By Central Bank News

By The Sizemore Letter

It’s not often that a stock with a $5 billion market cap soars by over 20% in a single trading day, but such is the case for Constellation Brands ($STZ), the largest publically-traded wine merchant, and now the sole distributor in the United States of Corona and Grupo Modelo’s other Mexican beer brands.

Constellation was the unexpected winner in the Anheuser-Busch InBev ($BUD) – Grupo Modelo merger, as Constellation was able to buy out Bud’s 50% share of the companies’ Crown Imports joint venture for $1.8 billion.  Under the new deal, Constellation will have complete control of the distribution, marketing and pricing for all of Modelo’s brands in the United States, while AB InBev will act as supplier.

The deal is a major coup for Constellation—kudos to management for pulling it off—but the company remains one of my least favorite stocks in the alcohol and vice sphere for a one critical reason:

Wine is much harder to brand than beer or spirits.  Think about it; when you go to a bar, you can instantly recognize your favorite beer or whiskey on tap or behind the bar.  Outside of, say, Coca-Cola ($KO), beer and spirits are probably the most recognizable and valuable brand names in existence.  Not surprisingly, premium beer and spirits businesses tend to enjoy high margins and high returns on equity relative to their peers.

Wine is a different story.  The attractiveness of a given vineyard varies from year to year, and few have national or international brand awareness.  Wine connoisseurs know their favorite vintages, but there is little brand loyalty at the mass-market level.  For a company of Constellation’s size, wine is a much harder business to operate.

This is not to say that I dislike Constellation or would never consider owning it.  “Sin Stocks” are some of my favorite long-term holdings due to their defensive nature and due to their tendency to pay high dividends (Constellation currently pays no dividend), and an argument can be made for making room for Constellation in a diversified vice portfolio.  But I would definitely give a higher weighting to premium spirits groups such as Diageo ($DEO), Jim Beam ($BEAM) and Brown-Forman ($BF-B).

One last thing to note: the Crown Imports deal allows Constellation to get a significant chunk of its revenues and profits from the premium beer segment rather than wine.  This is good news.  But it’s also a source of concern due to a certain provision in the deal.  AB InBev has a “call option” of sorts to buy the Modelo brands back in 10 years at 13 times earnings before interest and taxes.  This price does not at all appear unreasonable, but if exercised Constellation will find itself as purely a wine merchant again.

Disclosures: DEO and BEAM are held in Sizemore Capital accounts.

Related posts:

• Harley-Davidson Sputters and German Beer Goes Flat
• Trading Strategies: Playing Europe in the Near Term
• The Cult of Equity Is Dead. Long Live Equities.

Though the Heavens Fall, Let Them Be Strip Searched

By Robert Folsom

Most of us have watched it happen hundreds of times on TV and in the movies: “You are under arrest.” As any fan of Law & Order knows, each episode includes those words.

What most of us have NOT done is watch it happen to ourselves. But people who have been through the experience are quick to remind the rest of us that fantasy has little to do with reality. I’ve been told that fear is the most lasting impression.

About six weeks ago, the U.S. Supreme Court issued a ruling which ensures that the experience of arrest will now often include a memorable dose of humiliation. In a 5-to-4 vote, the court ruled that

“…officials may strip-search people arrested for any offense, however minor, before admitting them to jails even if the officials have no reason to suspect the presence of contraband.”

To be clear on what “any offense” means, Justice Steven Breyer’s dissent cited the strip search of a nun “who was arrested for trespassing during an antiwar demonstration.” He also described the strip search of individuals arrested “for such infractions as driving with a noisy muffler, driving with an inoperable headlight… or riding a bicycle without an audible bell.”

This ruling gives jail officials free rein to do likewise.

I realize that some of what follows may suggest that I am taking a position on strip searches. For the record, my opinion is unimportant. What matters is to understand just how exceptional this ruling is, and to provide an explanation that makes it understandable. Socionomics makes this possible.

Think for a moment about how many procedural hoops law enforcement officials must jump through to make an arrest. Police can’t act on hunches. They typically must establish “probable cause.” Yet even then they can’t enter a home or residence until a magistrate issues a search warrant. The officer who makes an arrest must inform a suspect that he or she has the right to remain silent (etc.). After the arrest comes habeas corpus, meaning authorities have a day or two to appear in open court and show they had sufficient evidence for the arrest — otherwise the judge will release the suspect.

