I have a new book due out in 2015 which discusses the 3 golden rules for multiplying your results from property, shares, business and life.
There are three key themes which run through the book which I've termed "golden rules". These three golden rules can be used to multiply your results - not only when investing in property or shares, but also in business and indeed, in all areas of your life.
- Golden Rule #1: The 80/20 Principle - most of your results will be derived from a handful or ‘vital few’ of your decisions and actions;
- Golden Rule #2: Snowballing your results - understanding and using compound growth to your advantage; and
- Golden Rule #3: The Pleasure-Pain Principle - what you link pleasure and pain to will determine the way you act and thus ultimately shape your results.
2014 Nearly Over!
Meanwhile the Beaconsfield Gold Mine in Tasmania suffered an earthquake and subsequent rockfall which resulted in a tragedy and an amazing escape for two of the miners, Brant Webb and Todd Russell. We later took the ferry over to Tasmania to visit the mine museum to hear their amazing story.
By 2009 the financial mood had soured following the fallout from the subprime crisis in the US and Prime Minister Rudd announced that he would offer a fiscal stimulus of cash payments to 13 million Aussies. Lots of televisions were bought that year!
Tragically the small cap mining outfit Sundance Resources (SDL) lost its entire board in a tragic plain crash in Africa.
Of course, these are only a few on the events that immediately spring to mind, and there was much more besides.
Like the rolling of a snowball from the top of a hill, where a constant rate of return is achieved on an investment portfolio, the gains grow larger and larger with each passing year or period of time.
Part 1 - Headcount
Over the past 10 years the population of Australia has increased by a massive 3.7 million or 18.4 percent.
The rate of growth got a bit faster, then a bit slower, then a bit faster again...but the direction remains clear enough and it will in the decade ahead too.
This of course creates huge opportunities for investors who can isolate demographic trends and spending patterns.
Part 2 - Labour
Later in that year doom and gloom forecasters predicted up to 20 percent unemployment as a result of the financial crisis, but in the event the rate peaked for the cycle with only a "5 handle".
We are now seeing relatively high levels of regional unemployment as the mining construction boom unwinds.
The unemployment rate in Greater Sydney already appears to have peaked for this cycle at a shade over 5 percent, but interest rates will likely still need to fall due to weaknesses elsewhere in the economy.
Part 3 - Pay
Part 6 - Share Markets
While this may be technically true, it is also disingenuous since it deliberately ignores the point of share ownership or stock market investment, that being the compounding income component (to be fair in some cases pundits also just don't know what they're talking about).
That's compounding in action.
It is ever thus. Where optimists see opportunity and abundance, pessimists see problems and risks.