Showing posts with label tangible investments. Show all posts
Showing posts with label tangible investments. Show all posts

Monday, May 27, 2013

Investing These Days

Lately I have been looking at where we seem to be going and questioning some things. How we can best prepare for the realistic range of potential scenarios in a balanced way. Of course I am not a financial adviser or a broker or anything like that. If you choose to do something I am doing or follow my thinking correctly or incorrectly any consequences are entirely on you. Consult appropriately licenses professionals or do your own research then make adult choices.

Between low earnings on secure investments (that are really negative after inflation) and my concerns for the stock market I am less and less sure that stocks, funds, etc are the way to go. I want to go a little outside of the box here. So in addition to things that you can reasonably expect to make money we will talk about ways to work it from the other side by saving money, which will give you more disposable income for other things.

Some survivalist type folks say you should have X amount of food, guns/ ammo, medical stuff, etc all before investing. Of these people some have a vested financial interest in you buying all of this stuff right away; they may even conveniently sell the stuff they recommend! Other people are well meaning, in fact they likely practice what they preach, but arguably are misguided.

The Dave Ramsey type approach lets you mass efforts putting a lot of money towards one goal. This can have an advantage for some people as they can see something getting done which is encouraging as well as rewarding. So the idea is that people are more likely to keep going. If you need that kind of reinforcement then stick with a massed type approach.

Financially we do things in a pretty compartmentalized way. Of course we have normal household expenses. A goes to fun stuff, B goes to precious metals or food, C goes to savings, D goes to retirement investing, etc. The downside of this approach is nothing happens that fast. The up side is that we are working on a lot of things at the same time in a balanced way. It can get a bit confusing but overall this approach has worked really well for us.

Along the lines of compartmentalization I think most people need to be saving for the long term NOW. At least 10% of take home with 15% being even better. The reason I say this is that it is always easier to save tomorrow, until tomorrow. First you are just starting out, then you want to have kids, after that it's about time to buy a home, the point is there is never a great time to get started. It will always be easier tomorrow so you might as well just start today. 

The biggest exception to starting long term savings now that I can think of is paying off high interest debt. Putting money away that might be making a 3-4% while paying Visa 19% does not make sense. Along these lines stop charging anything you will not pay off that month (we use a CC for airline mile, it works fine because we never carry a balance) then throw all available money at whipping those nasty high interest debts.

[Begin tangent. Debt is a self perpetuating cycle. First and foremost you are fundamentally paying more money (interest) to have a hamburger today and pay for it tomorrow. The idea of paying more for something you currently cannot afford is silly if you think about it. That whole credit industry is based on people thinking more in terms of instant gratification and how much money would need to be paid monthly, not the total amount an item will cost.

Even beyond interest debt promises your future earnings. Folks get so stretched out paying for all sorts of stuff that they cannot save up to pay cash for stuff. They cannot save up for a new car because they are still paying for the car that is in the driveway now. Why people are mentally unable to save $300 a month to pay cash for a car but can pay $300 a month on a car note baffles me but that is another discussion.

The only way for people to get out of this debt trap (albeit a trap largely of their own making) is to stop borrowing and start paying things off. Since you will still need to live and inevitably things will come up that you will pay cash for, the money to pay off this debt will have to come from increased earnings or living cheaper. Since most people cannot easily earn more money living cheaper is the way forward to get out of debt. End tangent]

Education that will increase your earning power or make your income/ job more secure is always a good place to put money. First nobody can take it away from you. A bunch of digital money could decrease in value or, in an extreme case, vanish tomorrow. On the other hand that same money put into a degree or certification is not going away.

Now I am not against studying Eastern European literature from the middle ages, gay panda bears, apprenticing yourself to a buggy whip maker or whatever. By all means do that stuff. We are however going to focus more on skills/ degrees/ certifications which will increase your earning power. As an added bonus if these skills could transfer to a collapse type scenario that is even better. For whatever it is worth if I had it to do over I would have studied something medical.

Skills that will save you money. This muddles with the last idea but to me it is to a smaller degree. You are not going to spend a decade becoming a journeyman plumber so you can fix the toilets in your house. Nor do you need to. Learning a little bit about plumbing so you can fix the toilet, a bit about carpentry so you can fix the porch, etc is a good option. This may be more of a skill thing and less of an investment thing parse. Though arguably you would be investing your time helping a buddy or spending Saturday morning in one of those home depot classes, etc.

Stuff to use your skills. I'm not so much talking about buying lots of tools, gear, equipment, etc in case you might need it at your home/ homestead. Of course having stuff you use regularly makes sense. Taking the DIY have the equipment mentality extremes can not make financial sense. Example a tool that costs $300 that you might use 1 day a year. You can probably rent that tool for $25 an afternoon. Considering there are many tools you might need occasionally that would be a lot of money.

What I am talking about is more along the lines of having the stuff to either do what you do at work as a side business or to transition your business in the event of a collapse scenario. A welder or mechanic getting enough tools/ wending gear/ etc to run a little side business makes sense. I would strongly suggest doing this over time, with cash, as deals come up.

(Guys borrowing money to get side businesses going often end up in a bad spot. They have to pay the loans as well as any fees or bonds even when they are not working. They cannot transition easily to doing the side gig full time, because it is not consistent, yet the side gig's development is stalled by their day job. Not a good spot to be in. Just pay cash that way if the equipment doesn't make any money it is OK. Also the hard truth is that most small businesses fail. You can have a lot of stuff fail if the costs are your time and $500 in ads, business cards and incidentals. However you cannot have many fail if starting them involves 20k in start up money or loans.)

Some spare disposable stuff would be awful handy. Carpenters need nails, plumbers need pipes, glue, soldering stuff, fittings, etc. You get the idea

Gold- In general I like PM's as a hedge more than an investment. However these days gold under $1,400 is probably a deal with a solid upside.

Silver- Same disclaimer as gold (generally more of a hedge than an investment) but under $23 an ounce with coins/ rounds in the 24-27 range depending on make silver is an excellent deal these days. I think there is a real chance to make a profit (above inflation) in silver in the next couple years.

Land- Raw land is a fine hedge against inflation or economic shenanigans. Land that brings income via timber, rental or crops is a solid investment. For most situations the economics only make sense if you pay cash for the land. Most passive/ rental type uses of land aren't going to consistently make enough money for borrowing (which we aren't a big fan of anyway) to do it to make sense.

Real Estate- Folks who can pay cash are going to make a killing in real estate during this whole mess. There are some real deals out there. I said pay cash intentionally. The real estate rags to riches by borrowing money to get a ton of properties you rent out, each of which pays a tiny bit more than the loan and in time become rich as the property appreciates concept has shown to be utterly flawed. At best it is a real high risk/ high reward proposition. Your individual skills matter a lot but you are at the mercy of the market. Lots of people lost everything doing that.