Now, every step of this process is a limit on the government, backed by Supreme Court precedents. Every step also includes great risks. Countless criminals have gone free for the lack of probable cause, or during the wait for a search warrant, or when a cop failed to give a Miranda warning, or when the evidence did not satisfy habeas corpus.

The courts, the police, the politicians and we the people all understand this risk in some way. And we live with it. Most of us see this as the trade-off we make on behalf of the presumption of innocence. The still-deeper trade off is, “Let justice be done though the heavens fall.”

Contrast all of the above with the court’s strip-search ruling. It is indiscriminate, gives all benefit of the doubt to the government, and is unwilling to accept any risk in order to protect the dignity of individuals who are presumed innocent.

Specifically, the court’s logic is to reject the premise that there are too many “false positives“. Justice Anthony Kennedy wrote for the majority, saying “People detained for minor offenses can turn out to be the most devious and dangerous criminals” — and then cited the traffic stops of Timothy McVeigh and the September 11 bombers.

What to make of this ruling from the Supreme Court? Why would the judicial branch — which has done so much to limit government and protect individual rights — give so much indiscriminate authority to the state? More importantly, why now?

Put simply, “authority” is the key idea. Our studies show that when social mood is in decline, governments typically expand their power — even the functions which otherwise resist the expansion of authority. The logic of pre-crime overcomes the presumption of innocence.

At the same time, powerful social forces seek to take back authority the state already has. The polarity between the sides escalates. This is not a trend you want to read about “later” — it’s one to stay ahead of. No publication is better equipped to that end than The Socionomist. Follow this link to learn how to subscribe.

Andrea Dibben contributed research.

If you would like to receive the best of Social Mood Watch and other free socionomics content each week, sign up here.

This article is syndicated by The Socionomist, a publication of the Socionomics Institute, and was originally published under the headline Though the Heavens Fall, Let Them Be Strip Searched. The Socionomist is designed to help readers understand and anticipate waves of social mood. Copyright © 2012 Socionomics Institute.

Foreign exchange trading can be hectic and extremely stressful. If traders take their eye off the ball for just a few minutes it can lead to the difference between a great
deal and a lost cause. It can take years to hone the skills to be a good trader and that’s why the financial markets need web hosting packages that take these
skills and make the best use of them. The best VPS for Forex will do just that – it will work efficiently with the trader to ensure that information is up to
date and can be acted on in an instant. Seconds are vital so downtime needs to be absolutely minimal – not something that all web hosting packages can claim.

Forex hosting is very specific, in that it needs to be doing its job 24 hours a day. So, even when traders are catching up on some much-needed sleep, the software has to keep
working hard; it has to keep scanning international markets and be ready to jump to attention and deal with trades at a moment’s notice. That’s the beauty
of the best VPS for Forex: it’s on the go all the time, even when traders have switched off their computers for the night and escaped from their desks.

So much in the financial markets depends on the success of foreign exchange traders. They are the eyes and ears of the markets and the deals they do can have a major impact on the economy and other aspects of the financial markets. It’s imperative that their web host can take the strain and deal with the quick-thinking and instantaneous decisions that are required on a daily basis. They often have to make million-dollar decisions at the flick of a switch but if that switch doesn’t react quickly enough then they could lose the deal, or shave a huge percentage from their profits.

Forex VPS takes some of the stress out of trading. It allows Forex traders to relax and concentrate on tracking the markets and putting together strategies, safe in the knowledge that their web host will be primed and ready to react as soon as they need to push the button and do the deal. If there is any possibility of the web host
not playing its part or of their being unnecessary downtime then a trader will instantly lose confidence in the hosting package and this will ultimately affect their professional performance and – most importantly – their results. In financial trading, web hosting is everything. It needs to be reliable and fault-free in order to carry out intricate financial deals with confidence.

Forex VPS is the system that a lot of foreign exchange traders trust and rely on for their daily deals. It has minimal downtime and is up to the job, being fast and efficient at every turn.

London Gold Market Report
from Ben Traynor
BullionVault
Monday 2 July 2012, 07:30 EDT

U.S. DOLLAR gold bullion prices hit $1597 an ounce during Monday morning trading in London – in line with where they ended last week – while European stock markets ticked higher following the release of better-than-expected European manufacturing data.

“Gold still remains in the same range since early May,” say technical analysts at bullion bank Scotia Mocatta, adding that gold “would have to move above trendline resistance [at $1624] to reverse the bearish posture.”

