Actuarial Wealth Management Research
Our focus areas are: Monetary economics; Financial equity research; Financial sustainability research; Investment performance measurement & attribution; and Subjective value analysis.
Our ultimate goal is to improve human coordination. To address this issue, we aim to help people improve their financial awareness by developing understanding of key concepts such as indirect exchange, money, bid/asked prices, subjective value, marketability, income and wealth.
In a civilised society the quality of the medium of exchange is a core driver of human coordination over time and space. We aim to help people understand that the commonalty is best served by a high quality medium of exchange supported with common law.
Many people recognise that there is currently a problem with the quality of society's human coordination. It is evident through high debt levels, near zero interest rates, declining housing affordability, the ‘GFC’, a domineering finance sector, wild swings in commodity prices, unsustainable ‘welfare’ payments etc.
The present good of the highest quality for indirect exchange is the most marketable good. When the most marketable good is used for indirect exchange it promotes coherent human coordination. The corollary is that a poor quality medium of exchange gives rise to problems with the quality of human coordination. Currently, our society operates under a variety of poor quality mediums of exchange. They are typically State based ‘numbers’ comprised of irredeemable central bank notes, backed by government bonds payable in those same central bank notes.
Given the deterioration in human coordination over time and space it is a reasonable conclusion that society’s capital wealth (i.e. our commonweal) is today in a poor state. It is likely that the difficulty in undertaking a reliable exchange of income to wealth over time and space has led to a significant misallocation of capital. Symptoms of this poor quality exchange include a lack of long-term manufacturing capital formation, excessive housing stock and capital depletion through too high a level of short-term consumption.
Our mission is to help people understand how the exchange of income to wealth in a person's productive years can then provide for the exchange of wealth to income when that person is aged and can no longer work.
Our vision is that people will utilise the fundamental principles of wealth accumulation and then wealth decumulation in an equitable and sustainable manner.
We do not provide financial product advice of any sort. If you want financial product advice, you will need to contract with an alternative service provider. Wealth and Income 4U does not hold an Australian financial services licence.
If you are willing to share your journey with us, we will do our best to help improve your financial awareness.
"They sang these words most musically, and as I longed to hear them further I made signs by frowning to my men that they should set me free; but they quickened their stroke, and Eurylochus and Perimedes bound me with still stronger bonds till we had got out of hearing of the Sirens' voices. Then my men took the wax from their ears and unbound me.” The Odyssey, Homer
Income is conceived as a steady flow of goods and services. A person in their active prime years needs to put aside income in the form of wealth so that they are able to have a comfortable retirement by then converting that accumulated wealth into income. If a person has wealth in retirement they will be in a strong position. It allows them to live in comfort and safety.
"By its very nature, income is perishable. If not used presently, its value may evaporate. Therefore the economizing individual divides his gross income into two components: income-to-be-consumed and income-to-be-saved. He converts the latter into wealth which he plans to convert again into income later, as the need arises. There are problems with these conversions. The value of income and wealth must be secure. The risk of letting the quality and quantity of goods and services that make up the income erode must be reduced to its irreducible minimum". Professor Antal Fekete
Most people measure wealth in terms of government currencies, such as the Australian dollar, US dollar, euro, yen, Swiss franc, yuan etc. This approach of measuring wealth is wrong. Using government currencies to measure wealth is a relic of the past from when banknotes were redeemable into gold coin.
Providers of services in the savings industry help people convert income into wealth (save), then and help those people convert the accumulated wealth into income (dis-save). By wealth it is meant any desirable piece of property, inclusive of equity capital, held for an extended period of time. Wealth is unsuited for direct consumption. Before consumption, wealth needs to be exchanged for income.