to fall back on if we mess up or things go bad.

For some, saving means investing in real estate, stocks, bonds, mutual funds and bank CDs. To others, saving for a rainy day simply means stashing some cash in the mattress. These methods of saving all worked in the past, each with their own up and down cycles and as long as you were diversified it made a lot of sense.

The world has undergone creeping, sinister and fundamental changes fairly recently, these developments have altered the concept of �saving� in a very dangerous way. You have probably guessed by now that the great evil of which I speak is un-backed Fiat Currency. Never before has the entire world been on a completely un-backed monetary system and rarely if ever has the world's reserve currency been so abused by its minders. This development brings some very real threats to your savings.

With practically every investment vehicle denominated and traded in these intrinsically worthless pieces of paper and computer ones and zeros, your savings have never been so at risk to dilution. In plain English, currency dilution is theft.
Practically every market or parking place for your money, in fact just about the entire global economy has been put at great risk by rampant speculation, which is an inevitable result of excess fiat money sloshing around in the system. Markets that go up like crazy can come down even faster when panic sets in because fear is a stronger emotion than greed. Unforeseen and unstoppable chain reactions can be put into motion at these times.

Today �saving� means only one thing to me. A portion of all my labors go directly into physical gold and silver, mankind�s timeless store of value. Regular withdrawals of profits from my investment accounts (no matter how safe I think they are) come home to find their way into Precious Metal. These days I pay myself in cold hard cash.