Silver bullion this morning climbed as high as $27.58 an ounce – also in line with last week’s close – as other industrial commodities fell, with WTI crude oil down below $84 a barrel.

US Treasury bonds edged higher, while UK and German government bond prices fell.

Eurozone manufacturing activity continued to contract last month, with the Eurozone PMI staying unchanged at 45.1 – slightly above consensus forecasts.

Germany’s manufacturing PMI dropped from 45.2 to 45.0 – though this too beat expectations.

Eurozone joblessness meantime ticked higher in May, with the unemployment rate rising to 11.1%, up from 11.0% in April, figures published Monday show.

The European Central Bank is expected to cut its main policy rate below 1% when it meets on Thursday, according to a poll of economists by newswire Reuters.

ECB president Mario Draghi said Friday he is “actually quite pleased” with the outcome of last week’s European Union summit, at which it was agreed rescue funds could be used to directly recapitalize banks – but only after the creation of a single banking supervisory body.

“The ball is [now] very much in the ECB’s camp,” says Gilles Moec, London-based European economist at Deutsche Bank.

“We are staunch believers that gold will remain a risk-on asset for the foreseeable future,” says Nikos Kavalis, metals analyst at RBS.

“If we continue to see a more definitive policy response by authorities, gold will continue to benefit…[but] the investment bid will be essential for the price to move up.”

In Vienna, Austria is today expected to become the latest Eurozone country to ratify the creation of the European Stability Mechanism, the permanent bailout fund that was supposed to become operational yesterday and is now scheduled to launch next Monday, when lawmakers vote on the issue today.

The German Bundestag voted in favor of ratification on Friday, although the ESM still needs to be approved by the German Constitutional Court.

Here in the UK, June’s manufacturing PMI came in better-than-expected Monday at 48.6, up from 45.9 in May, though the figure suggests continued contraction in the sector.

Britain is “in the middle of a deep crisis,” Bank of England governor Mervyn King said last week.
“I don’t think we are yet half-way through.”

The Bank’s Monetary Policy Committee announces its latest monetary policy decisions this Thursday, including whether it will launch another round of quantitative easing to add to the £325 billion in asset purchases already undertaken.

“Our working assumption is that the committee will raise the QE limit by £50 billion,” says Peter Dixon, global equities economist at Commerzbank.

“But given the fragility of the economy and financial markets we cannot rule out an even bigger increase.”

Elsewhere in London, some traders at Barclays may have believed the practice of underreporting borrowing costs had tacit approval from the Bank of England, according to newspaper reports.

Barclays was fined £290 million last week after it admitted some of its staff gave inaccurate information about the borrowing costs to the committee that sets Libor – the London interbank offered rate widely used as a benchmark.

Former Barclays chairman Marcus Agius, who resigned Monday, and chief executive Bob Diamond are due to appear before the Treasury Select Committee this week.

Reports suggest that a conversation between Diamond and the Bank’s deputy governor, financial stability Paul Tucker may have led to the impression among some staff that the Bank, concerned that Barclays’ Libor submissions were higher than its peers, was content for Barclays to underreport. The Bank of England denies it was aware of attempts to manipulate Libor.

China’s manufacturing sector grew at its slowest pace for seven months in June, according to official purchasing managers index data published Sunday. China’s National Bureau of Statistics reported last month’s PMI as 50.2 – down from 50.4 a month earlier. A figure above 50 indicates the sector expanded, while below 50 suggests contraction.

“New export orders placed at goods producers dropped at the steepest rate in over three year,” says HSBC in the report accompanying its own PMI figure. HSBC’s privately-produced PMI was 48.2 for June, up from 48.1 the previous month.

“It is all about growth and employment,” says HSBC economist Qu Hongbin.

“Growth is likely to be on track for further slowdown…we expect more decisive easing efforts to come through in coming months.”

“We expect the government to loosen policy further to ensure economic growth rebounds in the third quarter,” agrees Nomura economist Zhang Zhiwei, who predicts the People’s Bank of China will cut banks’ reserve requirement ratio – the amount they have to hold in reserve as a proportion of assets – by 0.5 percentage points this month.

China was the world’s biggest source of gold bullion demand in the six months to the end of March, overtaking previous world number one India.

