Everything in life has a cause and effect relationship, including the overall markets and economy.
Kiosaki breaks down an interesting concept of patterns and cycles by Scottish historian Alexander Tytler.
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Source: Robert Kiosaki
Alexander Tytler (1747-1813) was a Scottish-born English lawyer and historian. Reportedly, Tytler was critical of democracies, pointing to the history of democracies such as Athens and its flaws, cycles, and ultimate failures. Although the authenticity of his following quote is often disputed, the words have eerie relevance today:
A democracy is always temporary in nature; it simply cannot exist as a permanent form of government.
A democracy will continue to exist up until the time voters discover they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by dictatorship.
The average age of the world's greatest civilizations from the beginning of history has been about 200 years. During those 200 years, these nations always progressed through the following sequence:
• From bondage to spiritual faith;
• From spiritual faith to great courage;
• From courage to liberty;
• From liberty to abundance;
• From abundance to complacency;
• From complacency to apathy;
• From apathy to dependence;
• From dependence back to bondage.
Tytler's Cycle and the U.S.
In looking at American history, we can see Tytler's sequence in action. In 1620, the Pilgrims sailed to America to escape the religious bondage imposed by the Church of England. Their spiritual faith carried them to the new world.
Because of their deep faith, the Pilgrims left England in spite of the high percentage of deaths incurred by earlier American settlements. For example, when Jamestown, Virginia, was founded in 1607, 70 of the 108 settlers died in the first year. The following winter only 60 of 500 new settlers lived. Between 1619 and 1622, the Virginia Company sent 3,600 more settlers to the colony, and over those three years 3,000 would die.
In 1776, the Declaration of Independence was signed. From spiritual faith the new Americans were garnering great courage. By crafting the Declaration of Independence, the colonists knew they were essentially declaring war on the most powerful country in the world -- England.
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Here's another interesting article filled with awareness and perceptions about the psychology of money and happiness....
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Laura Rowley Money & Happiness
Why the Rich Don't Feel Rich
by Laura Rowley
I am fascinated by the Todd Henderson controversy. As you may have read by now, Henderson is the University of Chicago law professor who blogged that he is not rich, even though he earns more than $250,000 a year with his physician wife. That puts their household in roughly the top 3 percent of earners in the U.S., and is four times the median income.
The Bush administration tax cuts enacted a decade ago are close to expiring, and the Obama administration wants to keep most of the cuts in place -- but only for households making less than $250,000 a year.
That's what Henderson was blogging about when he wrote: "A quick look at our family budget, which I will happily share with the White House, will show (President Obama) that, like many Americans, we are just getting by despite seeming to be rich. We aren't." (His post can be seen here, where Henderson also offers his response to the controversy.)
The blogosphere went ballistic about Henderson's post. New York Times columnist Paul Krugman called Henderson the "whining Chicago professor" and The Wall Street Journal wrote a snappy piece on how Henderson might reduce his overhead. (Henderson came up in a discussion about money and happiness that I participated in with Swarthmore professor Barry Schwartz on Minnesota NPR's "Midmorning" program last week.)
The brouhaha is ripe with psychological lessons. First, Henderson is a classic example of the hedonic treadmill at work. First articulated by psychologists in the late 1960s, the hedonic treadmill speaks to the phenomenon of human adaptation. We buy something new, we're thrilled with it, then we get used to it, then we want something bigger and better and we're unhappy when we don't get it (or, in Henderson's case, we end up feeling "poor.")
SOURCE: Yahoo Finance
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So there you have it.... two contrasting views about money, the economy, and how everything to do with making millions (or not) is in your head, and even if you make millions it doesn't mean you're gonna be happy.
Seriously.... it's really not that complicated..
Doug Allen
