I don’t really get the appeal of gold to gold bugs, people who obsess over gold and say it’s an essential commodity to have in one’s portfolio.🤑
Gold is shiny and popular for use by rich people for showy jewelry, 💎 it’s uses in the real economy are quite limited — it’s fantastic conductor and has some other uses in chemistry — but other then that is has no real value. Gold in certain electronics is an important use, but the gold typically used is only a few atoms thick and only a small portion of the gold mined and consumed every year. Gold might not be entirely without use, but most of it’s practical uses are in margin, a small part of production each year.📿
There is some value in investing in commodities or energy businesses as a hedge against inflation, especially energy-driven inflation like what we saw during the 1970s with the energy-crisis. That said, commodities are always risky, as you don’t know if products will be substituted for new products. Coal, for example, has seen a long decline in recent years as natural gas and renewable have replaced it as a cheaper source of energy.🛢 Energy companies, especially in broader form, are less risky then raw commodities, as they enjoy a larger degree of flexibility in the sources of energy they sell. Electricity companies will continue to have a dominate role no matter what their generation is fueled by, coal and oil companies have certain talents and land ownership that will make them leaders even if we move towards geothermal, wind and solar.
Most precious metals aren’t really the precious, even if they are rare.🐲 I am more interested in the real economy, something you can point to actual economic growth, rather then some dubious scam pushed by certain unscrupulous business people.
Losing out on my pension and the value of time and money 💵
The other day I was reminded of the high cost to my pension of taking a year away from my state job to persue other non state work duties. That said, between my greater experiences and additional pay doing alternative activities it really came out to a wash after doing the math. It really wasn’t a year lost.
And I’m less concerned about my state pension than many other people. The 20 year mark and the jump from 1.6% to 2% per year of service is nice but it’s also kind of icing on the cake. I’ve been maxing out my Roth IRA and the 458 plan to the tune of around $25k for a few years now. I’ve also been aggressively investing and saving well over a thousand a month.
The truth is that I plan a fairly frugal semi retirement when those days come in around 15 years. I want to have my homestead, which I plan to pay for with cash in a low tax state and be able to avoid many of those costs of a typical suburbanite home owner. I want to live in a small, off grid cabin without a lot of furniture and appliances, produce a lot of my energy on site, raise and harvest a lot of my own food, heat with wood, shun expensive internet and television services, burn – compost – scrap my trash rather than paying for expensive landfill hauling and dumping services.
I don’t expect to be fully retired until 65 but I want to own land well before then – and will need a job with health insurance. But if I build up enough assets and trim my budget down enough, the actual income won’t be as big of a deal. Farm tractors, implements and land are expensive but the ordinary throw away suburbanite life is more expensive. Making a life at least partially off the land with livestock and a garden.
I was looking at money market accounts after reading this personal finance book I’m reading promoting them for short term savings. 🏦
With current low interest rates there really is no real difference – the FDIC insured online only savings account I have is 0.15% below that of most of the money market accounts out there and I’d have to deal with another bank. Online only savings accounts aren’t far behind money market accounts – it’s not like the 1970s. My grandmother thought money market accounts were the best thing back in the day, maybe they were compared to CDs at the her local bank.
That said, I do seriously need to think about buying more bonds as I’m getting older and with recent market growth too heavily in the stock market. I’ve been watching the stock side of things creep up disproportionately as stocks grow so much faster over the past few years compared to everything else – despite my efforts to try to keep things balanced. I have too much on both extremes and not nearly enough in the happy middle known as bonds.
With the market probably heading straight for the crapper, now isn’t probably the best time to buy bonds but I’m not planning to sell stocks but going forward I’m leaning towards getting more bond funds during routine buys and maybe moving some money out savings towards individual bonds. I can’t imagine that a CD or savings account with such low interest rates would out preform bonds over the medium term and I have in excess of what I need for a rainy day in savings.
Life was so much easier when I started out and interest rates were around 5%. But alas the fed is holding down rates to stimulate the economy.
At the end of the day I don’t think much about money, but I do think about the mud and manure of farm life, homesteading, having my own land, more guns and toys and the off grid property. I don’t want to have to work my job downtown and live in my crappy, rundown little apartment in the city forever.
I do automatic savings every paycheck. Have done it for years – about half for retirement and half in more mid-term and short-term investments. I don’t really care money alone, for me it’s a means to that off-grid home and farm, my own land where I can have whatever guns I want and burn barrels for trash and a wood stove. Produce my own electricity with solar. Compost and feed waste. Land that is my own, that I can manage for ecological diversity, hunting and trapping, livestock like pigs and goats for food. And that’s a vision that gets me high with a little dopamine hot every time I get that notice in the email.
Most people wouldn’t attempt a marathon or a climb up Mount Everest without first working through some less audacious objectives. And yet there are countless examples of ambitious goals—new businesses, academic degrees, career changes, athletic feats—that were abandoned because they appeared too daunting in scope. In this episode of Choiceology with Katy Milkman, we look at a simple strategy that can make your biggest goals more manageable. Shannon Miller is one of the most decorated athletes in the history of gymnastics. She is a seven-time Olympic medalist, and two-time inductee into the US Olympic Hall of Fame. While her ambitions as a young gymnast included competing at national and international events, she learned early on that achieving those lofty goals would require many small steps along the way. You’ll hear how Shannon Miller’s approach to goals led her to the pinnacle of her sport, and also helped her through a devastating illness. You can read more about Shannon Miller’s challenges and triumphs in her memoir, It’s Not About Perfect: Competing for my Country and Fighting for My Life. Next, Hal Hershfield joins Katy to explore how breaking your savings goals into smaller amounts and shorter intervals can help you overcome certain psychological hurdles. He also discusses scenarios where smaller monetary increments may not actually be in your best interest. Hal Hershfield is an Associate Professor of Marketing, Behavioral Decision Making, and Psychology at UCLA’s Anderson School of Management.
Investing is the most powerful way that we can save for retirement, college for our children and similar long-term goals. But if you’re just getting started it can be hard to separate the good advice from the bad.
In this episode, NPR Life Kit host Chris Arnold offers up a few tips for those who are just entering the world of investing.
I am getting close to a net worth of $500k which I should reach by the end of the year if the markets don’t completely crap out before the end of the year. It’s almost all money I’ve made myself and invested. I recognize that my current financial struggles are just a temporary dilemma as I build a secure retirement and save for my off-grid property that I should be able to buy with cash and live simply.
The way I look at it is if I can manage a 7% return on my investments over the next decade, I should be able to have more than a million on capital gains alone along with continued investments that will get me closer to $1.5 million by my mid-50s when I leave my good paying job for a better life. Plus wherever I end up moving, be it rural Missouri or South Dakota or elsewhere, I will probably still need a real job beyond my homestead for at least a few more years as I think universal health care is still a few years off.
Sounds like a lot of money but it really isn’t. Land and equipment is expensive and I hope to have many years in retirement. I don’t want to live fancy but I do want to have the money needed for the equipment needed for a hobby farm, a truck, four wheeler, guns and other implements for working the land.
