Challenge no. 1: Currencies lose their real value over time.

Most people do not appreciate how much wealth is lost in currency over the years.

Had you taken $10,000 in 1960 and kept it in a safe through to 2015, you would still have the same $10,000 but at the same time lost a huge part of your money.

How can that be, you ask?

Well, it has to do with what’s called purchasing power.

Currency is only a medium to purchase items or labor and that medium is controlled and manipulated by various governments’ agencies.

These agencies choose a course of action that results in a slow rate of attrition in the purchasing power of the currency itself.

As a result, Currency’s purchasing power is under slow attack, almost too slow to notice.

So, the 60’s $10,000 is still worth $10,000.

But the question is how much that 60’s $10,000 is worth in 2015 in terms of purchasing power? The answer is: $1,250.

This means that keeping the money safe turned out to be a net loss of 87.5% of the initial investment.

To win the war of wealth accumulation know your enemy:

Money loses its purchasing power each and every day.

Find out whether or not your wealth grows in real terms above and beyond the rate in which currency loses its value.

Challenge no. 2: You are on your very own.

Some people suppose some of their future money needs are going to be taken care of by the state, the government, the Firm, or some other faceless setup or government arrangement.

This perceived arrangement seems to reduce the scope of wealth an individual might need to amass on his own.

This Assumption is False, certainly more so as we move into the future.

This is because in most of the developed world, certainly in the US and Europe, Social Security schemes are running out of funds.

The reason for this has to do with the way these entitlement programs were planned. In the past, about 3.3 employees used to contribute funds for each beneficiary using social security.

This dependency ratio has been in decline. And in 2012, it reached 2.9 and is still dropping while the cost of treatment is only growing.

This trend is similar to most plans across most of the developed world.

The result is financially unbalanced systems requiring ever-growing resources to sustain.

The logical solution is either radical deflations of costs such as healthcare, radical increase of population or radical cuts in entitlements – or some combination of these measures.

The Current state cannot last.

To win the war of wealth accumulation know your enemy:

Do not plan on having any of the current entitlement systems operational by the time you will need them.

Make sure you amass enough wealth to cover all of your needs in the future independently.

Challenge no. 3: It’s going to last longer than what you think or plan for.

Most people do not realize a full-scale medical revolution is upon us.

In laboratories, in Universities, in leading hospitals, and in FDA approved Clinical trials, multitudes of new technologies are being tested to change medicine as we know it today.

As a result, life is going to span longer, this revolution is going to destabilize and disrupt many critical economic models built on the assumption that humans don’t live past 80 such as entitlement programs, Life insurance, disability insurance, and so on.

In effect, as lifespans and good health increase, people, especially those in the transition period, are at serious risk of running out of funds.

To win the war of wealth accumulation know your enemy:

You are going to live a longer happier life, much longer than your grandad.

You will need way more wealth to finance yourself through these extra years. Invest accordingly.

To overcome these challenges, one must understand and apply the 2 basic rules of wealth generation.