Well then consider me a cockroach.
So I will buy a little more gold, and then hold what I have. My goal was an ounce per family member, is the need to use it to get out of the country ever arose. SIlver, I am sure I have the cornered, and then some. I used my own perosnal method of determining insurance value for the PMs. I decided for every $500 in fixed interest debt, I would own one ounce of silver. Since I own two businesses, rental property and a personal mortgage, all with some debt, I feel lucky I got started with that almost two years ago before prices really took off.
Now the 5% rule would apply to any further investments based on net worth? Or on total assets under control?Im guessing net worth right now.
I’m also guessing that the “bears” are still right, even though the paper markets are making some serious down spikes in Asia right now.
I had written a reply earlier to your comments but I guess I slipped up in posting it so here goes again.
As far as me considering you a cockroach, FWIW, I’ll be skittering along right there beside you.;-) I hope you realize the comment was not meant to be denigrating to capitalists but to jokingly acknowledge their survivability right alongside that of the venerable coackroach. I’m an avowed capitalist myself. It’s not a perfect system but I prefer it to all the alternatives I’ve seen so far (including the Zeitgeist doctrine that seems to ignore basic human nature and spirituality). Whatever happens, I plan on surviving it just like the lowly roach (unless, of course, we get zapped by an asteroid in which case we can all kiss our collective a**** good bye).
I think the gold for each family member is a good idea but I’d want more than an ounce. In almost any scenario, how far would an ounce go? I don’t think too far. In so far as getting out of the country, obviously gold is much better than silver. To carry a decent amount of silver, you’d need a heavy duty motorized transportation system. It’s been commonly said that 1,000 ounces of gold will keep a person from ever going hungry. That’s 62.5 lbs., not an unreasonable burden for a single individual. Looking at the silver equivalent, I come up with 3,082 lbs. or a ton and a half! Not too many vehicles on the road could even handle that. Silver’s just too heavy and bulky for the amount you would need. I like some platinum and palladium just because they’re not as recognizable to the casual observer in terms of their value, they’re much less vulnerable to confiscation, they have industrial uses like silver, and they have the “value density” of gold. Diamonds are even more compact than gold, easier to hide on your person in such a manner as to avoid detection, and wouldn’t be picked up by a metal detector. The downside is they’re not as liquid and with high quality synthetic diamonds becoming more prevalent, they’re more vulnerable to market fluctuations. If I were planning on bugging out of the country, though I’d consider gold, PGMs, and diamonds and very little or no silver.
In so far as the silver covering your debt, that supposition would make me uncomfortable. Although I’m fairly risk tolerant, I’m extremely debt averse. I’ve had several businesses over the years and spent only $500 starting the first one and never went into debt with any of them. Of course, the businesses were based on intellectual rather than physical capital so by their very design, debt could fairly easily be avoided. I also still own a commercial real estate building but the only debt I carry is on my primary residence. Although I have assets in reserve to pay that off at any time, I have several reasons for carrying it, at least through the next few years.
For me, the 5% rule applies to liquid net worth (i.e. exclusive of businesses and real estate).
I’m not sure I understand your last statement since it sounds at variance with your apparent beliefs, if I understand you correctly. I’m still reasonably certain that the bulls are right and will most likely remain bullish on PMs through the 2012-2015 period (when I think things will be at their worst). This present correction is the one we were expecting after that rapid run-up but that never seemed to come (but obviously, finally did).