A person who could get bargains on 2-3 modest rental properties in good neighborhoods could have their money in a safe place, earn a nice little income and be positioned to do well if/ when the market bounces back.

Homes- By this I mean the a home you live in or I guess a piece of land you live on vs something purchased for other than your dwelling. I do not really look at this an investment parse. The reason is that 1) A home as used by most of us does not bring in any money and 2) It fills our need for a place to live. If your home was suddenly worth more we would probably not sell it because we need someplace to live and other houses would probably have risen similarly in price. Also we would look at the traditional idea that homes increase in value and thus are a good investment very differently if inflation over that same time frame was considered.

I am however a big fan of getting a home as a step toward financial security. Since we need to live someplace it makes more sense to own that place than pay somebody else indefinitely for the privileged of living in their place.

Dave Ramsey talks about the "100% down" plan which is saving up till you can pay cash for a house. The issue with this plan is you need to live someplace while doing all of that saving. This plan would make sense if you are able to live very cheaply with family or in a very modest place. However if you are paying $750 rent instead of a $750 mortgage it is a bad plan. While I'm not in love with the idea of a mortgage the only thing less palatable is PAYING SOMEBODY ELSE'S MORTGAGE. Granted only a small amount of early mortgage payments really goes to principal but it's better than nothing.

The primary benefits of buying then ultimately paying off a home from my perspective are first that it locks in your biggest single expense. Rent could go up drastically (or really it would probably be the value of money going down) but a fixed rate mortgage is going to be the same. Ultimately when you pay off said mortgage your biggest single expense is gone.

Just as importantly it puts you in a very secure situation. This security is significant in my opinion. By eliminating that expense you can reassess overall family expenses. Maybe it means you can save like crazy. Maybe it means you can work a bit less and put that time into other things. Maybe you will decide to finally take the plunge to work for yourself. 

If something happens like a job loss or whatever you could live really cheap without worrying about becoming homeless. All you've got to do is come up with tax money once a year, fuel and food. If you have a home with a bit of land where you can grow some food that is even better.

Anyway there are probably some more useful things to mention. If I think of enough of them I'll do a part two. 

Going a bit Alpha Strategy and purchasing things you know you will use might not be a bad idea also.




Wednesday, December 26, 2012

Please Welcome JM Bullion!

We are pleased to welcome our newest advertiser JM Bullion. They offer a wide variety of gold and silver at very competitive prices. Also they do not stick it to you with excessively high shipping costs. I encourage you to consider them for all your precious metals needs.

Thursday, December 23, 2010

Hold? Sell? A Precious Metals Perspective

I read something by a smart person on this. I think it depends a lot on why you purchase precious metals. If you bought them some time ago as an investment this may well be a profit taking opportunity. However if you purchase precious metals as a store of value or emergency currency in case of massive inflation or a full on economic collapse then you would not want to sell.

In precious metals if you lean toward the store of value/ emergency currency side I think it makes sense to have a core holding. This is stuff you do not sell if the price goes up or whatever. Kind of an 'in case of hyperinflation break glass' thing. How much would be in your core holding depends on your income, financial situation, liquid assets and concerns. For a low income family a core holding might be 500 90% silver dimes (about 35 ounces). For an average family a couple hundred ounces of silver and a few ounces of gold would be a very nice stash. A rich man might have a thousand ounces of silver and 100 ounces of gold.

I think one should just buy and hold until they meet their core holding goal. I think life changes could dictate a change in your ideal core holding and it might be a good idea to review it every few years or if you have major life changes.

Monday, December 20, 2010

Financial Preps for WTSHTF or Your Own Personal TEOTWAWKI

Preparing for the worst can be daunting. It is also easy to focus on putting back several rifles, cases of ammo and everything else that goes along with it (Now you need some optics, a safe, spare mags, lights, another safe, etc.), or other emergency gear that we could spend hours listing. Let’s face it – acquiring the cool gear is fun! It’s also one of the most often talked about topics in this community. People like their toys and that’s perfectly fine. But it’s only one leg on your stool. Food and medical preps are covered to a lesser extent but still fairly regularly. Something I feel that is of equal importance, though not near as fun to discuss, is financial security.
I think many people avoid the financial preparedness topic because it can bring you back to reality: sometimes it’s hard to find enough to go around. How can you pay the bills, buy your beans, bullets, band-aids and still find money to save when disaster seems to be looming over the horizon? You better make room for it. That EMP may happen tomorrow or your small town might look like “Jericho” (TV series) next week, but I guarantee you sometime this year your own personal TEOTWAWKI will happen if you don’t put some cash back now. It could be a transmission that starts slipping, a layoff, an ER visit – Murphy will throw something at you when you least expect it. So where do we start?

Rotate Your Stocks AND Your Priorities

Several thousand rounds of center-fire rifle ammo and several reliable battle rifles for you and the family is a noble effort, but not at the expense of everything else. Set up some sort of system where all of your goals are slowly being met. One example can be found below:

Discretionary Spending Schedule:
Week 1: Guns and Gear
Week 2: Medical Supplies
Week 3: Trip to the Local Sam’s or Costco for Food Stocks
Week 4: Cash, Savings or Silver/Gold

Rinse and Repeat Next Month

It doesn’t have to be as rigid as the above example. I grocery shop at Wal-Mart; I’ll throw a box of 9mm and something for the first aid kit in the buggy every week on the grocery trip. I also will put some money back every week to slowly build our reserve. There is no right way to do this, find something that works and stick to it.

So, you’ve got some money set aside for financial preps. What now?

Cash is (for now) Still King

The manager at your local grocer is going to be pretty darn reluctant to let you leave the store with a gallon of milk for a 1964 quarter. Sure he may exchange it for some cash in his pocket but I bet you’re not going to get the most recent spot price from this transaction. If the power is out from the ____ (insert your regional disaster of choice – hurricane, snow storm, earthquake, etc. - here), chances are that credit card is not going to cut it either. Cash still has its place in your safe. One week’s paycheck is probably a good start to get you through most bumps in the road, especially if you already have at least a few weeks of food and a good first aid kit (you do, right?). For larger bumps in the road…

Make a War chest

Not literally, but treat your savings account with the same passion as you would a chest full of sharp pointy battle implements. A lot of folks say aim for 2-3 months worth of expenditures (everything from the mortgage down to gas for you vehicle). My wife and I are taking it a step further and have set the bar at 3 months worth of income (big difference). This is going to take some people longer than others; that’s OK. As long as you are making progress then don’t get discouraged! If an emergency comes up one month and it cuts your war chest in half then look at it like this: Success! You took a hit on the chin and are still standing! Our strategy has another benefit; life is all about timing. Opportunities come and go; if a great deal comes your way on a piece of land or something else and you have the spare cash to jump on it, do it. Just don’t look for excuses to raid your war chest. Make sure it is a worthwhile investment. Then proceed to build your savings back up immediately. Get your savings built up and then start considering…

Silver and Gold

How much precious metal (PM) is enough? It all depends on whom you ask. Just remember, PMs aren’t an investment (well they can be, more in a minute), they are insurance. Investments grow your wealth. Over the long haul, PMs will simply store your wealth. Short-term plays on PMs can be done to turn a profit, but buying and selling coins is the least efficient way to do it. You might as well trade paper gold on the stock market, and that’s not why we’re here. I once read a very interesting article that stated that an ounce of silver today buys approximately what an ounce of silver bought 2,500 years ago (I believe their example was loaves of bread). Try that with any fiat currency in the world! (Well, you can’t – it never stays in circulation long enough) We want to hedge against inflation. PMs are our insurance against the failure of our currency. Whatever currency becomes the world reserve when ours fails, silver and gold will hold value in that denomination as well.