Over in New York, the so-called speculative net long position of gold futures and options traders on the Comex – calculated as the difference between bullish and bearish contracts held by noncommercial traders – fell 16% in the week to last Tuesday to the equivalent of 360 tonnes of gold bullion, figures from the Commodity Futures Trading Commission show.

“We regard the current skepticism displayed by speculators to be constructive [for gold],” says a note from Commerzbank this morning, adding that most traders’ fears should now be “priced in”.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Senior Strategist at Jyske Bank, Ib Fredslund Madsen, believe that last week’s positive EU summit will rub off on the markets this week.

This week, however, two interesting events can change that picture. ECB announces its monetary policy decision on Thursday and Friday the U.S. job report arrives. Ib Fredslund Madsen believes the ECB will have to come with either a rate cut or other form of relief in order to not disappoint the market. With regards to the U.S. job report Ib Fredslund Madsen believes, that anything under 100,000 new jobs will disappoint. Jyske Bank believes in between 100,000-120,000 new jobs.

Legal information

Video courtesy of en.jyskebank.tv

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Greetings,

Trading commodities is no easy task.

You need guts, skill and patience to find and act on the opportunities — and avoid the pitfalls — inherent in commodity trading. What’s the one thing that helps?

…A good trading mentor.

A mentor who helps you find the next high-confidence commodity opportunity. Someone who can show you how to spot them on your own.

Our friends at Elliott Wave International have just announced a new, free event for traders: The Top Commodity Opportunities on the Board — And How to Act on them.

Chief Commodities Analyst and veteran Elliott wave instructor Jeffrey Kennedy acts as your personal opportunity scout for a full week. He’ll walk you through actionable commodity trading opportunities via 5 video forecasts beginning Monday, July 2, through Tuesday, July 10.

Sign up now, and you’ll also get instant access to Jeffrey’s 15-minute video highlighting a few of the commodity opportunities he’ll be covering in the days ahead, plus a brief overview of the Elliott Wave Principle.

Get complete access to the most exciting commodity opportunities unfolding right now— through Tuesday, July 10.

Learn more and get instant access to EWI’s commodity trading event — before it ends on July 10.

About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world’s largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.

Source: ForexYard

The euro was able to close out last Friday’s trading session with its biggest one-day gain against the US dollar in eight-months. The EUR/USD shot up well over 200 pips after euro-zone leaders pledged to reduce Spain and Italy’s borrowing costs. The pair finished out the week at 1.2651. This week, analysts are warning that the euro’s recent gains could be short lived as investors learn more about the agreement between EU leaders and whether or not it is plausible. Traders will also want to pay attention to this week’s euro-zone Minimum Bid Rate followed by the US Non-Farm Employment Change on Friday. Both indicators could lead to significant market volatility.

Economic News

USD – Risk Taking Leads to Dollar Losses

The US dollar took substantial losses against several of its main currency rivals on Friday, following an announcement that EU leaders have agreed to several measures to combat the euro-zone debt crisis. The news led to risk taking among investors and sent the safe-haven dollar tumbling against both the Australian dollar and British pound. The AUD/USD gained over 215 pips for the day before finishing out the week at 1.0241. The GBP/USD saw gains of close to 190 pips and finished the week at 1.5704.

This week, in addition to any new developments out of the euro-zone, dollar traders will want to remember that the all-important US Non-Farm Payrolls figure will be released on Friday. The indicator is considered the most important news event on the forex calendar, and consistently leads to heavy market volatility. At the moment, analysts are predicting that the US added only 92K jobs in June, which if true, would signal a slowdown in the US economic recovery and could result in heavy dollar losses. That being said, if Friday’s news shows that more jobs were added than originally forecasted, the dollar could reverse some of its recent losses.

EUR – Analysts Warn EUR Gains Could be Temporary

A pledge by euro-zone leaders to actively work to bring down borrowing costs in Spain and Italy, as well as an agreement to establish a single supervisory body for all euro-zone banks, led to significant euro gains throughout the day on Friday. In addition to the over 200 pip gain vs. the dollar, the euro also turned bullish against the yen and British pound. The EUR/JPY closed the week at 100.94, up around 225 pips for the day. The EUR/GBP gained close to 80 pips, reaching as high as 0.8094, before staging a downward correction to finish out the day at 0.8054.

