The motivation for this article is to teach people how to save correctly, because the people of the USA used to be the richest and the most free nation in the world and now it has become a nation of debtors and wage slaves.

The first thing that you need to understand about investing is that you are operating in a system that is completely stacked against you and none in the media is going to tell you this. The average american however has realized that subconsciously and that’s why people hardly save money anymore and that is why we have become a nation of debtors.

The first massive way in which the system is stacked against you is that we have a central bank. This central bank is not set up to help the little guy, but instead it is intended to take money from the average saver and transfer it to the banking industry and the way in which it does it is very subtle. Basically under central banking system you will never gain in the long term by holding any type of interest bearing certificate. This is because if the banks paid ot more in interest payments than they took in by inflating and skimming the currency then they would be losing money, so no investor who hold interest bearing certificates in the long term can ever succeed under a central banking system. This of course does not mean that you cannot succeed as a speculator who jumps in and out of the bond market at the right time.

The next way in which the system is stacked against you also has to do with the central banking system. As the currency inflates every year the government taxes you on the imaginary inflated value. So even if you are holding something that isn’t really gaining value and is only getting value on paper and you are taxed on that isn’t really fair as the government is confiscating a percentage every year. This is one reason why anyone saves any money anymore.

The central banking system is a great benefit for the government and to the banking industry but it is a great detriment to the average person who is trying to save money. The main reason why people fail to save money is that we have a central bank and a constantly inflating currency. This is why almost everyone has given up on saving and has instead gone into debt and has been forced into wage slavery. Once people realize they cannot succeed by investing in interest bearing certificates they are usually told to go invest in the stock market. Of course corporate America and the financial industry are constantly putting out stories what a good idea it is to invest in the stock market and how the value of the stock market is constantly going up. These are totally misleading stories. The real truth, that nobody in corporate America is going to tell you, is that every company eventually goes bankrupt. Yes, some people do make money speculating in the stock market, but most of them will lose in the end because all stocks eventually end up worthless. Now if you are a genious and a speculator and you have a lot of time to devote to it, then maybe you can succeed. Very few people do. I don’t even try because in a system which works against you even beyond the normal inflation and the normal taxation on inflated value it is just one more variable working against you.

Now before everybody gets too depressed about all of this, let me just say that once you understand how the system works you are free from future exploitation. And at that point you have two choices. One is just to try and save money and the other is to actually try to make gains and earn a living or earn a partial living as a speculator.

So first let me talk about earning partial living as a speculator as this is what everybody is trying to do. I think that very few people will succeed at this and I have said that a number of times. Let’s use me as an example. As I said before I can systematically earn about 20% of return. Now once you take out true inflation which I believe now is about 10% these days and then you take out taxes that leaves me a true rate of return of about four percent. If I am speculating with let’s say half a million dollars, I will earn 20 thousand dollars per year and this is my true value gained. So, I am sorry to be the bearer of bad news, because I know that everybody likes to imagine that they can earn lots of free money by speculating or gambling on the markets, but even if you are unusually successful and even if you have an unusually large amount of money to speculate with, it is hardly worth the trouble.

The good news though is that it is much easier to save money than to profit or break even as a speculator. Not many americans do succeed in saving money but once you know what you are doing it is not that difficult. You basically save money by owning something of value. And if you own something like land or real estate or precios metals you can usually find some legal method of protecting the inflated value from taxation, whereas when you speculate you will probably get stuck paying taxes.

So my recommendation to the average american is to save money by investing in something that has value. That is what humans have been doing for thousands of years and that is what is proven to work. Stocks always go broke and paper currencies always end up worthless but things like precious metals and real estate generally retain their value. It is just not that complicated. I know a lot of people that worry that the price of real estate and precious metals constantly fluctuates – yes the price of everything is fluctuating in inflating currencies in particular.

The point however is that if you own something that has true value it is never going to fluctuate down to zero, whereas the paper currency and stocks will eventually fluctuate down to zero. So by owning something of value you are on a leveled playing field. When you invest in stocks and interest bearing certificates you are not – you are in a system that is working constantly against you. It is very hard to overcome that.

So sure housing is in a bubble right now, so don’t invest in it, invest in something else. You are speculating, but at least you are speculating in a system where not all is against you and with things that actually have value. If you do not want to speculate, just buy anything of value – buy a house – it might go down in value a lot, but it will not go down in value to zero like your stock might. Once you learn to save and retain value and protect your savings from confiscation by taxation on the inflated value. And then you won’t have to go to debt for anything, you are no longer slave to your mortgage and therefore a slave to your job. You can then really appreciate the freedom our ancestor just took for granted.

Wish you all success!