My personal goal would be to eventually (long term) have 1 year’s salary in PMs. I think an 80/20 gold/silver holdings ratio is reasonable, but do your own Due Diligence and find what is right for you. You will probably want to start with silver, but at some point you have to switch to gold because silver gets bulky quick. I’d recommend starting with Pre-64 junk silver and 5-10 oz. bars. If you run across a good deal on some silver eagles, buy them! I bought some silver eagles last week for under spot! How did I do it? I deal solely with a local merchant who I trust completely and him likewise. I can’t stress the importance of dealing locally. If I find a 1965 dime (no silver content) in my roll I bought from my local guy, he graciously exchanges for a silver dime. No questions asked. Try that on E-bay.

I won’t talk about gold much because if you invest in silver first, by the time you are ready to dive into it, you will be fairly savvy with PMs; you will have done extensive research, right?

Now that we’ve covered some financial ground, let’s see if we can change the way we look at our other areas of preparedness to save us some money.

Streamline Your Gear

I have approached my firearms purchases in a manner that reduces the amount of different ammo we have to purchase. We have multiple pistols and carbines serving multiples purposes chambered in 9mm. We have also chose to standardize 12 gauge and 7.62x39.

A case of ammo in any of the above 3 calibers has the immediate benefit of being utilized by multiple firearms. Stocking up is much easier and cheaper.

Of course we have other firearms that are not in our standard calibers, but we don’t stock ammo for them like we do for the standard calibers. In theory you would want not only the same caliber, but the same brand as well. I say “In theory” because this is a tough one. In practice everyone in the family will have different tastes so it may be hard to convince everyone that carrying Glock 19s is in their best interest when they cringe when they have to hold the ugly bugger. A good goal would be to aim for full uniformity, and settle for caliber uniformity.

Another cost saving measure is go out and buy a .22 rifle and pistol if you don’t already have one as soon as it is financially sound to do so. This will obviously save you countless money over the years.

This doesn’t simply go for firearms. Try to buy battery-operated equipment that takes the same size batteries. Once again, this makes stocking up much easier and cheaper.

Make a Budget

The word “budget” can strike so much fear in a man, you would swear Hessians had just breached the privacy fence and are now occupying the pool house. It doesn’t have to be so scary, however. Your budget can be as loose or strict as you like, as long as it serves its purpose. One of the main benefits of the budget is it forces you to think through your expenditures.

I create a simple budget on spreadsheet that first tallies our income for the month, and then deducts all of our estimated expenditures. This allows me to determine our surplus and project what our end of the month balance should be in our account. If we surpass our goal, I do a little dance and then try to determine where I’m overestimating. If we miss our goal, we take step back and determine what went wrong. I don’t subscribe to the Dave Ramsey School of budgeting (budget down to the very last penny) because to me it seems like a lot of effort for not much of an improvement over my simple system. It works for many people, so I’m not knocking it. Find something that works for YOU.

Trim the Fat

Often people tell themselves that they just don’t have the money to save (you may even hear them say this on their brand new iPhone). They’ll say maybe next year, or after the house/car/boat is paid off or the kids are older/grown/etc. – that’s procrastination. One day you may wake up retired and struggling to make it; let’s avoid that outcome.

Internet, home phone lines, cable TV, cell phones, new vehicles every five years, too much house, etc. are all traps people fall in. I won’t tell you to turn off all of your services and move to the hills, but do take a rational look at your expenses and determine what you can reasonably cut or downgrade to allow you to put back some money. One thing I do recommend that has saved me over the years is brown bagging your lunch. Learn to love it. In one year brown bagging can save you enough money to buy that AR you want (Or – several pounds of silver).

Prepare for TSDTWAWKI (The Slow Decline of the World as We Know It)

TEOTWAWKI has happened for thousands of years, but the sun still rises in the east and the birds still fly south for the winter. If you were born in 1910 in Germany and lived 70 years, I’d say you lived through several TEOTWAWKIs (Weimer Germany, WW2, a literal divided nation, etc.). Our grandfathers and great-grandfathers had it hard at times; but they raised families, grew old, and hopefully were able to enjoy some sort of retirement after decades of work. The world may not end tomorrow, but it may slowly change for the worse for the rest of your life. Don’t rely on entitlement programs in your retirement years. Stock up on beans, bullets, band-aids and bullion, but also contribute to your 401K (at least get your company match, if offered), sock away some cash, buy real estate – diversify. Do not over-leverage yourself in our economy, but at the same time don’t rely solely on tangibles as a store of your wealth.

A true survivor plans for all contingencies. His portfolio is as diverse as his options. He buys cases of ammo and rolls of old coins, but he also contributes to his 401K to at least get the match his company offers. He has several acres of land in God’s country somewhere far from the city lights, but he also strives to be debt free. He has the cash on hand to G.O.O.D. and the savings and insurance to come back and rebuild (and the larder to live on until then). He doesn’t know the future so he prepares for all outcomes; no matter what happens his family will have options. He also recalls that Rome wasn’t built in a day, and American affluence has been squandered slowly for a while now; there is trouble on the horizon, so he starts now.

Sunday, October 10, 2010

Voluntary Simplicity

I got to thinking about what voluntary simplicity really means to me. I know it's corny but lets look at both words first. Voluntary means " proceeding from the will or from one's own choice or consent" and simplicity is "the state of being simple, uncomplicated, or uncompounded". So basically you're choosing to have a simple life. A guy who has no skills and generally isn't particularly employable, works at McDonald's and lives in a travel trailer isn't practicing voluntary simplicity. That is just his life. Versus a guy who makes 40k a year and chooses to live in a travel trailer and bank tons of cash who is practicing some voluntary simplicity. 

I see there being two real raw components to voluntary simplicity. How you earn and how you spend/ live. The two go together. Of course how you earn is a huge factor in how you can spend. You can't spend more than you make for very long. Also more subtly how you spend effects how you can live and earn. If you decide not to run up a bunch of debt on stuff you don't really need then maybe you can work less overtime. You can't enjoy a boat or a motorcycle much if you're working weekends and evenings to pay for it. Also if you change the way you spend you can choose to shift to a more rewarding job.

