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What Should I Do? The Basics of Resilience (Part 7 – Protecting Wealth)

Tuesday, August 24, 2010, 6:13 PM

Note:  This article is part of a series on personal preparation to help you answer the question, "What should I do?"  Our goal is to provide a safe, rational, relatively comfortable experience for those who are just coming to the realization that it would be prudent to take precautionary steps against an uncertain future.  Those who have already taken these basic steps (and more) are invited to help us improve what is offered here by contributing comments, as this content is meant to be dynamic and improve over time.

Graduates of the Crash Course series emerge aware that, economically speaking, the next twenty years are going to be completely unlike the last twenty years.  This invariably leads to the question, "How do I prepare financially?"

We have entered some truly treacherous investing waters, where we must question everything and accept nothing, even (and especially) the base assumption that any given currency, be that the US dollar or euro or Yen, will retain its value.  Is a ‘double-dip’ recession coming?  Nobody knows for certain, but all the warning signs are there.  Our view is that it’s best to start thinking about preserving and protecting your wealth now, while you still have that opportunity.  The bottom line here is that you should not be taking your cues from what your neighbors seem to be doing, but instead being sure that your own house is in order.

There are no easy answers and no magic bullets.  But neither is there any need to take immediate or hasty action. Rather, I want you to view yourself as beginning a journey.  The time has come to put one foot in front of the other and take responsibility for your own financial future.  The ideas below are drawn from our more detailed guide to Taking Control of Your Personal Finances (Note: Access to this page requires free registration on our site).  As always, it is up to you to decide if you want to make use of the information offered here, or not.  We present these ideas for your consideration and as educational material.  We do not offer investment advice at PeakProsperity.com, and this material is not meant to be taken as such.

Here are a few basic ideas to get you started:

  1. Get out of personal debt.  This means paying down what you can and taking on absolutely no new debt if at all possible, especially if it is purely consumptive in nature (that is, it won’t increase your future cash flows).  During the Great Depression, debt was a killer.  During the 1990s and 2000s, credit (debt) advanced the living standards of many and became to be viewed as simply "something to manage."  But being in debt severely limits your options during good times, and it is a positive destroyer during down times.  Less tangibly, but just as important to us, being out of debt feels really, really good, as if a weight you didn’t know was there has been lifted.  During stressful times like these, removing a nagging source of worry has a value all its own, which is not to be underestimated.
  2. Get some inflation protection.  Nearly all governments, when faced with the massive liabilities and debts that those in the developed world currently face, have opted for the same solution:  Print money.  So we can be pretty certain that we'll see some quite solid inflation as we go forward over the next few years (decades?), especially as resource crimps arrive at the same time that the electronic money presses are working hard to conjure up an economic miracle.  But there is another worrisome potential source of inflation, and that is all the US debt held by foreign countries.  Trillions upon trillions of dollars of US debt are held by foreign concerns.  What would happen if all those claims got ‘submitted’ (i.e., bonds get dumped) over a short period of time?  My view is that the US dollar would collapse, triggering massive inflation in everything the US imports and would effectively ‘export’ inflation to the rest of the world.  That would include oil, gas, consumer electronics, clothing, and especially food.  So what is "inflation protection?"  It means holding non-paper-based assets.  Gold, silver, oil, grains, and base metals are a few examples.  My personal choice has been to hold gold and silver, but there are many other vehicles.  For those interested, I have prepared a short document that details the hows and whys of gold/silver purchasing.
  3. Diversify out of US dollars.  Many residents of European countries consider holding all of one's assets in a single currency and a single country to be a sign of madness.  Of course, Europe has a repetitive history of violently proving the validity of this viewpoint, while the US does not, but you may also want to consider how the truly wealthy in the US handle their affairs.  The financial managers for the very wealthy always recommend having assets in multiple currencies and multiple countries.  While it is simply not feasible for the average US citizen to hold offshore accounts, especially post-PATRIOT-Act, US citizens can easily hold foreign currencies (such as through everbank.com) as well as gold/silver (a.k.a. "the anti-dollars").  I also hold gold as a “currency hedge."  I personally do not hold too much in foreign currencies anymore – although this was a strong strategy of mine from 2003 to 2008 – because the almost daily interventions of various central banks in the currency markets has turned them into more of a casino than a fundamental play that we can assess on the basis of trade, interest rates, and other key variables.  Still, having a bit of diversification here can be useful and, if you have the opportunity to hold foreign bank accounts, those can offer an important buffer.
  4. Take control of your finances (and keep your holdings highly liquid).  This is outlined in the steps below.

