I am trying to understand some of the Presidents recent reasoning I have heard of late. Lets see if I got this. We have outrageous debt. for the sake of character space here lets say it is 1000. He is going to get us in more debt, bringing our debt up to 9000. But he promises to have the new debt cut in half by the end of his term, which will be 4500. Hmmmmm seems like we will be worse off if my math is correct.
I see I wasn't the only one who picked up on that.
Sure is nice to see other people NOT understand.
Doesn't look like the Stock Market understood either. :-\
It is good to know I did not imagine what I heard. Because the response by others was indicating to me that I need to retake math.
And yet, the sheep still follow . . .
I do find it funny how they keep going on an on about how expensive the Iraq war has been and how much debt it has built up. Yet that has been over 7-8 years. And in one month the Democratic controlled Washington has spent just as much. The debt is for differnt things, but it is still debt.
well the math does work, but he just wasn't entirely truthful about what the variables are.
CDS or credit default swaps tell alot about credit risks. They tell the amount of premium an entity must pay to buy insurance against failure. One can use a CDS rate as a good tell to find who the market thinks is risky. The market is usually right about these things. Our swap rate is at an all time high, and has been rapidly moving up in the last few days.
Here are some of the others .. go to http://www.debtorsprisonblog.org/ and see some for yourself. Actually very good blog and worth a looksee on it's own.
Italy 194.7
UK 166.5
Sweden 160.8
Belgium 157.8
Netherlands 131
US 100
France 96.9
Japan 95
Germany 91.8 was 70 on 2/13
---
The US pays 100 basis points today, it was 80 on Friday. It rose 25% in 2 days. Here is what that means, the COST of government borrowing has increased because the perceived risk of an all out US GOVERNMENT default has increased 25% in the last two days. For historical context it was at 6 in April 2008.
---
Today was the 5year bond auction day. 5 year came at 1.98 / now at 2.01,
look at out ten year. up big today.
http://ichart.finance.yahoo.com/b?s=%5ETNX (when the market was down?) humm.. that would be odd.
..
the bottom line is very clear.
we are selling a larger and larger amount of debt to a market that has a decreasing appetite for risk. as we continue to acquire debt that we cannot manage our risk of default increases. as risk rises so does the premium for others who borrow. Trimming the deficit has everything to do with math because the cost of that deficit is going to increase. The math does not lie.
There is no printing press, the printing press was the banks (fractional lending) and it has been demolished. Now we are watching the reverse of a printing press.
The actual current debt of the U.S is around 9 trillion. The stimulus costs around a trillion and then if he reduced it in half it would be around 5 trillion. We have already spent over $1 trillion in Iraq without getting squat in return. Once you plug in the numbers it doesn't seam that bad. We have been deficit spending by half a trillion a year, mostly on wars, if we could cut that out, we would have a lot to spend on our own country.
Just an oddity on CDS and basic math.
The us government bonds trade at 100 basis points while campbells soup trades at 46. The collective risk pricing mechanism of the bond world believes it is far more likely for the us government to fail and completely stop paying their bills than campbells soup right now.
Basic math expressly demands that spending be cut. Obamas claim to cut deficit spending is not hollow, it is self preservation.
Self preservation followed by massive tax hikes? Double digit inflation?
Me so scared..... I am staying with a job that I am really starting to despize with few "unwritten" benefits and way too much drama.
muldoon,
i just inherited some money from my mothers estate. it is in a conservitive investment plan that lost $20,000($75 to $55). the plan manager was out to my house yesterday and is making 2-3 new plans and directions for me to see. i asked him if i could close the account, take the money and put it in my credit union and sit on the sidelines until things looked a little better. he said yes and it is not counted as taxable income. i asked him to look into gold also. he mentioned that G.E. was paying 14% returns right now which is really good. i would like to know what you think about my situation and any suggestions. this is the only money i have but i also get a pension, disability and got my first S.S. check today so i have a decent income but that is my only savings.
