Phron Weekly #1: The Power of Consistency in Personal Growth

Hi Everyone,

Welcome to the first edition of Phron Weekly! Today's review is inspired by an award-winning theater artist, André De Shields, and the role gold plays in capital markets.

Reflections and Growth

The award-winning theater artist André De Shields said, “Slowly is the fastest way to get where you want to be,” as number 2 of his 3 cardinal rules for sustainability and longevity. This phrasing is elegant and practical, and I will explain why this is profound.

So what does it mean? First, if you truly want to get somewhere, you must work consistently. Most things in life are marathons, not sprints. Therefore:

• You must rely on discipline, not emotions, to get where you want to be.
• Rather than trying to shortcut the process and get results now, you must focus on timeless principles that will get you to the ultimate goal.
• Consistency compounds. Imagine that you set yourself up to improve at the beginning of the year at a specific rate and time. You will be better at the end of the year, but how much depends on your pace. Here are some different schedules:
• 20% better every month puts you at 8.92x better than the start.
• 5% better every week puts you at 12.64x better.
• 1% better every day puts you at 37.78x better.
• Focus more on consistency than immediate results, and you will turn out much better than if you had moved fast for a short period.

Focus more time on being disciplined and consistent rather than fast and motivated. Your future self will thank you.

Your Next Move

This week, consider the areas in your life that you are inconsistent in. What are the reasons for it? Are you trying to go too fast, or are you letting the busyness of life dictate your priorities?

Business Insights

Banking on Gold: What Basel III Means for Your Investments

In June 2021, Basel III, a global banking regulatory framework, reclassified gold as a Tier 1 asset, making it just as safe as cash and government bonds. Basel III was established by the Basel Committee on Banking Supervision (BCBS), an international organization that sets global standards for banking supervision and regulation. BCBS operates in 28 jurisdictions, including the United States, the EU, the UK, Japan, China, and India.

Basel III was introduced to avoid a repeat of the 2008 financial crisis. During the crisis, many banks were over-leveraged and undercapitalized despite previous regulations. Basel III encompasses new rules on liquidity, leverage, and systemic risks to ensure greater bank stability. Capital tiers were assigned to ensure that financial institutions have enough capital to meet obligations and absorb unexpected losses. Asset classes were assigned different Tiers - Tier 1 is a bank's core capital, while Tier 2 is supplemental capital. Since banks must hold a certain amount of Tier 1 assets to reduce risks, they are now incentivized to hold more gold. Gold's reclassification is based on several reasons:

• Historical stability - Gold has been used for centuries to store value and hedge against inflation, economic downturns, and currency fluctuations.
• Liquidity - Gold is highly liquid, meaning it can be easily bought and sold in global markets without a significant loss of value.
• Asset diversification - Regulators aimed to encourage banks to diversify their reserves beyond traditional forms like cash or government bonds.

Considering this information, here are some actionable takeaways for you:

• Consider diversifying your portfolio with gold, physical in particular. ‘Paper’ gold, such as ETFs or Futures, are considered a Tier 3 (risky) asset for banks.
• Watch the markets: Gold prices often rise during economic uncertainty, so be strategic about when you invest.
• Long-term play: Physical gold is a safe asset to hold over time, especially in volatile economic periods.

You can learn more here:

• Basel III: international regulatory framework for banks
• Basel III and the Gold Market
• Investopedia: What are the Basel III rules, and how does it impact my bank investments?
• World Gold Council: Basel III and the Gold Market
• Investopedia: Tier 3 Capital: Definition, Examples, vs. Tier 1 and Tier 2

Fun Fact: Did you know the Turtle and the Hare story dates back to ancient Greece and is part of Aesop's Fables, which were told over 2,500 years ago to convey moral lessons? The tale emphasizes the value of persistence and steady progress over speed and overconfidence.

Bonus Fun Fact: The turtle is conveyed as a tortoise in some versions of the fable. Tortoises are known for their resilience, efficiency in harsh environments, and longevity. These characteristics are attributed to their slow metabolism and unique ability to repair their DNA and cells!

Disclaimer: The content of this newsletter is for informational purposes only and does not constitute professional advice.