First Step - Take Control

The very first step is for you to feel personally in control of your finances.  You are responsible for your finances.  Nobody else.  While I think it's perfectly okay to work with a trusted financial advisor or planner, that relationship still needs to be a partnership, and you need to get in the habit of authorizing and directing your investments, or else spending time thoroughly vetting someone who will.  I know this is a scary proposition for many people, but I've learned that the hardest step is the first one.  After you've moved a few things around, it gets easy (and fun).  The purpose behind this first step is to remove any barriers to action.

The main purpose of the steps below is to get your funds into the most liquid position they can be.  That is, we place a lot of value in being able to move and access funds quickly if the mood strikes us.  At times this may be because we are leery of the place we are holding the funds and want them someplace safer, and at other times we just want the freedom offered by being able to rapidly access and redirect our funds to other uses, should that seem the prudent thing to do.  In short, we place a premium on liquidity and safety – two qualities that could be real wealth-savers in a severe economic downturn.

  1. Write down the amounts of all of your different assets and liabilities.  This would include bank accounts, 401ks, annuities, pensions, Social Security, brokerage accounts, mortgages, real estate, etc.  GUARD THIS INFORMATION CAREFULLY.
  2. Record all the relevant information about where those assets are held.  Account numbers, phone numbers, contact info (if there's someone at the other end to call), routing numbers, website URLs, and any other information that would be necessary to either access or move the funds.  GUARD THIS INFORMATION CAREFULLY.
  3. Determine all the rules, processes, regulations, penalties (if any), and mechanisms that surround your ability to access or move the funds.  Understanding the rules surrounding (and often limiting) your access to your funds is usually an eye-opening experience.  Most are surprised to discover that “their” money is not accessible to them without jumping through a daunting array of hoops.  In order to determine what the rules even are, you will need to develop and pose some very specific questions to your account manager or institution.  Often it's a game of "you can get the right information only if you ask the right question."  Her are some sample questions:
    1. “What are the steps I need to take if I want to move money out of this account?”  Be sure to find out whether the rules change if the money is being transferred within or outside of the managing institution.  Also take careful note of the forms required.  Some mandate that a physical signature be on file, which means you are tied to the mail or other form of physical delivery.  If these exist, get them on file even if you have no intention of moving the money at all.  You may want to move it later on; having this step cleared up beforehand can be a real time saver.  Also note that joint accounts usually require two signatures and sometimes two separate forms.
    2. “How fast could I get this money into an account at my local bank?”  Be sure to understand the various mechanisms and thoroughly test out the one you want to use.  For example, wiring money may have different rules, and require different forms to be filled out, so compare this option to others, such as having the funds moved via EFT or sent in check form.  Once you think you have all the right forms in place, go ahead and move a tiny amount.  That’s when the rubber meets the road.  In some cases, there are redemption restrictions in place that limit your ability to liquidate holdings to anywhere from the close of business that same day to up to nearly a decade (in the case of some annuities).
    3. “What penalties, fees, surcharges, commissions, or other imposed costs will be associated with moving these funds?”  If at all possible, get these in writing before making a move.   It’s astonishing how many of these are layered on top of even the most routine transactions. fBe especially leery of any fees that are not fixed but vary with the size of the transaction.  Find out if there are any ways to avoid them.  Sometimes there are, and this is an example of an answer they will not reveal unless you ask the right question.
    4. “Have I missed anything, any step, form, signature or other requirement, either internal to your organization or regulatory in nature, that is needed in order for me to move this money immediately?”  You won’t know unless you ask!
  4. Take action:  Actually move some funds from one of your accounts to another.  This step will break the 'inertia' that most of us experience.
  5. Link up all of your main accounts via EFT and practice moving funds among them.  Unless you practice, you won't know how long it takes or what sorts of wrinkles exist.  You should also check to see if you can initiate a transfer electronically, by phone, and in person (assuming you have a branch office nearby).   In a crisis or emergency, having the ability to rapidly move funds out of one institution to another could be a real wealth saver.  All of my accounts are so linked and tested.