dan
muldoon, i forgot to mention that i also inherited a 1200 s.f. house w/full basement that is paid for so i have no rent/mortgage payments(i am in the process of remodeling and sprucing up before i move in on april fool's day). i want to hear your take on my situation to add to my decision making process.
thanx, dan
Quote from: apaknad on February 26, 2009, 06:57:27 PM
muldoon,
i just inherited some money from my mothers estate. it is in a conservitive investment plan that lost $20,000($75 to $55). the plan manager was out to my house yesterday and is making 2-3 new plans and directions for me to see. i asked him if i could close the account, take the money and put it in my credit union and sit on the sidelines until things looked a little better. he said yes and it is not counted as taxable income. i asked him to look into gold also. he mentioned that G.E. was paying 14% returns right now which is really good. i would like to know what you think about my situation and any suggestions. this is the only money i have but i also get a pension, disability and got my first S.S. check today so i have a decent income but that is my only savings.
dan
While your waiting for Muldoon, what they are paying is $1.24 per. That works out to 13,70% right now. I haven't done my DD on GE because I'm not really interested now...and even if I was, I wouldn't be arrogant enough to give stock advice.
Look at GE's 52 week spread. $38.52 to $8.53. What if it drops to $3.00 for some reason?
I didn't look at the X date but that $1.24 is subject to change and companies offer High dividends as incentives to customers that would not buy otherwise. GE is a fairly good Company as Good Companies go these days....but these are not stable times. I have always disliked gambling with money I didn't expect to lose.
Gold....again you need to look at the price $944.60 I think. I was at the farm all day and didn't watch any news) That's pretty high. I think it will go up, but how long it will stay depends on a host of variables.
Lots to think about ???
Quote from: apaknad on February 26, 2009, 06:57:27 PM
muldoon,
i just inherited some money from my mothers estate. it is in a conservitive investment plan that lost $20,000($75 to $55). the plan manager was out to my house yesterday and is making 2-3 new plans and directions for me to see. i asked him if i could close the account, take the money and put it in my credit union and sit on the sidelines until things looked a little better. he said yes and it is not counted as taxable income. i asked him to look into gold also. he mentioned that G.E. was paying 14% returns right now which is really good. i would like to know what you think about my situation and any suggestions. this is the only money i have but i also get a pension, disability and got my first S.S. check today so i have a decent income but that is my only savings.
I forgot to mention that i also inherited a 1200 s.f. house w/full basement that is paid for so i have no rent/mortgage payments(i am in the process of remodeling and sprucing up before i move in on april fool's day). i want to hear your take on my situation to add to my decision making process.
thanx, dan
Dan, first off, I am truly sorry to hear about the loss of your mother.
Second, I want to be completely open and up front that I am not qualified to tell anyone what to do with their money. I personally do not wish the guilt associated with losing someone elses money, especially their savings, even moreso that it is a store of wealth of a loved ones lifes work passed on to them. I do not exactly feel very comfortable telling anyone what to do. But you have asked my to offer my opinion, so thats what I'll provide.
With that in mind, I can not tell who how to invest it to make a profit. While there may be some good buys out there, there also are some large risks associated with them. The only thing I can offer you is an honest opinion about how to keep that money safe, and how to preserve the spending power of those dollars going forward. It is my opinion on what to do for safety.
GE bonds are scary as hell to me. There is a very good reason they are paying 14% and that reason is that their risk of default is high. If GE defaults or bankrupts, you lose 100%, everything. In the same token, GM was offering 21% last year and I thought the same thing - their dead. Thats death spiral financing. How can they borrow money at a high rate, lose money every quarter, and pay it back? Maybe the government will step in on GE's behalf -- but I would not touch it.
