Saving is a key concept for those who would like to become financially independent or retire early.
Saving efforts put discipline to spending, increase conscious buying behaviour and obviously generate income and a stash for future enjoyment.
Normally all the above should hold true.
Unfortunately we do not live in normal times. We live in times of great financial unrest throughout the western world.
And this unrest imposes large threats to your saving accounts.
Debt levels in the western world do not look promising…
Let’s get a step back and see what is at the core of the financial crisis that is haunting us for 4 years now:
Economic Theory often tells a bunch of crap about how people do or should behave.
However, there are also a lot quite useful concepts in economics.
One of them is the Concept of Diversification, stemming from financial economics, and basically saying that you should not put all your eggs in one basket.
By betting on a single stock for example, your returns are obviously great should that stock rise but this chance is paid by much too much risk of loosing all, so it is advisable to diversify among different investment opportunities.
Better not run your life aground to often…(seen in Brittany, France)
The same holds true for life in general: