Prosperity Is more than having money

The record levels of financial aid, over the last 30 years, to reduce poverty in the poorest nations of Africa has failed. The message is simple: Money as the lone transformative power for lasting national prosperity is not enough. A country needs more than just wealth to be prosperous. It needs to endow its citizens with basic human freedoms, that come from a safe water supply, a roof over their heads and the ability to hold politicians to account for these and other essentials of life. It needs to educate its children and take care of its elderly. It needs to develop a society in which people trust one another. It needs to foster a climate of entrepreneurship and innovation. None of these are achievable without the rule of law and strong, democratic governments. 

• If you ask the average person what she believes is the definition of prosperity, the typical response would be monetary wealth. True prosperity encompasses abundance of wealth, happiness, health, career, relationships, home & family and wisdom. Money has little utility after certain level.
• Wealth alone does not make for a happy and successful society. 
• Happy citizens are produced as much by democracy, freedom, and entrepreneurial opportunity as they are by a growing economy.
• Looking at one's bank balance, we may discover whether the man is rich or poor but we learn nothing about his character, his enjoyment of life, the state of his health, the quality of his education or his attitude toward the people around him.
• GDP is a measure from an age dominated by heavy industry, designed to calculate a nation’s economic production. It has evolved to become the key device used to weigh a country’s economic success, tweak taxes and tackle inflation. The measure works less well with the growing importance of services.
• Finland’s GDP per capita have decreased sharply, but its real wealth, in terms of its citizens living in a free, safe and successful nation, has improved.
• The findings of the 2010 Prosperity Index are: smaller northern European countries rank highest while the bottom two places are occupied by Zimbabwe and Pakistan. The U.K. ranks 13th (same as last year) while the U.S. ranks 10th. 
• Progress and prosperity is as much about well being and contentment as economic success. 
• The critical factors fueling prosperity are open markets, high personal freedom and strong civil society. But given the fragility of such ideas, fury against globalization and rising mood of ugly intolerance, it is always good to restate these important points.
• Nations at the bottom are improving faster than those at the top - but there are important exceptions.
• Plenty of countries, from China to Chile, have shown convergence towards the United States, the world’s biggest economy.
• Britons come third for generating prosperity, despite sluggish growth due to structural reforms but the ratings down to tenth due to their failure to share wealth. This is seen helping open divisions in societies to alarming degree. 
• Oil is exposed as a curse for developing countries, corroding democracy while fueling corruption and rent-seeking activities.
• New Zealand is picked as the planet’s most prosperous place, edging out Norway and Finland. This isolated nation is reliant on agriculture for its economy and its exports – a sector that thrived after government started to ditch subsidies in 1984. Farmers screamed this would be driving them in droves from the land. Instead they were forced to cut costs, innovate and respond to demands from consumers rather than bureaucrats. Now, they are some of the world’s most efficient and inventive producers.

Before national leaders can create effective policy to increase economic growth and social well-being in their country, they must first answer two fundamental questions: What is prosperity, and how is it achieved? 

Gross Domestic Product is an incomplete way of measuring 

a country’s progress, GDP captured  everything except that 

which makes life worthwhile ... Robert F. Kennedy.

Financial freedom for fortitude

You should be grateful, if you were fortunate to start out in families that instilled integrity, prudence, and hard work. If not, then it's still within your power to cultivate those qualities now. That will create conditions for your own financial success and also benefit everyone around you. The personal and financial decisions that will pay off in the long run require sacrificing a little today. Patience helps you live with the reality that true rewards usually require some short-term discomfort.

Your choice of career is one of the most important decisions you'll ever make. You need to love your work if you want to be great and prosper from it. Competence in technology is a first-class ticket to building wealth. Look for mentors and other professional relationships that complement your skills and personality. Be open to wisdom when it's offered. 

It is difficult to define financial freedom as it differs from person to person. Financial freedom is more about your attitude towards money rather than about the amount of money you have. It is also about being debt free and having sufficient money to lead comfortable life. It is like having income flow is higher than expenses and with sufficient reserves to back you up in case of any eventuality.

Money provides a sense of security only. Money is only a means not an end. Money as an end will lead to unethical practices. Unless you live on less than you make, it won't put you any closer to financial freedom. If you develop expensive tastes in houses, cars etc, and need to look as affluent as your neighbors & peers, you could wind up worse off financially, no matter how much you make. You can start by simply tracking your expenses, saving and budgeting. Identify the few areas where money spent truly pays off in better quality of life for your core interests. Spend there, and cut back everywhere else. 

Find a mentor to help you become a confident investor. Start small and carefully, but do start. Abide by bedrock investing principles: diversification, patience, simplicity, low expenses. Buy mutual funds or exchange-traded funds (ETFs), rather than individual stocks. Investing individual securities requires time and expertise to choose and then monitoring. Don’t hold investments you don’t understand. Choose a bond allocation between 20%-80%. If you’re 40, you’d have 40% in bonds; if you’re 60, you’d have 60% in bonds. Hold as few positions, in as few accounts, as possible. The general rule is that no more than 20 percent of total investment in company stocks. Track your net worth and your overall portfolio return each year, so you know what direction you're going, and why. 

Once your career and finances are on track, you can explore more entrepreneurial paths for wealth building by owning a small business or real estate. These can leverage your time and money, getting you to financial independence years earlier. They can be fun and rewarding too! With financial freedom you will be able to concentrate on creative pursuits. 

Some tips for Financial Freedom:

• Develop a positive attitude towards money.
• Minimize spending and maximize savings.
• Generate multiple sources of income.
• Don’t save until you clear your debts.
• Go for cost cutting wherever it is possible. 
• Buy in cash not on credit, as credit purchases dent your reserves.
• Be good at accounting and budgeting. 
• Work hard and work smart as well. 
• Make sure that your money rotates and make money. 
• Diversify the risk. 

Make sure to take life one day at a time. The goal is financial independence but don't obsess on it. Don’t sacrifice the present for the future; it won’t turn out as planned anyway. Make time for your loved ones and meaningful activities. As great as it is to achieve financial freedom and retire early, you don't want to arrive there having missed out on life along the way. Financial freedom is fortitude!

“Lack of money is the root of all evil.” - George Bernard Shaw

“Earn all you can, save all you can, give all you can.” - Charles Wesley

“Money isn't everything, but it's a long way ahead of 

what comes next.” - Edmund Stockdale