A news tidbit from reuters on the 24th shows that GE is paying 695 basis points above spread to sell debt. http://news.google.com/news?hl=en&q=GE CDS swaps&um=1&ie=UTF-8&sa=N&tab=wn
A similar report from last September shoed they had 250billion in debt, http://www.reuters.com/article/businessNews/idUSBNG24299520080918?feedType=RSS&feedName=businessNews
.. yeouch. no thanks in this environment.
Second, you also mentioned gold. Gold is at a high right now. Gold has completely stopped trading as a commodity and began trading as a currency. That being said, buying gold scares me. I am sure others will disagree with me BUT I can certainly see a chain of events that drives gold back to 300 as easily as I can see a chain of events that drives it to 3000. I truly believe that the most important force at play right now is the deflationary spiral. Within that, it holds that all assets fall in price because the amount of dollars (credit) decreases which drives prices down. (Consider stocks, houses, cars, dvd players, whatever to see this in effect). At some point, I believe there is large potential for that price mechanism to also impact gold. While I wouldn't necessarily sell what I was holding today (if you are already holding it), I would not try to put any serious amount of wealth into gold. I COULD BE WRONG, and if I am I will eat it on this because I simply wont enter into something that doesnt "work" in my head. gold doesnt. sorry.
If you do wish to chase gold, dont use the GLD or any other "paper" holdings. The only gold play that makes sense is to buy it and physically hold it. The only way gold really pays off in the end is if there is a huge collapse and if such an event were to occur - paper would be worthless. If you feel that gold is the answer, get metal and a safe, or a shovel and a GPS.
--
So what do I think is a good store of value in a deflationary environment?
1) reduce debt. removing obligations helps provide you with a better footing and more self reliance. It removes risk from your life. If you have any revolving debt (credit cards, etc) especially, then cars/housing/student loans, mortgage, - pay them off. A true "financial advisor" will never tell you this, they will say it is better to make the 14% and pay the 7% interest. I would say that removing liabilities and increasing assets is always a good idea. reduce overhead (bills, fixed costs, interests), increase assets.
2) cash is king. pick up a newspaper, go to craigslist. I saw a John Deere 4210 tractor today with fel, 5' brushhog and post hole digger for 6500. Someone is hurting. That tractor with those implements was 19k 2 years ago. While I do not particularly enjoy taking advantage of others in their time of need, the fact is that the sale is mutually beneficial. As prices fall, you can certainly be positioned to buy some things for literally pennies on the dollar.
To see this in "economic terms" watch the INO USDX chart, which tracks the value of USD currency. It's been going up for quite some time, but you dont have to watch that index to know that your dollar today will go further today than a year ago if you shop around. I do not believe that this will be turning in the immediate future, but will watch the situation closely and comment (LOUDLY) on this very forum if it changes.
To take advantage of such a diversion, split your money across 4-5 banks in the area equally. Leave it in a liquid (spendable) form. When something is up for sale that you want, buy it. I wouldn't buy with intent to resale just yet as we are not close to a bottom in my opinion. But, a good deal is a good deal.
3) Lastly, invest in yourself. I learned a long time ago not to invest in companies but to invest in people. That means that it is 100% ok to put money into yourself if you think it will pay off later. Going to college or school is an example. For me, putting a few grand into insulation in the attic, replacing lights with fluorescents, gardening, water efficiency, security improvements, etc. Put some of that money into tangible assets that will return a lower cost of ownership on your house. For example, (just example) spending 5k on a new air conditioner will repay 10k over 4 years. Good investment, better than any bond for sure. Take a look around, you may find lots of things you "could" spend money on to better your situation.
Dan, again - these are just my opinion. I would try to play it safe, to position yourself to take advantage of opportunity as they present themselves, to keep your dollars safe (not a single bank, well under FDIC limits at any single bank), to spend the money locally with yourself as the beneficiary of the dollars spent. I wouldnt put a dime in the stock market or bond market right now.
