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While building your wealth you must also ensure you protect the value of your wealth and understand what tangible assets are. Keep in mind, money, which is a fiat currency is only a means of efficiently exchanging our time worked for the items we wish to purchase. Money by itself truly has no value, it is after all only a combination of cotton and linen fibers. It is for this reason it is an unsafe storage of wealth. Especially now days with inflation increasing faster and our government, in combination with the Federal Reserve are busy on the printing press saturating the world with US dollars and quickly deteriorating its purchasing power. So it’s important not to keep your wealth in only cash for the long term, as it will lose value over time. Cash is great for emergency funds and for quickly taking advantage of opportunities. However for longer term wealth management, tangible assets such as precious metals, real estate and re-investing it into your business or other investments and utilizing the power of interest and compounding of your funds are better at maintaining and growing your wealth.

Just as important is to legally protect your wealth by ensuring your using the correct wealth protecting vehicles such as 529 plans, 401k’s, Roth IRA’s, Insurance policies, Incorporating to protect your business and your own personal assets, and seeking financial professionals to assist you in Estates planning and financial matters, especially as soon as your new business becomes profitable.

So the question may arise. How will I know if I am managing my wealth appropriately? All true wealth stems from the FACTORS OF PRODUCTION. Some factors of production include Land, Labor, Technology, Capital, Intellectual Capital and to some extent raw and scarce natural resources. These are the main ingredients that produce wealth. Those who can control some or all of these resources will have the ability to produce wealth. An entrepreneur or successful business owner has combined the factors of production with Innovation and a business system to make themselves wealthy.

Capital can be considered the fuel for your business system that can invest in technology to make the system more efficient, purchase labor to participate in your business system or for purchasing land to operate your business, purchase capital equipment and the like. If you do not have a business system the capital should be converted to a tangible asset that will appreciate in value or at very least maintain its value in an economy until it is ready to be converted back into capital for use in your business system.

Raw natural resources that are scarce and in high demand in a wide variety of industries will always maintain or increase in value over time, eg. oil, gold, silver, steel, copper, wheat, aluminum and much more. Something to consider with certain resources such as precious metals have a duel use. Some metals are used for jewelry and industrial use, as well as investments. Using gold as an example, when the value of the dollar goes down, and there is uncertainty in the economy investors seek shelter in a stable investment such as gold, thus driving up demand and price for gold. At the same time investors are driving the price up, it is simultaneously making it less affordable for those seeking to use it for industrial purposes and jewelry and the like. So this drives demand back down since industries will wait for the price to go down to purchase it for retail purposes. So it creates a relentless cycle. However with India and China industrializing so fast this is going to create a healthy demand for raw resources for the foreseeable future.

Land and Real Estate is also a beneficial and stable storage of value, it is extremely flexible and tangible asset. Some of the benefits of land and real estate include favorable tax laws, fair and respectable legal support. It can be developed and real estate can be increased in value and or equity, and can be used in various different ways. Lately the instability in derivatives and credit markets, high risk irresponsible home loan practices have caused instability. Additionally, the current inflation rates and uncertainty in the real estate and credit markets have also added to the decline in home prices. There should be a good entry point into the real estate market being currently it is a buyers market, moreover the prices should stabilize in time.

People will always require a place to live and there will never be any more land than there is today. Of course some land is worth more than land in other locations, and the real estate both commercial and residential will always be dependent on population size and the amount of property on the market so it does fall into the same supply and demand laws that prevail in a capitalistic society. However the flexibility and relatively stable storage of value make it an attractive option.

Using good financial vehicles that take advantage of compounding, interest and appreciation are also a great way to grow wealth, however today with so many dollars chasing relatively few investments and globalization has made it difficult to store wealth in typical stocks, funds and bonds. Not to say good investments aren’t out there, however it is becoming more and more difficult and more and more risky to invest in these types of assets.

This is not financial advice, only a recommendation. The future growth in this globalized economy will go where there is the most Factors of Production not in use. That is to say their economies are not as efficient at converting the Factors of Production into wealth as the more developed nations such as the US, Canada and other westernized economies that are already making use of all available factors of production. As a result there is untapped potential in these under developed countries. These are the ideal places to look for impressive growth in the future as all the ingredients are there to produce great wealth, these are ideal places to invest to take part in this growth.

This in essence is what Entrepreneurs do, we seek untapped and new ways to utilize factors of production to provide value to society and make a profit. Of course being most under developed countries lack legal support and proper government regulation in some locations may add additional risks for foreign investors. However there is always opportunities somewhere in the world, common sense and not being blinded by greed will help discover some of these hidden spots. As the Oracle of Omaha Warren Buffet, who may very well be the greatest investor in our era always stressed, do what you know. Invest in those things you understand and this will also keep you from gambling away your hard earned wealth.

Most successful business owners will reinvest excess capital into their own business rather than investing in unknown business around the world through stocks. However it is another option. Taking on bonds or the debts of other individuals, governments , municipalities or corporations or providing financing to them for a certain interest rate is also another form of investing. Of course each have their own risk vs reward, typically the more risk of default or the longer they will use your capital the more interest you can command. This is yet another way to grow wealth, but of course not without risk. As they say, “Nothing Ventured, Nothing Gained”. These by all means are no complete list of viable investments, only some of the more traditional and proven methods of storing wealth.