Once you are comfortable that you know what you've got, where it's located, how it's distributed, and the rules and regulations governing access, then you’ll be in a better position to react to a variety of circumstances/scenarios and take action.  These steps are the exact ones that I took in my process of becoming financially self-dependent, and I swear by them.

Second Step – Develop Your Game Plan

The next step is to determine what scenarios you think are most likely to play out in the future and their likely impact on your investments.  Many folks don’t feel they have the expertise to do this on their own.  If you’re one of these people, finding a good financial advisor if you don’t already have one, is an important next step.

A good financial advisor will take the time to learn about your financial background and goals in depth, as well as get to know you personally, and tailor a customized investing plan accordingly.  We recommend working with advisors on a "percent of assets under management" basis – steer clear of commission-based advisors, as their incentive structure can be at odds with your financial interests.  If you don’t know where to start looking for a financial advisor, referrals from family and close colleagues are a good way to start, as are these resources provided by the Certified Financial Planner Board of Standards.  (While we don’t currently connect investors with individual investment advisors on this site, we are exploring how we might do so in a valuable way for our members.  If you’re an interested investment advisor, or have one you work with that you would highly recommend, please contact us

You then need to determine which investing horizons to concern yourself with.  I use three: near, middle, and long-term.  Each has its own body of information to consider and digest.  Here’s my best estimation of the events that will likely characterize each:

  • 0-2 years
    • ongoing housing bust
    • double-dip recession (bad for stocks)
    • growing energy disruptions (e.g., BP Deepwater)
  • 2-4 years
    • Energy demand/supply crossover
    • Boomers begin retiring
    • Growing pension issues
  • 4-10 years
    • Government insolvency
    • Peak Oil/other resources
    • Geopolitical conflict/war

I recommend that you create a similar chart based on your own assessment of the most probable outcomes the future holds and think about their implications.  Start with the nearest horizon, and ask yourself or your trusted financial advisor a few basic questions, such as:

  1. Are my assets well-diversified with respect to asset classes?
  2. What percentage of my wealth is denominated in a single currency?  Am I hedged in any way in case that currency begins to weaken substantially?
  3. What risks do my particular holdings face in another recession?  In a depression?
  4. What about during an event like an outbreak of hostilities with Iran?
  5. What sources do you (or your advisor) use to keep informed?  Have you watched the Crash Course?  What do you think of its thesis and outlook?  How should our portfolio change if/as the predictions it makes (increasing oil cost/scarcity, money printing, slow/negative economic growth) come to pass?
  6. How liquid are my investments?  How quickly can I liquidate, move, and access my holdings?

Third Step - Take Action

This is where you begin to get comfortable making decisions and taking action.  I recognize that this is typically the hardest part for people, and it was for me as well.

Buying Gold & Silver

It’s no secret that I’m a big fan of owning precious metals.  Why?  Because it provides you with the most direct way to protect your wealth from paper money devaluation with no counterparty risk.  Gold is the only financial asset I know of that is not simultaneously somebody else’s liability.  That makes it rather unique.  I think everyone who can should have at least some exposure in their portfolio to gold and silver.

There are many ways to invest in gold and silver, but for the individual who is just starting out, we highly recommend beginning by purchasing at least a few ounces of physical bullion.

Most of us are so unfamiliar with buying physical coins or bars of precious metal as an investment that it feels somewhat alien at first.  Buying my first lot of gold was both exhilarating and a bit unnerving, and it almost felt as if I were 'doing something wrong' (like a kid sneaking candy, or shoplifting, perhaps).  That’s why just getting started – buying your first few ounces – is the most important step.  After you’ve done it once, it gets a lot easier psychologically.

We advise a 2/3 gold, 1/3 silver allocation.  Gold provides the monetary protection against a systemic financial breakdown, while silver is a hedge towards a more normal future.  Silver's main value is as an industrial metal, and it will do extremely well post-crisis, due to scarcity issues and the increased expense of getting it out of the ground.  For me, silver is a long-term play, possibly lasting decades and possibly involving transference to grandchildren who have not even been born).