You guys have just ruin the simplicity of my basic math.... :P
good advice from you and peter,
i would never hold either of you or anyone else on this forum accountable for my decisions. just looking for a sounding board and some brain pickin'. being by nature a contrarian, i think gold will probably have a tendency to go down for awhile. but you never know. that being said i have bought more long term storage food and ammo,(can't eat gold if know one can or will trade w/you. i would not chase gold at this point and agree w/taking physical possession). the house was upgraded by mom with new roof, kitchen, windows, insulation(i think she did it for me as well as her). she was very good w/money and a poor farm girl that went through the depression as well as a "rosie the riveter" in WWII(put together the aft section of B-29's in detroit to be shipped to one of the plains states for final assembly) and thank you for your kind words.
i have one major loan(truck@$24,000) and i just negotiated the interest rate from 12%(bruised credit) to 4%($540/mo. to $408/mo.). a good rate but i was thinking, if i paid this off in cash, i could easily save $24,000 in two years as opposed to paying on the truck for six years.
right now i am leaning towards closing the account and putting the money in the credit union esp. since it was set up by mom and her atty. to be not counted as income against me. she was a smart gal and very strong/brave in the face of the inevitable(uterine cancer, no chemo for this 93 y.o.).
thank you to all for advice and condolences. dan
Paying off debt is almost always better in this environment than any return you can get on an investment. The only debt that might be different are mortgage payments or student loans because of the tax deductions. 4% is a good rate for debt. If that is your only debt, I wouldn't worry as much. Again, that is only my two pennies worth.
P.S. My condolences for you loss.
I've been gone all day again but I think GE cut It's dividend.
YEP! Sure did!
http://finance.yahoo.com/news/GE-cuts-quarterly-dividend-to-apf-14501124.html
thanx squirl, your 2 cents are worth alot to me.
and today, GE went to the dogs. those investors will never a penny of that 14%.
NEW YORK, March 2 (Reuters) - Sellers of credit insurance on General Electric Co's finance arm were asking to be paid on an upfront basis on Monday, a sign of greater perceived risk after a rating agency threatened to cut its "triple-A" rating. Five-year credit default swaps on General Electric Capital Corp were quoted around 8.5 percent upfront, meaning it would cost $850,000 in an upfront payment, plus $500,000 in annual payments to insure $10 million of GE Capital debt, according to data from Phoenix Partners Group. On Friday, it cost $710,000 a year to insure $10 million of debt. Moody's Investors Service on Friday said it may still cut GE's "triple-A" rating after the conglomerate said it plans to reduce its dividend by 68 percent, saving about $9 billion a year.
http://www.cnbc.com/id/29467394/site/14081545/for/cnbc/
Thanks for the opinions, guys.
I'm getting paranoid !!!
Gold has lost about $100.00 in the last week. From a high of about $1000.00, to $901.50 today.
Muldoon - may be right as it spirals to $300.00 ???
Precious metals are down, stock market is falling apart, real estate is on the decline.
Now they are talking about a total collapse. Martial law . . . We will living in the stone age . . .
Someone, give me some hope . . . (Don't you dare say O---a)
Now, possibly the FDIC insurance will fail . . .
http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=alsJZqIFuN3k (http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=alsJZqIFuN3k)
bayviewps -
Dont panic, it's going to be ok.
Yes, in a deflationary spiral -- all asset classes devalue. It is the proverbial "no place to hide" situation. The game goes from return on capital to return of capital. BUT, money still flows.
FDIC failed last year. Which is why the bailout in October tied the FDIC to the treasury. The fdic will be valid as long as the government is functioning. If such an event were to occur, the possibility exists that dollars would not be worth much anyway, as a dollar merely represents a promise of the us government to repay the debt. This is not a certainty, even if it is in the cards, it wont be imminent.
Here's something to give you hope. Everyone who loved you a week ago still loves you today. Here's another one, it helps me sometimes. I like to read, I read all kinds of books. Science, philosophy, arts, music, religion, everything. Anyway, I was reading an article written by a psychyatrist who was discussing the meme that what people need are three things to be happy.