This week, analysts are warning that the euro’s recent bullish streak may be short lived as more details regarding the deal reached by euro-zone leaders are released. There are fears that the EU simply does not have enough funds to bring down Spanish and Italian borrowing costs. Furthermore, traders will want to pay attention to the euro-zone Minimum Bid Rate and ECB Press Conference on Thursday. A pessimistic outlook on the euro-zone economic recovery may cause the common-currency to give up some of its recent gains.

Gold – Risk Taking Leads to Gains for Gold

The price of gold spiked on Friday, as investors shifted their funds to higher yielding assets following positive developments out of the euro-zone. Gold was up over $40 an ounce for the day, and was able to close out the week at $1597.28, just below the psychologically significant $1600 level.

This week, gold traders will want to continue monitoring developments out of the euro-zone, particularly regarding the details of the recent agreement among EU leaders designed to combat the region’s debt crisis. Any signs that the agreement is not feasible could result in risk aversion in the marketplace, which could send the price of gold down.

Crude Oil – Oil Finishes the Week on a Bullish Note

Crude oil was able to benefit from risk taking in the marketplace on Friday and finished out the day up over $6 a barrel. The bullish trend was attributed to positive euro-zone developments which weakened the dollar and made oil cheaper for international buyers. Crude closed at the week at $84.94.

This week, oil traders will want to pay attention to US news, in particular the US Non-Farm Payrolls figure on Friday. Growth in the US labor sector has stagnated over the last several months. Should this Friday’s news come in below expectations, investors may shift their funds to safe-haven assets, which could result in the price of oil dropping.

Technical News

EUR/USD

Most long-term technical indicators show this pair range-trading, meaning that no defined trend can be determined at this time. Traders may want to take a wait and see approach, as a clearer picture is likely to present itself in the near future.

GBP/USD

While most long-term technical indicators place this pair in neutral territory, the MACD/OsMA appears to be forming a bullish cross. Traders will want to keep an eye on this indicator. Should the cross form, it may be a sign of impending upward movement.

USD/JPY

The Bollinger Bands on the weekly chart are narrowing at the moment, indicating that this pair could see a price shift in the coming days. Furthermore, the MACD/OsMA on the same chart appears to be forming a bearish cross. If the cross forms, it may be a good time to open short positions.

USD/CHF

Both the Williams Percent Range and Relative Strength Index on the weekly chart appear close to crossing into overbought territory. Traders will want to pay attention to these two indicators. If they continue going up, it may be a sign of an impending bearish correction.

The Wild Card

AUD/CAD

The daily chart’s Slow Stochastic has formed a bearish cross, indicating that downward movement could occur in the near future. This theory is supported by the Relative Strength Index on the same chart, which has crossed into overbought territory. This may be a good time for forex traders to open short positions ahead of a possible downward breach.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Article by Investment U

Are the Rich Smarter Than You?

by Alexander Green, Investment U’s Chief Investment Strategist
Friday, June 29, 2012: Issue #1805

Growing up, when I got into an argument with my mother, she would sometimes resort to the nuclear option, her tried-and-true conversation stopper.

Putting her hands on her hips and using the worst faux Southern accent imaginable, she’d say, “Well if you’re so damn smart, why aren’t you rich?”

I never knew how to respond to this. Of course, I was 12 at the time and the deadbeats on my paper route kept margins low. Still, it ingrained in me the notion that the rich must have a little something extra going on upstairs, otherwise we’d all be rolling in it. Right?

There is, in fact, some evidence to support this. According to a recent report from the U.S. Census Bureau, there is a strong positive correlation between income and education. Over an adult’s working life, on average…

• High school graduates should expect to earn $1.2 million;
• Those with a bachelor’s degree, $2.1 million;
• Those with a master’s degree, $2.5 million;
• Those with doctoral degrees, $3.4 million;
• And those with professional degrees, $4.4 million.

But here’s the rub. Studies show that those who earn the most aren’t necessarily the richest…

How to Determine Real Wealth

To determine real wealth, you need to look at a balance sheet – assets minus liabilities – not an income statement. Just ask Dr. Thomas J. Stanley, the bestselling author of The Millionaire Next Door and perhaps the country’s foremost authority on the habits and characteristics of America’s wealthy. Many of his findings are just the opposite of what you’d expect.

For example, we generally envision millionaires as Bentley-driving, mansion-owning, Tiffany-shopping members of exclusive country clubs. And, indeed, Stanley’s research reveals that the “glittering rich” – those with a net worth of $10 million or more – often meet this description.