A big part of voluntary simplicity to me is about choosing HOW YOU WANT TO LIVE then adjusting your spending patterns accordingly instead of doing the opposite which is the case for far too many people. We all have different ideas of what your ideal (realistic) lifestyle is. For some it is wanting to have Momma stay at home with the kids. Other folks might want to have more free time or be able to take a month of for hunting season or work from home, retire at 55 or whatnot. This is sort of the idea that your life is more important than the stuff in your life. 

There is also a big amount of freedom which comes with voluntary simplicity. Since it generally means living well below your means with very minimal debt it is a lot easier to save. With that savings you can get even further ahead and then really have some good options. Can't quit your job if it takes a direction you really don't like when you have 2 car payments, a visa payment and generally debt up to your eyeballs. However if you have no debt and a good savings and decide to find another job there isn't anything keeping you from walking away.

For us voluntary simplicity has two real benefits. First it is flexibility. The difference between what we could realistically earn and what we need to maintain our lifestyle is such that we have flexibility/ options. Right now it is very important to us for Wifey to be at home with Walker instead of him being in day care full time and her working. Instead of having say a new BMW we choose to have our kid be raised by his mother. If we had debt and a lifestyle that required two incomes this wouldn't be an option. Remember that at the end of the day debt is the promise of future work and work represents time. If Wifey's future time was promised to a few lenders it could not be spent at home with Walker.

Secondly is security. The difference between what comes in and what we need to maintain our lifestyle is such that we have a measure of security. A lot could go wrong before we were unable to maintain our normal operating budget. We think this is a good thing.

We are pretty financially conservative. My beliefs are kind of a black and tan made of Dave Ramsey and Suze Orman and a shot of tangible investing on the side. Wifey is just really frugal. She hates spending money and loves seeing the balance of our accounts going up. Simply put if you spend everything that come in it is impossible to save. It is also very difficult to get ahead by say paying off a debt at an accelerated rate. Living at the edge of your means, in addition to being a recipe for disaster, ensures you will never get ahead or to a comfortable place. Lets just for the sake of discussion say you want to save, in various forms for various reasons (short and long term, retirement, etc) a total of 30% of your income. It isn't that much really. Figure the smart folks say you should save about 15% for retirement. The debt averse are usually also saving for the next time they need a vehicle or other mid to long term goals. Living below your means is a sort of voluntary simplicity in and of itself.

This seems to be one of those positive feedback loop situations. The further ahead you get the more freedom you have. You live below your means so you start getting ahead. That makes it easy to get debt free and save an emergency fund. Then it isn't a big deal to save for a down payment on a house. Seeing as you live a lifestyle of voluntary simplicity you buy a home you can very comfortably afford and pay it off at an accelerated rate. The whole time you are saving so you're getting even further ahead. Once you pay off your primary residence things really get moving.

I think it is important to note that voluntary simplicity is relative to your income and current lifestyle. It isn't about living exactly a certain way but relatively speaking living a simple and frugal existence. So much of it is relative. It is also worth noting that you don't need to deprive yourself of everything you like; though of course it is all relative to your unique situation. Personal finances are a marathon not a sprint. Baring huge issues like a 350k liar loan on a McMansion when you earn $16 an hour no one thing sinks you. You can realistically choose a couple things that are sort of splurges which are important to you. For us it is travel, right now while we are in Europe we put a lot of money towards getting out and seeing stuff. Though we plan to take our kids on a trip here someday there is the distinct possibility that we may never come back here. Regardless it is never going to get easier or cheaper to see the sites here. When we get back to the states we will allocate far less money towards travel. Other than that we give ourselves some small flexibility to cover the relatively little stuff like designer purses and single malt scotch.

I am pretty happy with our lifestyle of voluntary simplicity. The Wifey notes that we are probably happier than most people because we aren't worrying about getting the next thing. Our next big thing is making money with our investments or meeting a new saving goal instead of a new car or some rims. I like that we aren't worried about making our bills and all that stuff. For us the benefits of flexibility and security more than equal out the downsides of the modest lifestyle we live.

I hesitate to say what is the right lifestyle for others. It is really and truly about how you want to live your life. If it is worth it for you and the Mrs. to work overtime to have a Mercedes and a Land Rover in the garage of a McMansion then who the heck am I to judge you for it. However as the Sheryl Crow song says....
"If it makes you happy. It can't be that bad. If it makes you happy. Then why the hell are you so sad".

Sunday, October 3, 2010

Why Ammo Cans? By Brian

Since you're reading TSLR, you're likely like me in that you're worried about the direction our country is headed and you'd like to protect yourself in the event that things go south - quickly.  Ammo cans are absolutely the best storage option for this sort of thing.  Simply put, you want one of these cans holding your valuables in a time of crisis.  Think of them like a portable safety deposit box.  The ones made after WWII are built to be air-tight and water-tight.  That means you can store just about anything you'd like in them for long periods of time, whether that's ammo, food, shotshells, a gun, a radio, or  medical supplies. Just drop in a pack of silica gel to absorb excess moisture and you'll be ahead of 99% of the populace when it comes to storing emergency supplies.

-Brian is with LuckyGunner.com, a sponsor of TSLR.  Currently, LuckyGunner.com has a special price of $9 being offered on ammo cans, specifically their highly-rated 50 caliber surplus ammo cans from Lake City:  If you buy 10 cans or more, the price is only $7 per can through October 7th.

TOR here: First of all I want to thank Brian and Lucky Gunner for supporting us. Believe me when I say our advertisers really do make this place a lot more active and interesting then it otherwise would be. Anyway onto ammo cans. 

Ammo cans are definitely one of those things you can't have too many of. Just writing this makes me want to order some more ammo cans. They are so darn useful. Personally I use them primarily for their intended purpose to store ammunition. Buy yourself some ammo, put it into an ammo can, toss some silica gel in and you can forget about it. One word of advice though. Inventory and label the  cans before putting them away. Otherwise when you come back in 6 months or a year to grab a box of JHP's for your pistol or target loads for the shotgun you will have to search through a bunch of cans. Not saying I've done that, just that I imagine it could happen. You could easily use a label maker or write with a marker on a piece of tape so one look on the outside could show what the contents are. If you are want to be more discrete or the contents are complicated (versus say 1,500 9mm FMJ) then label them with a number and keep an inventory elsewhere. 


The more I think about it the more uses for ammo cans there are. They are tough, cheap and waterproof. If you want to use them to store fragile stuff then just get some foam or whatever. I know a fellow who keeps his silver in ammo cans. They would also be a good place for all those mags you bought for redundancy or as tangible investments.


I'm sure the ammo cans from Lucky Gunner are totally fine. However as general advice if you buy ammo cans elsewhere just make sure the lid fits properly and that the seals on the top of the lid is intact and soft. Sometimes you will come across ammo cans that are a little bit rusty. That isn't a big deal. Just get some sand paper, or use a metal bristly attachment for a hand grinder and remove said rust. Get a can of spray paint and touch up the spots with exposed metal. I've gotten some real good deals on ammo cans at surplus stores that just needed a half hour of effort to be serviceable.


At a minimum I suggest having enough cans to store all your ammo.


Got ammo cans?

Saturday, September 18, 2010

Buying Silver and Gold

I got an email recently asking about how to get started buying silver. I recalled a post some time back where that was covered. After a bit of digging here it is.

Where to buy precious metals.

Wednesday, May 26, 2010

Gold Is Safe and Stable?

Is gold really a safe and stable investment? Well I guess that is two separate questions. Is gold safe? Gold is safe in the respect that there is no counter party. Gold is safe in that the price is not reasonably going to drop to zero. An ounce of gold is going to continue to be an ounce of gold regardless of outside factors. However this misses the primary point which is being able to trade that gold for goods and services you want and need. It doesn't matter that an ounce of gold is an ounce of gold, it matters what that ounce of gold will buy you. We have this very convenient way of telling what something is worth called money. The beauty of the free market is that large groups of people making individual transactions "set" the price of a given item be it butter, eggs, gold or whatever. Some prices are relatively stable and others vary wildly. Gold is one of those that varies wildly.

It is true that over a very long time gold has been very good at holding its value. If you wanted to bury a capsul to pick up 75 or 150 years from now gold would be a good thing to put into it. Who knows if a given kind of currency will still be around but people have considered the shiny yellow stuff valuable for a long time.

However most of us don't live all that long. Figuring one would probably need to be in their teens or even twenties to have a decent enough job to buy some gold we are looking at not all that many decades.

Over the short term gold prices swing radically. It is interesting that folks who talk about the dollar having 3% annual inflation (just to make up a number) making it totally worthless and unstable seem to think gold which can regularly swing far more than that in a day is just fine. Take a look at the chart above. You will see that somebody who bought gold in about 1980 would have had to wait almost thirty years to sell it and break even and that is BEFORE FACTORING IN INFLATION.

It is simply not accurate to say that gold is always worth the same and the dollar just moves around. Over the long run that might be true (the comparison of a silver dollars value from 1913 to now and inflation is interesting) but not over months or years or even decades. If you look at any of the huge swings gold has made there is just no way to honestly say the real value of a dollar (in terms of what it will get you) changed that much that fast. If the price of gold plummets as it has a couple times that gold will be worth less money if you sell it or fewer goods and services if you barter it.



In my personal opinion there is no way you can consider gold as being stable.
There is sort of a cop out in some circles that every time gold drops in value it is a buying opportunity and every time the price goes up it is a sign they are right.

Some people make money buying gold when the prices are low and selling it when the prices are high just like any other commodity or stock. Also some people make a great living acting or talking on the radio or playing a sport but that doesn't mean I am capable of doing the same.


I am not saying gold is bad. In fact I am fiddling with an old European coin right now, it is sort of my thinking piece. I like gold as an insurance policy. If things go all inflationary or even worse it is going to be worth something. I fall into a buy and hold camp with gold (and silver). I don't put money into gold that I ever plan to use for something else. That gold is going to sit there and occasionally get fiddled with until either I need that "insurance" or I die. I buy it regularly and slowly it is accumulating. The price of gold in terms of currency or by default the goods and services it would get me doesn't matter. I am aware of "spot price" because it lets me know how much and how often I can buy plus it is sort of an interesting economic indicator. Right now in case you missed it the indicator is that people are very scared.

As for people who see massive inflation coming and want to sock every dime they have into shiny metals. I dunno.  I would say that most of the time putting all your eggs into one basket is usually not the best idea. First of all if you want to become more secure then try to get out of debt or at least pay down the nasty high interest consumer stuff. You might want to consider looking at non US stock/ investment options. Pick a part of the world (Asia maybe) and stash some bucks in funds or stocks  of companies there. If you have big money then real estate is a very good choice. A small condo or house or maybe even apartment complex purchased free and clear that can be rented is probably the best way as you get income now and eventually there may be appreciation in a sale.

For a person who was sure there is going to be high inflation over a long period splitting their given wad of cash between precious metals, non dollar denominated or foreign investments and maybe real estate is probably better both in terms of returns and stability than just putting everything into the shiny stuff.

Thoughts?

Thursday, May 20, 2010

Read This

FerFal wrote something awhile back that says a thought of mine better than I could.

One thing I do to keep things strait is to kinda mentally divide investment and preparation type stuff. Investments are something I do with my money to put it to work making more money (value). If I get enough of my money working I can sit back and do what I like. Preparations are a form of insurance to me. A thing I do to try and keep Wifey and I alive if things get crazy.

Tuesday, May 4, 2010

Investment, Prioritizing, Insurance and Asset Allocation.

It is a bit past midnight my time and I can't sleep. Guess that is what I deserve because last night I had the nerve to get 8.5 hours of quality uninterrupted sleep for the first time in 3 weeks. Anyway I was going to the pad of paper I keep by the chair to write down my 2rd post idea for the night and decided I might as well just write the darn thing. I'm up anyway.

I want to talk about  investment, prioritization, asset allocation, and insurance. Far too often we muddle and confuse these terms, much to our detriment. Thinking something is what it isn't can often have less than desirable results.

The term that gets tossed around the most incorrectly is investment. According to Wikipedia "Investment is the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in form of interest, income, or appreciation of the value of the instrument."  I am sure there are numerous other definitions which vary slightly but this is good enough for our purposes. Basically an investment is something you do with money in order to make more money. It might be a stock or a CD or a 10% stake in your buddies business venture but the fundamentals are the same.

In the preparedness community people often say "investment" when they mean prioritization. They will say something like "I invested in some rope and socks today".  It is difficult if not impossible to imagine a situation where they will make any money from 50 feet of manila rope or a bag of tube socks. This is just how they chose to prioritize their resources today. Maybe it is a good way to prioritize because they have some stuff to tie together and a bunch of nasty worn out socks, but it still isn't going to make them any money.

People also regularly say "investment" when they mean "insurance". Back to our friend Wikipedia "Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss." In simple guy talk insurance is something we buy to prepare for something bad. Car/ home/ renters/ health insurance are the easiest to classify but I would also argue that the purchase of beans/bullets/ bandaids/firearms/precious metals often fall into this category. It can however get a bit muddled.

For example lets say I buy 1,000 rounds of 9mm (or whatever) ammunition. If I do not have a lot of ammunition and am purchasing this to ensure I have the means to defend myself in a time of need. This is insurance. Buying 50 sealed cases of rifle ammo at a good deal to take to the gun show in 6 months and make a tidy profit would be an investment. To me with some of these commodities (guess ammo could be considered a commodity) it is more about how you plan to use them than any other single factor. Also remember that taking the time and energy/ research to do the whole buy low sell high thing on a scale which is meaningful is a lot closer to a business which is a whole nother topic.