1) something to do
2) someone to love
3) something to look forward to
And I got to thinking about that, and how many unhappy people I see these days and pondering if it was a crock of .#$ article or not. As unemployment ramps, number 1 breaks down, or at least the fear and uncertainty does not build confidence. As stress increases everywhere, our relations take a hit and number 2 decreases. Finally as the doom and gloom mount in every media we encounter all day long number 3 can certainly take a beating.
And that got me thinking about something else. Now, I realize this forum has all kinds of members from all walks of life with different beliefs. So feel free to take this or leave it.
John 14, http://www.christiananswers.net/bible/john14.html go read it if you dont already know it.
Dont let your heart be troubled. Believe in me, love me, love your neighbor, and look forward to the goodness it brings.
That addresses all of those 3 things above, something to do - believe. someone to love - god, jesus, family, friends. something to look forward to - kingdom of heaven.
It may not be for you, but if your looking for some hope you cant do much better than prayer and faith (with a little honest soul searching mixed in as well).
Hey, thanks for posting that, Muldoon - great chapter :)
I'm not worried about gold. It has gone from 700 to 1000 to 800 to 1000 to 900. I consider $100 swing volitility.
(and a little meditation)...preach it brother. [cool]
muldoon . . .
Thanks for the inspiration for the soul.
But, I am just as concerned for familys physical well being. Shelter, food, water, warmth, (safety).
There isn't a secure place for our retirement money. What if the economy completely falls apart? Dollar is worthless, precious metal investments could be consfiscated, etc. I'm "johnny-come-lately" for ammo. The only thing it seems I can do is store food.
Until someone else wants it . . .
Won't I have egg on my face, when I have been saving for the last 20 years. While my friends were buying their new cars and living in the big houses, taking the vacations, dining out. Borrowing till they couldn't get anymore. To find out in the end we all may have nothing. Well, at least I don't have as far to fall . . .
Is this fear-mongering? . . . Like y2k. Are the planes going to drop out of the skies. . . etc. ???
Articles like this aren't helping either. A lot of doom and gloom. The article states: "The bad news is that you won't have a job, pension, annuity, Social Security, Medicare, Medicaid and, quite possibly, your life."
http://market-ticker.org/archives/852-Whats-Dead-Short-Answer-All-Of-It.html (http://market-ticker.org/archives/852-Whats-Dead-Short-Answer-All-Of-It.html)
bayview,
if you are starting from scratch w/little money then do the simple things(i have said this before so don't throw bricks at me, i've only had 14 hours sleep since tuesday.) put your change in a jar at the end of the day for savings. you'd be suprised how quickly it adds up and you won't miss it. by a cheap 12 gauge pump shotgun w/the money saved(mossberg 500/remington 870+ a little ammo(00 buck)) used is fine. buy food,wait for sales on canned goods(4/$1.00). don't worry about nutrition/balanced diet at this time, just stock up(spam lasts forever for meat). simple stuff. start container gardening(very simple and cheap/fun). my e-mail is available to anyone who might have more questions or feel embarassed for some reason to state something here on the forum. don't worry,God is in charge and if you go to the last page of The Book, we win.
dan
No need for worries, bayview but preparation for whatever may happen is always a good idea. As has been mentioned before a .22 is a respectable gun and ammo is still pretty easy to find for it as well as still pretty cheap.
A few bags of wheat, beans and rice - potato flakes etc. are a good start. We are building slowly adding more every couple of months.
As Dan mentioned, start a bit at a time and you will feel better as it grows.
There is only about a 3 day stock at most modern "stores". You should build your own backup and not totally rely on them.
Nothing may ever happen but being ready if it does is a good choice.
We have already spent over $1 trillion in Iraq without getting squat in return.