For gold, we recommend the American Gold Eagles and Canadian Maple Leaf coins.  For silver, we recommend starting with pre-1964, 90% silver U.S. coin bags (they come in varying sizes to accommodate your budget).

For buying physical gold & silver, we recommend:

  • APMEX.com
    • Quick, easy, 24/7 online purchasing (US & Canada)
    • High marks from the PeakProsperity.com community
    • A+ rating from the Better Business Bureau
    • Attractive combination of price, selection, customer service, and security
  • Colorado Gold
    • Phone ordering (US only)
      • Mention that you’re a referral from PeakProsperity.com
    • High marks from the PeakProsperity.com community for excellent customer service
    • A+ rating from the Better Business Bureau
  • Local coin shops
    • Transactions can often be anonymous
    • No minimum purchase requirements or shipping fees (although sales taxes may apply below certain amounts – commonly $1,500)

For investors with substantial wealth to protect, we also recommend:

  • Anglo Far East
    • Extremely high-touch, white-glove service – 24/7
    • Option to take physical delivery at any time, anywhere in the world
  • BullionVault.com
    • Very low purchase premiums to spot
    • Can buy and sell in US $, Euros, and Pounds Sterling (no currency conversion costs)
    • Allocated bullion held at low storage fees
    • Choice of storage location: New York, London, Zurich

We have a lot more to say in our guide to Buying Gold and Silver.  We consider it a must-read, especially if you’re ultimately planning to invest a substantial portion of your wealth in precious metals.

Allocating Your Other Assets

Now it’s time to invest your remaining wealth according to your outlook for the future.  As you begin, here are some broader questions you might ask yourself (or your financial advisor):

  1. Investing and horizons:  Is there a way to navigate both the near-term and long-term landscapes with a single investment stance?  For me, there’s one no-brainer in this category, and that’s making energy improvements to your home.  Solar hot water can offer a better than 10% return, even without an increase in energy costs.  Insulating can offer a payback time of only a few years.   In today’s world of 0% interest rates on saved money, the returns offered by energy improvements can be sound investments under any circumstance, but they become fabulous investments in a world of rising energy costs.
  2. How do I stay informed?  There are so many possible things to focus on.  How do I filter and condense it all?  What do I keep my eye upon?
  3. What are the key warning signs I should watch, no matter what?  My list includes the dollar, bonds, stocks, oil, and gold.  I figure that any major shifts will be signaled in these markets well before anything is announced on TV or in the newspapers.  The Money & Markets section of our site provides updated data throughout the day on the most common markers I think people should follow.  You should consider picking a couple of things to begin keeping an eye on, based on your investment allocations. For example, if you happened to be invested largely in cash and bonds, you'd want to keep a careful eye on the US dollar, because any weakness there will impact both of your holdings.  If the dollar suddenly started to weaken significantly, and I held cash and bonds, I would move those assets into gold as fast as I possibly could.

Your asset allocation strategy should be based according to the probabilities that you (and your advisor, if you have one) assign to major trends.  For example, if you believe, as I do, that inflation and declining energy reserves are really two of the main stories for the longer-term future, then here are some areas to begin looking into:

  1. Your resilience:  The first investment that you should make is in increasing your resilience.  For instance, in case the US attacks Iran and the Strait of Hormuz becomes impassable (a reasonable scenario in the current political climate), you'll want to consider all the possible impacts and shortages that could result from a lack of oil.  What would you do if a sudden shock made basic supplies temporarily unavailable or unaffordable?  Have you done all that you can around your home to minimize your vulnerability?  Our What Should I Do? The Basics of Resilience series is designed to help you identify the non-financial investments that you should seriously consider making in preparation for such developments.
  2. Energy:  My favorites are oil and natural gas producers that have significant reserves in North America.
  3. Treasury Bills ("T-Bills"):  I like these because you can easily move in and out of them (they are very liquid) and they come in very short maturities such as 4-week, 3-month, and 6-month.  I place a high value on being able to move rapidly out of any given investment, and these fit that bill.  Two ways to participate here are with TreasuryDirect and a Treasury-only money market fund.  In every case, I am referring to short-term bills only, not longer-term notes and bonds.
  4. Gold and Silver:  (For my thoughts on this topic, see the reasons described in ‘Buying Gold & Silver,’ above.)
  5. Treasury Inflation Protected Securities (TIPS):  These pay you a percentage premium over the official government inflation rate (the CPI), and this is an 'okay' way to go if you do not want to handle or think about your investments for long periods.  I am not crazy about them, because I think the inflation rate is vastly understated, but that is simply my opinion.