But most millionaires – individuals with a net worth of $1 million or more – live an entirely different lifestyle. Stanley found that the vast majority:

• Live in a house that cost less than $400,000.
• Do not own a second home.
• Have never owned a boat.
• Are more likely to wear a Timex than a Rolex.
• Do not collect wine and generally pay less than $15 for a bottle.
• Are more likely to drive a Toyota than a Beemer.
• Have never paid more than $400 for a suit.
• Spend very little on prestige brands and luxury items.

This is certainly not the traditional image of millionaires. And it makes you wonder, who the heck is buying all those Mercedes convertibles, Louis Vuitton purses and $60-bottles of Grey Goose vodka? The answer, according to Dr. Stanley, is “aspirationals,” people who act rich, want to be rich, but really aren’t rich.

Many are good people, well-educated and perhaps earning a six-figure income. But they aren’t balance-sheet rich because it’s almost impossible for most workers – even those who are well paid – to hyper-spend on consumer goods and save a lot of money. (And saving is the key prerequisite for investing.)

This notion shocks many Americans. Dr. Stanley recalls an appearance on Oprah when a member of the audience asked the question, one he’s heard hundreds of times before:

“What good does it do to have all this money if you don’t spend it?”

She was angry, indignant even. “These people couldn’t possibly be happy.”

Keeping Up With the Joneses and Smiths

Like so many others, this woman genuinely believed that the more you spend, the better life is. Understand, we’re not talking about people who live below the poverty line. (Clearly, their lives would be better if they were able to spend more.) We’re talking about middle-class consumers and up, those who often live beyond their means and then find themselves under enormous pressure, especially in a weak economy.

Some were overly optimistic about their earning prospects. Others didn’t realize that they are up against an army of the best and most creative marketers in the world, whose job it is to convince you that “you are what you buy,” that you need to outspend – to out-display – others. The unspoken message behind the constant barrage of TV and billboard ads featuring all those impossibly good-looking men and women is that you are special, you are deserving, and you need to look and act successful now.

According to Dr. Stanley, “The pseudo-affluent are insecure about how they rank among the Joneses and the Smiths. Often their self-esteem rests on quicksand. In their minds, it is closely tied to how long they can continue to purchase the trappings of wealth. They strongly believe all economically successful people display their success through prestige products. The flip side of this has them believing that people who do not own prestige brands are not successful.”

Yet “everyday” millionaires see things differently. Most of them achieved their wealth not by hitting the lottery or gaining an inheritance, but by patiently and persistently maximizing their income, minimizing their outgoing and religiously saving and investing the difference.

You Aren’t the Car You Drive or the Watch You Wear…

They aren’t big spenders. They just recognize that real pleasure and satisfaction don’t come from the car you drive or the watch you wear, but time spent in activities with family, friends and associates.

They aren’t misers however, especially when it comes to educating their children and grandchildren – or donating to worthy causes. Although they are disciplined savers, the affluent are among the most generous Americans in charitable giving.

Just how prevalent are American millionaires? According to the Spectrum Group, there were 6.7 million U.S. households with a net worth of at least $1 million at the end of 2009. Very few of them won a Grammy, played in the NBA, or started a computer company in their garage. Clearly, thrift and modesty – however unfashionable – are still alive in some parts of the country.

So while millions of consumers chase a blinkered image of success – busting their humps for stuff that ends up in landfills, yard sales and thrift shops – disciplined savers and investors are enjoying the freedom, satisfaction and peace of mind that comes from living beneath their means.

These folks are turned on not by consumerism but by personal achievement, industry awards, and recognition. They know that success is not about flaunting your wealth. It’s about a sense of accomplishment… and the independence that comes with it. They are able to do what they want, where they want, with whom they want.

They may not be smarter than you, but they do know something priceless: It is how we spend ourselves – not our money – that makes us rich.

Good Investing,

Alexander Green

Editor’s Note: This column was excerpted from Beyond Wealth: The Road Map to a Rich Life, by Investment U and Oxford Club Investment Director Alexander Green.

The book – endorsed by Pulitzer Prize-winner Daniel Walker Howe and Whole Foods Founder and CEO John Mackey – is a fascinating exploration of the intersection between money, personal fulfillment and successful living. Beyond Wealth is available at bookstores nationwide. Or you pick up a copy from Amazon here.

Article by Investment U