The impact of 9/11 - besides killing a bunch of innocent people - also heavily impacted our economy and the world's economy. There does seem to be some relation in the lack of another attack and the lack of state sponsored terrorism -- and the war. Libya came clean as one example.
Going to work without a plane crashing into your office building or going shopping without a bomb going off is your return. I like that return better than the one I am getting in my 401K right now -- thank you very much.
Quote from: BobHHowell on March 07, 2009, 08:35:04 AM
Going to work without a plane crashing into your office building or going shopping without a bomb going off is your return.
Good point BobHHowell. It's difficult to imagine what waiting for the daily bus must be like in some parts of the world.
Of course, Conspiracy Theorists will tend to disagree with that statement.
No one has proven that our side didn't assist and allow it, and since they will not allow an honest investigation with all questions and inconsistencies accounted for, it doesn't look good for our government and their big business alliances.
In fact, they immediately destroyed the evidence by immediately sending it to China to be melted down so it could not be properly analyzed. Since when has that been standard operating procedure?
The fact that we have not been re-attacked could be because we sheepily fell for their lies and most supported their fascist causes. They only needed to make fake Bin Laden tapes to keep us pissing in our own boots .
Invest in God...nuff said.
Hey Stinky, I now have the official story of our financial crisis & the bailout. My SIL sent me this...
Heidi is the proprietor of a bar in Berlin . In order to increase
sales, she decides to allow her loyal customers - most of whom are
unemployed alcoholics - to drink now but pay later. She keeps track
of the drinks consumed on a ledger (thereby granting the customers
loans).
Word gets around and as a result increasing numbers of customers flood
into Heidi's bar.
Taking advantage of her customers' freedom from immediate payment
constraints, Heidi increases her prices for wine and beer, the
most-consumed beverages. Her sales volume increases massively.
A young and dynamic customer service consultant at the local bank
recognizes these customer debts as valuable future assets and
increases Heidi's borrowing limit.
He sees no reason for undue concern since he has the debts of the
alcoholics as collateral.
At the bank's corporate headquarters, expert bankers transform these
customer assets into DRINKBONDS, ALKBONDS and PUKEBONDS. These
securities are then traded on markets worldwide. No one really
understands what these abbreviations mean and how the securities are
guaranteed. Nevertheless, as their prices continuously climb, the
securities become top-selling items.
One day, although the prices are still climbing, a risk manager
(subsequently of course fired due his negativity) of the bank decides
that slowly the time has come to demand payment of the debts incurred
by the drinkers at Heidi's bar.
However they cannot pay back the debts.
Heidi cannot fulfill her loan obligations and claims bankruptcy.
DRINKBOND and ALKBOND drop in price by 95%. PUKEBOND performs better,
stabilizing in price after dropping by 80%.
The suppliers of Heidi's bar, having granted her generous payment due
dates and having invested in the securities are faced with a new
situation. Her wine supplier claims bankruptcy, her beer supplier is
taken over by a competitor.
The bank is saved by the Government following dramatic round-the-clock
consultations by leaders from the governing political parties.
The funds required for this purpose are obtained by a tax levied on
the non-drinkers.
Finally, an explanation we can all understand...
Thanks for all of your responses . . .
I understand the need for food, ammo, etc. But, I have 20 years of savings I'm also worried about. Where would the safest place be for investment?
I think a lot of people are avoiding the question for a reason BV. Personally, I am not savvy enough to give investment advice. In the current market, I'm not sure anyone is and I certainly don't want to be responsible for you losing money.
If I had to make a safe suggestion, it would be in a CD at a stable bank like BB&T. They have different corporate banks for different areas so you can split it up and stay under the FDIC limit.
Two problems with that.
1. It ties up your money for the CD period and as has already een said, cash is king and ready cash is better.
2. Even though FDIC got a bailout, it is a long way from safe.
With the criminals running things now - safety is not an assured thing. As muldoon stated many times - if you have debt now then paying it off is one of the only for sure safe places -- makes a lot of sense. It won't be hanging over you as interest is increased as they just did to us on a credit card. We are paying that down now.