Conclusion

My views on the matter have always been clear – protecting wealth is Job Number One.  There are ample warning signs that the various governmental stimulus programs in the developed world are not working and that the risk of the recession returning to our official statistics (to differentiate the point that I think it never left Main Street) is very, very high.  Now is not the time to play catch-up with your portfolio; now is the time to favor caution over greed and prudence over risk.

As I currently see it, the chance of a 10% advance in the stock market is about the same as a 30% decline. Those are bad odds if you are holding stocks.  Additionally, I think that municipalities and corporate bonds are vastly overrated by the (still, for some reason, in-business) ratings agencies and that a renewed recession will begin to expose the rot there as well.

However, I don’t have a crystal ball, and I don't know if deflation or inflation is going to win out over the near term.  My personal view happens to favor deflation followed by inflation, but I believe inflation will be more a function of loss of faith in fiat currencies rather than the usual recovery-induced return of the banking credit machine.

In the absence of a working crystal ball, I continue to hedge my bets 30%/70% for a deflation/inflation outcome and therefore favor cash to gold/silver in the same 30/70 ratio.  But that happens to be my personal stance, and yours should be tailored to reflect your own situation and personal assessment of the markets and our chances for a lasting recovery.  As yet, I do not see one on the horizon, because our fiscal and monetary authorities decided to try and sustain the unsustainable, rather than let the chips fall where they may.


The guidance above is provided to empower you to assume command of your own financial destiny.  That said, I do offer personal and business consulting services for a limited number of people whom I think I can help.  These can take the form of a one-on-one phone session or a visit to your company to help motivate and align your key employees for the challenges of the coming times.  If this is of interest to you and you'd like to learn more or schedule a consultation, click here.  


If you have not yet seen the other articles in this series on resilience, you can find them here:


What Should I Do?: The Basics of Resilience (Part 8 – Community)


    What Should I Do?: The Basics of Resilience (Part 9 – Your Next Steps)

    Full disclosure: In this and future articles, we will recommend specific products and services that we have found to be especially suitable and relevant. If you click on a link to purchase one of the recommended products or services, PeakProsperity.com may receive a small commission. This will not impact the price you pay for those items -- you can locate and buy these products elsewhere if you wish -- but with the funds we receive as the result of these transactions, we can continue to expand our other community offerings, produce the next wave of videos, and bolster our outreach and educational efforts. You win by saving time and having easy access to our well-researched product recommendations, and we win by receiving your support and encouragement to continue doing what we do.

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    67 Comments

    cstone's picture
    cstone
    Status: Member (Offline)
    Joined: Nov 12 2010
    Posts: 4
    Re: Preserving Wealth--BullionVault

    Has anyone visited BullionVault and actually seen the gold in their vaults? I've visited their website and like the concept, but I'm a little nervous. Please share your experience. Thanks. CS

    jackgoldman's picture
    jackgoldman
    Status: Member (Offline)
    Joined: Jan 2 2011
    Posts: 10
    Re: What Should I Do? The Basics of Resilience (Part 7 – ...

    Regarding debt. If you borrow a million dollars to buy ten million in assets, good move. If you borrow ten thousand dollars to buy a boat that is going to be worth $5,000 or a car, or a toy, bad move. Even houses are of questionable value. I own three. They have dropped in value a lot but I bought long ago. Borrowing money to buy things that have monthly fees (property insurance, gasoline, car insurance, property taxes) is all questionable. Debt drives prices up. Holding debt back drives prices down. 

    I have an off the grid cabin with 60watt solar panel. Costco sells this system for $300. What a deal. What a difference. No need for solar hot water if you can make a fire. Clothes can be washed in a bucket if you have soap and hot water, then line dry. Also, who needs clean clothes in a crisis, just wear them more and wash less. We are so used to being spoiled with all the debt to buy luxury items. Our real human needs are so simple.

