Sep 012013
 

The underlying myth of the current world economy is that of scarcity. In a zero-sum game, whatever I win needs to come from someone else. Thus, the overriding behaviour to gather and protect ‘what’s mine’ at all costs.

This scarcity mentality extends to other fear-driven sectors. For example – insurance. While some insurance may just be prudent risk management, on the whole, it’s an industry driven by the fear of loss.

Retirement planning is another sector heavily fear-laden. The fear of ‘Will there be enough’ has spawned an entire industry of scare-mongers, preying on that feeling, throwing huge numbers in front of society. The effect is probably twofold: some earnestly and fearfully try and put more away while others, fearing the inevitability and unavoidability of poverty, throw all caution to the wind and just spend it up today.

Assuming the future is exactly the same as the past, I guess you could then, with certainty, put a plan in place, follow it and be certain you will have enough to live out the rest of your days. Anyone notice the faulty assumption there?

Bottom line, no one know exactly what tomorrow will look like. Charles Eisenstein in “The Ascent of Humanity” believes that the current world system is unsustainable and due for total meltdown. In the last decade we’ve had the ‘dotcom bubble’, the financial and housing market crash and an unprecedented rise in the cost of living. He may just be right…!?

Anyway, over-planning for the future at the risk of not living today is short-sighted and just plain stupid. Also, I don’t believe that saving for the future and personal finance fits into a ‘one-size-for-all’ mould. It is ‘personal’ finance after all. The choices you make, the habits you form, the savings vehicles you choose – none may make purely financial sense when analysed on the numbers alone. But, if they don’t resonate with me as an individual then they also don’t hold much appeal.

So, the Peninsular rental, from a pure ‘investment’ perspective is probably not one that may offer the best financial returns in the long run. But that’s not the point. The expected lifestyle and enjoyment returns are never factored into the paper sums and that’s more of what drives us than pure dollars!!

And …. physical land may just be a little more resilient to a financial “bubble-burst-event” than stock-market shares or money in the bank.

 

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