Lots of stuff that is very prudent to do falls into the insurance category. It is rather unlikely that you are ever going to sell all the canned food in your pantry to somebody from craigs list. It is far more likely that you would eat it if you couldn't go to the store. I have no desire to buy and sell ammo to make money but I do keep a reasonable amount of the stuff around. I keep it as insurance against needing ammo and not being able to purchase it.

Lets get back to our friend with his $17. He is a smart young fellow and wants to invest his money. He goes and talks to an older kid he knows who finds beat up bikes, fixes them up and sells them at a profit. He INVESTS in the business. In return for $17 he gets 25% of the next 4 bikes which turns out to be a nice little profit.

Maybe our friend is a bit more short sided (or in need) and just wants to spend his money. After careful thinking he decided to buy a bunch of tube socks. He did this because he prioritized those items quite high.

Maybe our friend is a bit worried about the future. He is worried he will need to buy something and not have the money to do so. He takes that $17 and puts it away in his sock drawer (which depressingly enough can sure use some new tube socks) so that when that time comes he will have money. This money is saved to be insurance against something bad in the future.

When we misuse the term investment we can make ourselves think that we are doing some sort of smart money thing for our future. While often the things people are doing are prudent, they do not make money. Having a solid handle on the difference between investment and insurance lets us better allocate our resources.

Thoughts?

Friday, February 5, 2010

quote of the day

"Another item that will never get any cheaper, go out of style, or take up too much space is magazines. While there are plenty of cheaply made Korean magazines flooding the market these days for everyday serious carry, nothing but the stock Glock magazines will do."
-Gabe Suarez

Thursday, January 14, 2010

Priorities, Random Thoughts.

I have been thinking a lot about prioritization lately. It is fine to say "pick up a dozen of these" or "you need that" but that is only half the picture. We have limited resources. Without even discussing what % of total household income to put towards preps we all have an amount that is going there. Some of us make more or are able/ willing to put more towards it but that is irrelevant. The issue is that we all have finite resources and lots of desires. Invariably we find ourselves choosing to purchase/ acquire/ learn/ do one thing over another.

Just because something is neat or would be useful does not mean it is the best way to spend your dollars. 

I have spoken about this before. I think proportionality is important. Having years worth of food and 100 rounds of ammo for your gun doesn't make sense. Having a ginormous safe full of guns but no money set aside for a rainy day doesn't make sense. Common sense stuff.

I also think when weighing apples and oranges (or food and shotgun shells or gold vs savings or whatever) it is important to consider what is more likely to affect your ability to survive a multitude of situations. Sometimes an apple is more important or a better value than the orange.

The thing that has helped me most in this area (still not perfect but I am getting better) is to plan in advance and be as dispassionate as possible. Planning far in advance (I planned prep purchases over $100 for the year) helps to take a big picture look at things. It is easier to be conceptual when you are not at the gun shop (this has been my over spent area and is for a lot of folks) or the radio shop or on amazon with a few bucks burning a whole in your pocket.

Wednesday, January 6, 2010

Cash, You Need Some. And I Do Mean ALL Of You

Every time the topic of cash comes up somebody writes a comment. They say something like "I don't keep cash, I buy beans and bullets" or "I stock barter items" or "I believe in tangibles". All of these people are wrong. They are not wrong because they choose to purchase beans and bullets or stock some barter items or are down with the whole tangible thing because all of that stuff is good to have. They are wrong because simply put, none of that stuff replaces cash. 

This is where someone else will say "After the dollar/ world collapses my beans and bullets/ barter items/ tangibles will be worth a super duper whole bunch and dollars will just be good for tinder and TP."

Both of these ideas are seriously wrong and here is why:

First unless our economy/ the dollar collapses entirely it is what people are going to accept as a means of exchange. If you look at what happens during significant local or regional disasters, people trade CASH for stuff. Sure there is some bartering I imagine but matter of fact if you go to the grocery store during a power outage they are not going to take silver dimes at 14X face value or want to dicker over the value of .22 shells. The credit card machines will not be working and it will be cash on the barrel head. Some stores will take checks but I would not want to plan on that. This is where someone says they have all the stuff they need for a power outage so they don't need any cash.

What if your house is damaged and you need to make emergency repairs? The local hardware store will be open even though the power is out or off and on. I would bet they are not going to accept silver dimes or .22 shells or one pint bottles of booze either. If they have the couple sheets of plywood you need (likely in a power outage where an errant tree limb went through a window but unlikely for a hurricane) you are going to need money to pay for them.

Maybe there is a disaster in your area and you need to relocate for a little while. You toss the BOB's in the family war wagon and the other essential stuff from your list and get driving. You have got some fuel stored (a good idea in general and essential in hurricane country) but a couple hours down the road you see a gas station with their lights on thanks to a generator and no line. Thinking it would be a good idea to stop and top off the tank you pull over. Your kids are excited because it is 105 degrees outside and the place might have ice cream. They won't be taking credit/ debit cards and a check from some guy from a long way away is not going to get a nice look. A sign that says Cash Only will probably be present. I doubt this guy is going to want silver one ounce rounds or 9mm ammo or pints of booze. You will need cash to leave with a full tank and an ice cream for everyone.

If you are in the South you will likely see a BBQ place about every 5 miles. In the long run these folks will have issues keeping meat cold or getting resupply but for a couple days a lot of them will be smoking hogs and selling those pulled pork sandwiches we all love. It would sure be nice to stop for a few minutes and have big old BBQ sandwiches instead of MRE's for lunch. You might be able to barter with these folks but they will definitely take cash. Also when you get to whatever your destination (that is unaffected by the disaster) it would sure be nice to get a place to sleep. Again it is entirely possible that the fragile complicated credit card system might not work because of problems with its networks and such. This sort of thing happens in normal times. Last I checked the Holiday Inn does not accept fractional gold coins or rifle ammo.

So I have made the case as clearly as possible that you need to have some cash. This brings us back to the "After the dollar/ world collapses my beans and bullets/ barter items/ tangibles will be worth a super duper whole bunch and dollars will just be good for tinder and TP" argument. This argument is terminally flawed for one reason. Look at all the possible emergency situations you could face. Depending on how specific you get there might be several or the sky is the limit. In how many of them will people be trading dollars for stuff? The answer is almost all of them. Except a currency collapse or a genuine full on Mad Max scenario your dollars will buy stuff. Also if you rank order the possible emergencies you will find that all the likely ones will find dollars very useful. Think about it, power outages, ice/ snow storms, earthquakes, tornadoes, riots/ civil unrest and hurricanes really cover all the likely scenarios. Preparing for likely scenarios before preparing for unlikely ones just makes good sense. In fact in the scenarios the people you need to deal with (gas station, grocery store, hotel/ motel, hardware store, etc) will not barter. The kid working the register at 711 doesn't have the authority to barter and neither does anyone you will interact with at Safeway or Home Depot. Also people who have the option to barter (small business owners, contractors, etc) might or might not be willing.

