So Much going on.

Kia Ora,

Sorry being getting off subject of financial education with so much going on. Such as those controlling money in the US over last few days it has leaked that they have being discussing putting restrictions that will impact the low risk mutual funds. In essence they are looking at stopping people taking their money out of mutual funds if things get worse & people look to move their cash.

This is commonly known as a run if everyone does it at once. What Britain had to avert with Northern Rock & Sir Richard Branson tried to step in & help save the situation.

Question you have to ask is. Why are they considering putting this in place if the economy is in recovery? They know when these things hit they hit fast & all at once.

The US did this during the last depression with Government Bonds as people sort to redeem them, they decided they didn't have to hounour them anymore.

So back to education & start with the basics.

Best definition I have found come from Rich Dad series, so will start there.

First an asset. It is something that puts money(cash flow) into your pocket. Investment property, shares (in some cases), business,

Liability takes it out. Therefore even your own free hold house is usually a liability as you end up paying rates (NZ) or land tax, insurance, water charges (in most places) & electricity or gas, but no money flows in.

Then we have to consider the asset classes. In reality there are only four. I have seen recently so called financial experts outlining 11 to 17 classes but 8 to 14 of those were actually one class or derivitaves of that one class of asset.

The classes are Businesses(a business is where you work on, not have to work in it). Real Estate, Commodities (gold, silver,oil,water,food stuffs) & Paper (Shares/stocks, options, futures, ETF's etc).

Things though are getting very interesting in the world of finance. Someone was quoting Dickens the other day when referring to 2010. "It was the worst of times, it was the best of times". In other words get yourself educated to make most of the opportunities.