Sassy has a 401K type federal gov. plan -- she is locked out of it as far as pulling it out and must watch it dwindle away. That is not safe- fair or recommended. She got what she could and put it on our property years back. Flutterby was able to get hers and pay off their property and put in a well. As muldoon says - investing in yourself is safe. Don't expect the criminals to help you increase your savings. If they can steal it, they will. That's my take. ::)
Quote from: glenn kangiser on March 08, 2009, 11:04:48 AM
With the criminals running things now - safety is not an assured thing. As muldoon stated many times - if you have debt now then paying it off is one of the only for sure safe places -- makes a lot of sense.
Sassy has a 401K type federal gov. plan -- she is locked out of it as far as pulling it out and must watch it dwindle away. That is not safe- fair or recommended. She got what she could and put it on our property years back. Flutterby was able to get hers and pay off their property and put in a well. As muldoon says - investing in yourself is safe. Don't expect the criminals to help you increase your savings. If they can steal it, they will. That's my take. ::)
What he said. We sank my 403(b) into our land and infrastructure: a well, well pump, driveway, septic system, and all the houseparts we could find on Craigslist over a couple of years. Now we're debt free, poor as dirt, building a house as we can scrape the nickles together, and I have never felt so secure.
w* to the forum Woodsprite. At least you have a sound plan.
I am curious if anyone's investments have ended up helping them, or if they were just stress traps. Not sayin, just sayin...
We've been happier than some many. The real estate rental market has been good and we bought at good times. :D Some other things have been less than spectacular, but still ahead of the average. :-\
Haven't seen you much in a while, welcome back.
;) Can't claim we are completely whole again but, our investments and IRAs have regained about 80% of our losses in 2008. It was definitely stressful but we gritted our teeth and resisted the impulse to sell! sell! sell! (at the bottom of course) and it has worked out well so far----could have easily gone the other way we realize.
We have no magic advice or secret information----just good diversification and most importantly---no debt to magnify the pressure to panic. Don't know where the larger economy or the country in general is heading. Unfortunately we will have to go along for the ride and hope the destination is tolerable.
Quote from: Jens on November 29, 2009, 09:31:26 PM
I am curious if anyone's investments have ended up helping them, or if they were just stress traps. Not sayin, just sayin...
Yes, no and maybe Jens.
Yes, the long term investments give us a fairly good monthly income but because the cost of things has gone up so much...it doesn't go as far as it used to. I'm also constantly worried about the wisdom of leaving long term out there in such an unstable economy.
No, I'm not making as much in short term investments, especially the Stock market, because there still isn't a base. It's a guessing game.
Maybe, the stock market is developing a rhythm again. It's not because any sanity or basis has returned, but it is somewhat predictable. It's like watching the wind sock on a gusty day. Even though nothing is constant, you get to where you can guess when the next gust will be.
Hey Jens great to see you back.....
The best thing we have done - that seen the biggest dividends - for anything we have ever done investment wise is get on a written budget, stick to it.
Then went cash only. (We do have a debt card.)
Next we search high and low using Craigs list and word of mouth, and some in the stores for bargains. I never did this before, if I needed something for the ranch or down here I just went and got it. Now with the written budget thing going and not going into debt or seemingly more into debt at every turn for us life is a lot more fun and simple. We know what we have to spend in each category and if the money is not there this month it waits. Best thing is we are on longer loosing money out the tail end of the balance sheet in the form of interest paid. Great investment when it all works together!!!
Good example I have been looking at Craigs list for culvert pipe 48" X 16' to go in a creek for up at the ranch. It was going to cost us like $700 or $800 new and shinny that we are just going to cover over with dirt and rock anyway. I found it yesterday slightly used and dirty but in very good shape for $112. I found a water tank for irrigating our orchard 1200 gallon for $250. It was going to cost us $1000 plus freight new.