Of course dollars do not replace food, water, fuel, etc but you need them also. Personally I would start on cash on hand about when I said in this recent post which is pretty darn early in your preparedness efforts. As for how much cash to keep on hand I think $300 in mixed bills split about evenly between ones, fives, maybe some tens and twenties is a decent start. It could buy a few tanks of gas, a few meals and a place to sleep for a night or two if need be. By then you can probably figure out how to get to your bank account or sell some precious metals or get to a friends to crash or whatnot. If you are a hardcore Australian (edited to include I meant Austrian, suppose the Australian school would be giant cans of Fosters beer and boomerangs or something) School of Economics tangibles type or just have a pretty low income it might be an OK place to stop. Personally I like a months worth of cash expenses on hand in mixed bills. To me this is a good balance between having enough cash to get through a pretty decent emergency and the risk of keeping cash at home. Some folks like more cash on hand and in some cases even have their whole 3-12 month emergency fund on hand in cash. The amount of cash you should have at home could vary based on numerous factors including your family size, income, needs, location, other resources and the like. What is right for the Smith family might not be right for the Anderson family a street over. While the amount of cash you should have on hand could be debated I do not think there are decent arguments against having some cash on hand.

Thoughts?

Saturday, December 5, 2009

Tangibles, Investments and Priorities.

I read an interesting post over at Bonifaces Treatise today. My comment there got long enough to be a post here...... 
 
If I was getting into rifles right now and wanted to go the AK direction I might well go AK74 as the ammo is dirt cheap though they fail the common caliber test, which might change in a decade but who knows. However since I am not getting into rifles right now my desire to add another caliber which is comparable to one I already have is nil. Some day a nice probably Arsenal made AK would be cool but unless they substantially drop in price (insert laughter here) a cheap surplus type AK rifle isn't a desire I have.

As for gold I bought what is for me a good amount last month. Think the additional increase in price has gotten gold very close to if not above my personal threshold. Might get some more silver though. Still sort of thinking about it all. Then again ammo is important and I could use a few more cases of the stuff. A couple cases of rifle and a couple cases of pistol would go a long way toward finishing off my ammo buying which would be really nice. Maybe shifting a bit towards ammo for a few months will allow me to take care of that need and in the mean time just maybe the PM price bubble will burst.

This sort of parralels another discussion at Commander Zero's blog. Taking steps to fill your immediate and future firearms needs is probably prudent. Personally I seek to pick up some mags for weapons I have and intend to have. This is a place where having depth in firearms really helps. For example mags I will purchase for a future Glock 9mm will work in Glock 9mm's I own now.Worst case mags you don't have a gun for now could be good as an investment or a barter item.

For purchasing tangibles in the short/mid term I don't have a solid plan but here are some thoughts:
-I will purchase mags for some guns I intend to get at some point. I really don't want to get caught by some sort of anti gun legislation in an uncomfortable place.
-Ammo will be addressed. I am not in a bad place but a bit of this and some of that would sure be nice. The stuff lasts basically forever and is just plain good to have around.
-PM's will likely be decreased in priority at a minimum. Gold has gotten around what I consider a stupid price though silver isn't at totally insane prices. A few more one ounce silver rounds or some 90% dimes never hurt anyone. Of course buying at dips is good but sitting out of the market or having a smaller presence there for 6 months might not be a horrible idea. Maybe shifting a bit towards ammo for a few months will allow me to take care of that need and in the mean time just maybe the PM price bubble will burst.

I also have plenty of other plans which are more preparedness/ survivalism and less preparedness/ tangibles which will run parallel to all this.  Will speak about them as they develop.

Thoughts?

Friday, September 4, 2009

The Emergency Fund: A Complete Perspetive

Jason Cato recently commented "My emergency fundage plans are to have 1k in cash in case of 1 - 2 month bank holiday, 500 in silver for bartering, and 500 in gold in case I need to bribe some authority figure. After that I plan to save as much as possible in case of more mundane problems like layoffs." on my post which talked about silver and gold.

This got me to thinking that though I speak of the emergency fund in fairly generic terms on a regular basis it is always about one part or another. Here is my complete emergency fund plan.

1. Cash on hand: This money is physically stored in your home or a safe place that is readily accessible 24/7. I think a months cash expenses is a good reasonable number. If you have ample liquid resources and a good safe 2-3 months would not be a horrible idea. This money is for a banking holiday or a natural disaster (money still spends but credit cards don't) or a plain old common power outage. Also if somehow your banking gets completely messed up you have something of a safety net.

I personally keep this in mixed bills with the first hundred in ones, the second hundred in fives and most of the balance in 20's. I find 20's as the compromise between being small enough for regular purchases (change may not be readily available) and compact enough to easily store and carry around. For most of us this fat stack of ones and a wad of 20's will be enough. However if you are going to store more than 2k or so I would say have the first 1-2 thousand in smaller stuff (20 and smaller) with at least and the rest in hundreds.

IMO this is more important than any other component of your emergency fund and should be squared away before moving forward.

2. Savings: [I am talking mainly about money in the bank. If you are seriously into the whole tangible investments thing then just skip to number #3] This is your money for job layoffs, sudden major car repairs, medical bills, etc, etc. The old wisdom used to be 2-3 months income stored in an FDIC insured account.Some folks say that 6-12 months is necessary. I personally think that is a lot of money to have sitting and not working for you in some way or another.

A big benefit of this money being in the bank is that you can readily access it anywhere. Maybe your car breaks down halfway from a distant cousins house or you get stuck somewhere unexpectedly during travel. This money being able to be gotten to from anywhere is a real advantage.

As for how much this should be I think you need to look at your own situation. Depending on your job security, bills and such this number can vary dramatically. For me with a pretty secure job and minimal bills 3 months seems like a fine number. A guy who works a job with frequent layoffs or radical income swings needs to have a lot more lying around. I know a real estate agent who has sold precisely one house this year and it closed in early Jan, he is fine because when things are booming he saves. Another friend of mine works construction. He makes pretty darn good money when working and still lives like he makes $14 an hour. He was recently laid off for 6 months and aside from being really bored he was just fine.

3. Precious Metals: I think there are lots of different perspectives on this one. I look at them as a tangible non dollar denominated store of value and buy them in case something completely fucked up happens. I will probably never sell them and do not expect to 'make money' off of them. What to get is sort of up for debate but I like the money changers advice "Buy silver first, then gold. Buy small gold first, then large."