    My original wilderness off the grid cabin was only a 10'x10' cabin with a loft. It worked fine and was easy to heat. I heated it with a 7,000 btu Coleman propane RV heater I got for free. Conservation is the key. Propane for cooking is a huge big deal. Wood for heating water is best. Don't waste propane for heating large amounts of water. Wood is hot. For small heat like cooking, use propane. Big heat, use wood. An outside wood stove is cheap and easy for heating water or even cooking in a pinch. 

    Chris' advice is right on. I have a Big Berkey water filter. It works great. I store my grains and have fun experimenting with food. Salsa can do a lot for bland recipes. The Mormon Latter Day Saints have some excellent long lasting foods and a cannery near me in Apple Valley MN. The public can use this facility and buy their grains and things that keep for 30 years like beans, wheat, powdered milk. They have it all figured out, stored in one gallon cans. The prices are very fair. Keep it simple. Living off the grid is a fascinating fun subject.  Yuppie college specialized bank financed lifestyles are expensive. Our daughter just graduated from college. I don't think it was worth the $160,000. It was probably a waste but the yuppies and elites require this for entry into their private club. A life of basics is a better deal. 

    Gold doubled four times in the 1970's. I am expecting it to double four times again. It's over half way there going from $250 to $1,400 already. It's a 20 year cycle. Read Adam Hamilton, The Century of the Dow. It's on line. Watch the Dow Gold ratio. One ounce of gold bought the Dow in 1980. It was 44 ounces of gold to buy the Dow in 1999. Now it is ten to one on the way to one to one. I expect gold to peak around $4,000 to $5,000 and ounce meeting the Dow at that price. I could be wrong. Do your own homework. What a great time to be alive. I can't believe all the excellent off the grid products, including off the grid phones. We can live like Kings off the grid. Wow. These are the good old days. Protect yourself. Also, have a lot of fun. 

    Hobbyinhouston's picture
    Hobbyinhouston
    Status: Member (Offline)
    Joined: Jan 16 2011
    Posts: 1
    Re: What Should I Do? The Basics of Resilience (Part 7 – ...

    I am so happy i found this site. Also, a little sad to think there are a lot of people that are thinking along similar lines as me. I am glad that many are more advanced in their thinking than i as it makes the task of preparing easier.

    I have collected silver coins for many years. I like the way the look and feel.I have gold coins as well. Currently i live out of the country and only keep several oz of gold with me, but my parents and my stash are in the U.S.A. They are getting old and i worry about them.

    I worry that their nest egg will be wiped out when they need it most, so i keep a lot of Silver with them. They have camping equipment and generators, but that is only good for 3 weeks. So i guess i need to make sure they have some more basics. Solar panels and water purification as well as a shallow well. Good news is their community is very tight with a lot of land and big gardens. For years i have refused to give financial advise to my parents, because i would feel terrible if it went the wrong way. Now i am worried if they do not move some of their assets into metals it would be bad for them.

    So the problem is, which is better for them to start purchasing, Gold or silver. Silver is historically cheap compared to gold, but it has run up faster this year than gold. Also, I have been wondering about the value of silver, and where it might go. I understand gold, but silver is a little different animal. Because it is a heavily used material in electronics and industry, what will happen to the price when the industrial demand drops, because no one buys the products. Will there be sufficient demand for it to be used as currency to maintain is store of value?

    Any input is appreciated. I will make sure my parents watch the crash course and give it to their friends and neighbors.

    jaiminjethwa's picture
    jaiminjethwa
    Status: Member (Offline)
    Joined: Oct 30 2008
    Posts: 1
    Re: What Should I Do? The Basics of Resilience (Part 7 – ...

    Has anyone used GoldCore.com? They look toi have a good solution but being at a distance from the physical asset is the only concern. Any thoughts?

    xkguy's picture
    xkguy
    Status: Bronze Member (Offline)
    Joined: Jan 13 2011
    Posts: 46
    Should we demand the U S default on it's currency?

    I read a lot of doom and gloom threads. I subscribe to several investment letters. Every one, without exception, believes we are unable to pay our debt as a nation. Only Obama has a budget that projects a non default outcome but that requires a good deal of remarkable good fortune for the economy (as in never before seen growth) and almost a belief in unicorns. I wonder if we should not consider what everyone of my sources (without exception) says will not be done: namely default, declare to dollar to be worth less. This has been done by smaller countries but never to my knowledge by the reserve currency. 