Seems the old saying watch the nickles and dimes and the dollars will take care of themselves is still true.
rlr
Way to go, rick91351! We've gotta do that - have a book by Dave Ramsey - have read part of it & also a book by Randy Alcorn titled The Treasure Principle Alcorn looks more at where your heart it, therefore your priorities while Ramsey gives you the more hands on, method of budgeting. Both good books - I stopped reading Ramsey to read Alcorn because needed what Alcorn said 1st, if that makes sense ???
Randy Alcorn has written a lot of great books. Larry Burkett, also a great writer, wrote some very good books on finances & many other things.
hey jens,
I made money this year in the market, not as much as last year but enough to stay at it in my spare time. I treat it as casino money tho, my real dollars have been out for quite some time. I sunk most of them in productive assets and debt reduction. Except for some buffer money (illness/jobloss protection) I have no real money to worry about anymore. In my opinion that has been the biggest stress reliever.
I went back to re-read this thread as I did not remember the context of the question. Basically, this is from February this year, during the hellacious crash and just before the height of the freefall. It was dreary days. My thoughts at the time and my advice was to
1) reduce debt, especially revolving credit cards (that are now jacked to 29% for the most part, those refi at 0% days are gone). Those who relied on the ability to roll debt over on continued cheap terms got hosed, and thats the case whether or not it was a credit card an ARM mortgage or a business loan.
2) cash is king, and in many ways, it still is. no matter what you read in the paper about the dollar - you can still purchase great assets at distressed prices because people need dollars.
3) invest in yourself, education, energy efficency, etc.
--
I said that investing in those high yeild bonds by broken companies was a bad idea.
And it was, the us government broke the rule of law and threw out bondholders claims on GM as preferred and senior preferred debt only get pennies on the dollar while they gave UAW 30% of the company. Had you held those bonds you got squashed. The net affect of killing the bond market is that private capital is gone. The fed is the lender of last resort and the only lender now because no one can invest with any confidence that the criminals wont just seize it like it was Mexico or Venuezula or Russia.
--
If I had to go back in time and edit that post I wouldn't change anything today. I have followed roughly the same advice in my life this year and am happy with the returns from it. overall my biggest investment this year has been time investment in family. My biggest dollar investments has been to continue on the debt free path - the country land and city house mortgage now are all thats left. I have no regrets on either of these investments at all.
Thanks for the welcome back guys. I have been checking up here and there, but busy with other stuff. Wasn't able or motivated to do much on the house either, so didn't have anything to report. Will be taking photos of new work on the house and posting them soon.
Investments are something that only slightly interest me. I say only slightly because I have never had the kind of income to have to think about investments, just never was there. If there is an extra $10 in my pocket, I'd rather give it away. I know that doesn't make long term sense, think about my kids, yadda yadda. I despise money. It is simply a means to an end for us. If the extra were there, we would be buying land, paying this mortgage off the rest of the way, going solar. Those will be the next steps, maybe not in that order.
Like I said, was just wondering how the things worked out for everyone. I know my friend Dino just kept buying guns and ammo. Now he just has a lot of guns and ammo, but last I checked stores won't take that in exchange for tools and building supplies :)
I think you need to balance the guns and ammo with a lot of other stuff.
Quote from: Jens on December 01, 2009, 09:30:36 PM
Like I said, was just wondering how the things worked out for everyone. I know my friend Dino just kept buying guns and ammo. Now he just has a lot of guns and ammo, but last I checked stores won't take that in exchange for tools and building supplies :)
heh
I took the maximum loan on my 401K when the market was at around 13,000. I have been earning a steady tax free 5% interest on myself for the past year and a half. I bought land with it and have enjoyed ever minute I get to spend there. A great return.
I've done that a couple times - figured I could use my money & pay myself interest & if everything falls apart, I still was able to use that money...