Dr. Anthony M. Criniti IV - The Most Important Lessons in Economics and Finance: A Comprehensive Collection of Time-Tested Principles of Wealth Management

A Comprehensive Collection of Time-Tested Principlesof Wealth Management

DR. ANTHONY M. CRINITI IV

CRINITI PUBLISHING

Copyright 2013 by Dr. Anthony M. Criniti IV

All rights reserved.

Published by Criniti Publishing, Philadelphia, PA

Criniti Publishing, Philadelphia, PA

The text of this publication, or any of its parts,may not be reproduced in any manner without the prior writtenpermission of the author.

This publication is for informational purposes only.It is sold with the understanding that the author and the publisherare not engaged in providing financial, legal, or otherprofessional services. If financial, legal, or any other form ofadvice is needed, please consult a financial advisor, an attorney,or another professional advice giving entity.

I would like to dedicate this book to the futureheirs of my simple kingdom. This may include the government, whichmight tax my estate as a source of its revenues. I would also liketo dedicate this book to all those who inherit the earth, bothpresent and future. May the lessons taught here be used wisely toimprove the world and make it a better place to live and love. Onlyproper management of money, and other forms of wealth, in the realmof both economics and finance, can lead to the allocation ofdedicated, ethical, and great leaders that our world, and all ofits beings, deserves.

Table of Contents

This book was writtenas a follow-up to my former book, The Necessity of Finance,where a foundation was set to explain the characteristics andsignificance of economics and finance. We now continue our learningjourney by exploring the most important lessons of these twosciences. These lessons, expressed in the form of principles, aremy bold attempt to summarize what has been learned since thebeginning of record keeping on the wealth management of economicand financial entities.

The principles are a result of anaccumulation of over fifteen years of notes on these subjects thatI have gathered from my experience in the financial field, rangingfrom being a financial consultant to my current role as a financeprofessor teaching at the undergraduate and graduate levels atvarious universities. They are also derived from a variety ofsources, including the works of many of the greatest contributorsto the two sciences. To my knowledge, they represent the mostcomprehensive collection of qualitative principles in the field ofeconomics and finance.

I give these lessons to you from the bottomof my heart, with the best intentions, to reveal the secrets of twoof the most important sciences. But reading these principles aloneis not enough to master them. You must live them. You must think ofcreative ways to learn these lessons by incorporating them intoyour daily life. Mastery may take decades, but choosing not to tryto master your own wealth can result in harsh consequences, asnoted in my previous work.

This book starts with an introductoryoverview of its contents. Next, there is an overview of variousrelated terminology to help you understand the major concepts used.For example, there is a distinction made between laws, lessons,rules, and principles. Third, there is a chapter on the literaturereview of the related content. Fourth, there is a chapter thatdiscusses how the categories were created for the actualprinciples. This book also elaborates on the methodology used andvarious opportunities for future research. Sixth, a chapter is alsodedicated to stating any limitations to the material presented.Next, the weight of this book is in Part 2, where the actualprinciples are explored. Finally, a conclusion is provided in Part3 to summarize what was learned in the previous sections of thebook.

This book is targeted to a wide audience,particularly beginners to advanced-level economics and financestudents. It is recommended that all students read The Necessityof Finance before proceeding to this book as it will create abetter introduction to the various concepts used. However, it isnot required. Beginner students can benefit by exploring theprinciples individually and building familiarity with variousconcepts.

Advanced students and practitioners are aparticular target for this book. Some of the feedback that I havereceived from them on my last book is that they wanted a book thatcan help them improve their wealth. This book is my attempt tocapture the most important lessons from the sciences of economicsand finance. Learning these lessons better prepares you to manageyour wealth to maximize it. Hopefully, these advanced students willbe able to capture this knowledge through intense study of theseprinciples.

Economics and finance are very promisingsciences that can be helpful to all who spend time studying andpracticing it. However, I want to be clear that they are not easyfor the average student. This book is designed to bestudent-friendly, and can be used as a required or supplementaltext for colleges or universities. Finally, this book may serve asa direct learning tool to help you create your own path to economicand financial independence.

The information in this book covers a widevariety of topics. Some material may interest you, and some maynot. The best way to approach it is with patience. You areencouraged to take notes and review sections that are of interestto you. Later, if you decide to take an economics or finance class,you can always refer back to it for maximum results.

I highly recommend reading this book slowly.If you move too fast, then you may not have reflected deeply enoughon the underlying lessons and/or you may become overwhelmed withinformation. In particular, it is recommended that you read no morethan five principles a day. Ideally, one principle a day is thebest practice. Read it early in the morning when you wake up. Thenspend the rest of the day reflecting on the essence of it and howit will help you better understand how to manage your wealth.

Finally, I have attempted to write this bookas objectively as possible, but from time to time my opinions mayappear. However, this should have a very limited effect on the maingoals of the book, which are to expand off the new paradigm of theeconomic and financial concepts introduced in The Necessity ofFinance; explore the most important lessons in economics andfinance; provide a platform for economic and financial entities tobe able to better manage their wealth; and create a foundation forfuture research studies on these subjects. Enjoy!

Long before theinvention of standardized money, people have contemplated ways toincrease their wealth. Unfortunately, only a small minority ofpeople throughout most of modern human history were allowed toenjoy the benefits of being wealthy. Many of the majority livedeither as slaves or in deep hopeless poverty; thus, there waslittle need for them to think about managing something they hadlittle or no right to have. Eventually, many complex events overtime have led to many changes in the way humans perceive wealth andthe increased probability for anyone to obtain it.

Starting roughly about 250 years ago, itbecame necessary to create economics, the science of managingwealth for a nation or a division of a nation (here-after called