    I realize this would be huge but since no one has been able to produce a real plan to pull us out of our debt spiral why not explore the options. Would a controlled default not be superior in outcome for most Americans than the deflationary/hyperinflationary scenario we now face? I am just asking.

    pennypincher1's picture
    pennypincher1
    Status: Member (Offline)
    Joined: Apr 30 2011
    Posts: 1
    re. large mortgage on paid-for house

    Well, is the point to have cash out of the house?  You'd end up having to pay all this interest on the money you took, plus closing costs.  I don't see the benefit unless you've got some investment in mind that will beat your mortgage interest and the closing costs.  If that's your residence, that's really betting the farm on something so you better be sure.

    It would make sense if you were going to use the money to pay off credit cards.  Just rip them up after and don't use them again.

    If the point is to make it so the house is less of an apparent target with respect to avoiding lawsuit-happy people who comb public records for people with equity to target, you could form an anonymous LLC in New Mexico and mortgage your own house to your own LLC. But only bother with that if your house is worth a lot. Probably the paperwork and taxes you will have to file will make it a headache, maybe more headache than it's worth.

    If your profession makes you likely to incur lawsuits (construction contractor, doctor, etc.) then deed the house to your spouse, or into an LLC or land trust.  Just get it out of your name but still control it.

    avocadotoast's picture
    avocadotoast
    Status: Member (Offline)
    Joined: Jun 30 2011
    Posts: 5
    what about apartment dwellers?!

    This is all fine and dandy if you can afford to invest in your home. We rent. How can we possibly create water, food storage, solar, wells, etc. living in a small apt.? Your advice seems to be only for those with money. I don't understand if you are so concerned about helping your community, how can you leave out advise for those that don't have money to buy land, stock-up and create a self-sufficient world on their own plot . Now I really am feeling panicked. It is great living in rural MA, surrounded by farmers...working on your property. Geez.

    Johnny Oxygen's picture
    Johnny Oxygen
    Status: Diamond Member (Offline)
    Joined: Sep 9 2009
    Posts: 1441
    avocadotoast wrote: This is

    avocadotoast wrote:

    This is all fine and dandy if you can afford to invest in your home. We rent. How can we possibly create water, food storage, solar, wells, etc. living in a small apt.? Your advice seems to be only for those with money. I don't understand if you are so concerned about helping your community, how can you leave out advise for those that don't have money to buy land, stock-up and create a self-sufficient world on their own plot . Now I really am feeling panicked. It is great living in rural MA, surrounded by farmers...working on your property. Geez.

    Hi advocadotoast

    Welcome to CM!

    This was just discussed. Here is the link:

    http://www.peakprosperity.com/forum/what-renters-storms-come/59733

    Dogs_In_A_Pile's picture
    Dogs_In_A_Pile
    Status: Martenson Brigade Member (Offline)
    Joined: Jan 4 2009
    Posts: 2491
    Welcome

    avocadotoast wrote:

    This is all fine and dandy if you can afford to invest in your home. We rent. How can we possibly create water, food storage, solar, wells, etc. living in a small apt.? Your advice seems to be only for those with money. I don't understand if you are so concerned about helping your community, how can you leave out advise for those that don't have money to buy land, stock-up and create a self-sufficient world on their own plot . Now I really am feeling panicked. It is great living in rural MA, surrounded by farmers...working on your property. Geez.

    avocado -

    First off, welcome to CM.com.  You will find there is a load of useful information here and many people who are planning on weathering the storm "in place" - meaning in the homes they are living in - and not heading off to some idyllic plot of land in the mountains.

    Next suggestion - take a deep breath and realize that you have taken the most important and challenging first step, that of realizing that something is going on out there and that you need to add resiliency to your life to better deal with it.

    You are also among virtual friends so don't  get too frustrated before you ask for help.

    I would suggest you take the Self Assessment that can be found on the "Take Action" tab at the top of the page.  Once you work through that, I think you will have the specifics of your situation framed in a manner that you can then plan for.