As for how much to
put into metals? We personally put $100 every month into metals. Often I throw some personal money in also. So for us we will just keep plugging along at a slow rate for the foreseeable future. This system works well for those with decent income but not a large lump sum sitting around. For the lump sum crowd I have heard it suggested that 10% of your liquid assets should be in precious metals and that sounds reasonable enough.

I think a complete emergency fund will have some cash on hand, a dedicated bank account with more money and some precious metals just in case it all goes to hell. The figures and amounts could be debated but I don't think many people would argue with those core principles.



Wednesday, July 8, 2009

Finances, Individual Responsability and Choices

In response to a couple of comments on a recent post. Bad things can certainly happen to anyone. No matter a persons job, income level, or other elements of their situation there can be a 'perfect storm' which will leave their financial situation completely fucked. The current economic situation (and past ones) has left many people in bad spots.

I however can not help but theorize that people with good skills/ incomes, relatively low debt and good habits of saving are probably doing better now then those without even if it is just relative. Having your 401k's value take a nose dive is a lot better then having 'your home' foreclosed on and living with the Mrs and your 3 kids in Grandma's spare room but it is still not a pretty picture. To this specific picture I have thought a lot. Unfortunately I have no helpful thoughts for those who are close to retirement age and just took a huge financial hit.

I do however have two thoughts for those between my age and 40ish.

1. As our recent relatively financial problems have shown, companies fail. This shows the benefit of having your money 'in the market' in a broader way such as index funds or mutual funds. While those can take a beating also they don't get killed by an individual company failing. If you want to do a stock club with friends or stumble into a great potential stock by all means throw some cash into it. The people who pick winners and losers have lots of money to play with and time to do research plus all the great connections still can have iffy results. It might be prudent to only have individual stocks as a portion of your 'money in the market'.

2. I heard somewhere that if you are going to need money inside of 10 years it should not be in the market. While I am sure the exact period of time could be debated (think I might have heard 5 years somewhere also) this principle makes a lot of sense. In any case I think any 'expert' worth their comfortable stylish office chair would say that the closer you get to needing your money the more it needs to be safe. At my age I can ride out a lot of up and down so the giant bag of pennies allocated for my retirement is mostly in stocks. Someone much over 40 is starting to run out of time for their portfolio to recover from a big hit.

3. This isn't really based on anything but is probably worth thinking about. Diversify, diversify, diversify. Stocks and investments are great. CD's and money market accounts are fine also. Having a nice little 5 acre place in the mountains to hunt or camp at is also great. A good stash of precious metals is a good thing. Maybe buying a couple firearms with cleaning kits, magazines and a few hundred rounds of ammo each could be a good way to hold value or even make a profit. I'm not so much trying to open the whole 'tangible investments' as I am saying to put your wealth into as many diverse areas as possible. This might not make you a millionaire but it might just help prevent you from becoming a hundredaire.

Oh yeah I am just some dude in his mid 20's who knows almost nothing about money. I have not made a bazillion dollars in real estate or stocks not do I think the above ideas will help you do that. It's your money so make your own choices but consider yourself disclaimed.

Thoughts?

Thursday, June 4, 2009

The Real Investment Debate

AK vs AR. Watch the video it is hilarious.

Oh yeah this merits a disclaimer. If you blindly put lots of your money into investment advice from me or a TV comedy clip you are an idiot and deserve whatever happens to you.

Monday, June 1, 2009

Buying Land Now

This came up in the comments section of a recent post. Instead of responding immediately I decided to mull it over a bit.

Yes, I plan on purchasing some land in a place we could potentially settle in the not that distant future. In terms of priority that falls after purchasing a home. Paying for a piece of land (cash or a note/ loan) we are not going to really use for years while renting a primary residence would make no sense to me. After we purchase a home a few acres will probably be the next significant investment.

In the area I am thinking of we could get 5 acres or so for a pretty reasonable price. Probably not a ready to build on site but not total junk land either. Depending on the exact location it could be useful as a camp site/ vacation place and a cache site.

Wednesday, May 20, 2009

Blah- Money In These Times

Between Kalifornia and China being constantly in my mind and some less than ideal news about our upcoming move I am kinda in a funk. Got stuff in my head but am having a hard time putting it onto the page.

Starting to be less and less certain on what sort of personal actions I can take to make the upcoming events have less of an impact on our standard of living. Unless I colossally mess up at work my job is secure; maybe not for ever but certainly for several years. That means employment is covered which probably puts us ahead of the curve.

I am not particularly sure what to do with our money. Not that we have or make a ton of it but the less you have the more important it is.

Right now we are putting 5% into my TSP account for retirement. I really like that it comes strait out of my check but don't like that my ability to control where it goes is relatively limited. Would another option (ROTH IRA, mutual fund) be better? I am not so concerned about the long term cash because it is wise to put it away (odds are way higher that I get old then that the world ends) and 3-4 decades is a lot of time for things to work themselves out.

We bank 10% of the remainder (going up to 13ish next paycheck) every payday. Right now that is going into savings/ emergency fund. In the not too distant future that will get capped off for the time being. I know after that our goals are to start saving for a new car and a home down payment.

Keeping our emergency fund (the non cash one) in savings in the bank makes the most sense to me. Can't really see a better option. If we need to get a plane ticket or replace a transmission tomorrow I don't want to be selling precious metals or whatever on ebay to get the cash. I feel pretty secure about this one unless things go all hyperinflation. If it looks like that is going to happen (not conceptually but in a week/ month) a good chunk of this cash will turn into silver and gold.

My main concern is that we are quickly going to start saving for an eventual home down payment. This process will probably take 5 years or so depending on exactly how much we can save monthly and how expensive homes are where we will be looking to buy. This money is going to be sitting around for long enough and be a big enough amount (especially in the last couple years) that things going screwy would be a real problem. I am not particularly comfortable with precious metals as a short term investment vehicle (a whole nother discussion itself) because they swing wildly. Also I would rather get shitfaced and play craps with it then put it into the market. At best I would like to have it grow and at worst I want to keep up with inflation. I would not need it to be totally liquid but then again that would have its advantages.

I am purchasing some tangibles. Precious metals are being purchased as a hedge against inflation and guns/ ammo are being purchased because well I like them. If I had more coin I would be buying land right now, alas I don't.

Suggestions? Ideas? Complaints?

Tuesday, December 23, 2008

quote of the day, brought to you by The Other Mike

"I buy gold/silver for two main reasons: As an inflation hedge, and as an emergency currency. If it happens to wildly appreciate, I'll be a happy camper. But, I DON'T look at it as an investment. In my eyes, buying any commodity as an investment is akin to gambling. Don't get me wrong: I like to gamble every now and again, but I call it that, not investing."
-The Other Mike

Generally I am not a huge fan of block quotes for the blog but every once in awhile something is just to good to let it waste away in the comments section. By hitting (IMHO) the good reasons for purchasing gold and its "investment" potential TOM gets a big hat tip from TSLRF.

Popular Posts