    And finally, there is a ton of info here so don't get overwhelemed and feel like you need to go through it all today.  Take it in chunks.

    http://www.peakprosperity.com/forum/consolidated-list-links-existing-preparation-threads/27912

    As the late, great San Francisco prophet Jerry Garcia once said, "You just gotta poke around."

    avocadotoast's picture
    avocadotoast
    Status: Member (Offline)
    Joined: Jun 30 2011
    Posts: 5
    Thank you Johnny Oxygen and

    Thank you Johnny Oxygen and Dogs in a Pile! Smile

    JoanneWong's picture
    JoanneWong
    Status: Member (Offline)
    Joined: Dec 14 2011
    Posts: 1
    Gold price

    Why is gold price going down continuously these few days?

    tricky rick's picture
    tricky rick
    Status: Bronze Member (Offline)
    Joined: Dec 9 2011
    Posts: 79
    why is gold going down/up/sideways

    JoanneWong:  the price you see is for PAPER gold and silver.  Hope you realize the difference.  Paper price is established and controlled by the banks and Feds (the bad guys)

    that is NOT the value of the gold and silver that the wise have bought and own (to be determined at a later date).

    Imagine this:  The electricity goes out!  YIKES!  no computer, no google, no facebook!!!  NOW take a look around.  How much gold and silver do you have?  If you can't touch it do you really own it?  Right... you agree with that?  James Turk has a fanfastic business (among many others) but I have a hard time feelin completely comfortable having money half a world away with my ONLY connection via the computer. AND... IMO bank holidays will be accompanied by INTERNET holidays.

    You hear it alot and it's true... come barter time, physical gold and silver will be more valuable than an old print out of your stock holdings (cause who prints out their accounts regularly??)

    A TIP I use that helps me sleep better at night.  90% silver (junk) is dimes, quartesr, half and full dollars minted before 1964.  The least expensive form of accumulating silver, it maybe the easiest to use come a time.  A single 'junk' dime right now is equivalent to A GALLON OF GAS.  Makes more sense than a $35 to $50 silver ounce or $1700 oz of gold!   "Can I have change for this $1700 ounce of gold please?"   ha ha ha

    I cruise the sights a lot and am amazed that 90% silver just doesn't get enough airplay.  oh, fyi, these coins were minted with 90% silver in then... hence the name.

    consider this a PUBLIC SERVICE ANNOUNCEMENT

    usd.aud's picture
    usd.aud
    Status: Member (Offline)
    Joined: Feb 27 2012
    Posts: 1
    USD AUD

    USD AUD

    AUD/USD's rally extended further to as high as 1.0687 last week. Further rise is expected with 1.0444 support intact and AUD/USD should target 1.0752 next. Break there will be the first sign of up trend resumption and should target a test on 1.1079 high. However, AUD/USD is still bounded in range of 0.9387/1.1079. Break of 1.0525 support will argue that rebound from 0.9663 is finished and another falling leg inside the consolidation pattern could have started for the lower side of the range.

    goldcoinnet's picture
    goldcoinnet
    Status: Member (Offline)
    Joined: May 21 2013
    Posts: 5
    Thank you for this excellent

    Thank you for this excellent post.

    http://www.goldcoin.net/gold_coin_ira

    certifiedgoldexchangecom's picture
    certifiedgoldex...
    Status: Member (Offline)
    Joined: Jun 21 2013
    Posts: 2
    Excellent post, thank you for

    Excellent post, thank you for these tips and valuable information.

    Ryan

    http://www.certifiedgoldexchange.com

    DisappearingCulture's picture
    DisappearingCulture
    Status: Member (Offline)
    Joined: Jun 21 2014
    Posts: 12
    I suggest updating this editorial/essay

    Since this was written over four years ago, and some of it involves future prognostication, it would be useful to update the prognosis in my opinion [update the article].

    An example of this is the statement from above: "As I currently see it, the chance of a 10% advance in the stock market is about the same as a 30% decline. Those are bad odds if you are holding stocks."

    We have since learned the stock market has advance A LOT since 2010. That doesn't make it a good investment in the fall of 2014 of course. But it makes a 2010 opinion quite obsolete.

    Adam Taggart's picture
    Adam Taggart
    Status: Peak Prosperity Co-founder (Online)
    Joined: May 26 2009
    Posts: 1883
    Agreed

    DC -

    Updating the entire What Should I Do? guide is a top priority for Q4. We plan to launch the updated, expanded version before year's end.

    There's a lot to accomplish between now & then, but we're on it :)

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