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How much is enough? For many investors, determining the answer to this question is often a top priority in their financial planning process. Another way to ask it: How much do I need in my investment portfolio to retire and maintain a certain lifestyle for the rest of my life, with little chance of running out of money? Not only is this a question that pre-retirees must plan for, but those who are currently retired must continually review whether they continue to “have enough.”
Retirement Portfolio Simulation
A sophisticated and preferred approach to determining “how much is enough” is using portfolio simulation. This method simulates the future based on historical returns and correlations of the various major investment classes. The results are based on thousands of trials and project the value of an investment portfolio over many years taking into account distributions, taxes, inflation, and a historical range of random investment returns using a mathematical process. Investment results do not come in a straight line, meaning you may average 7% per year, but rarely will actually earn exactly 7% in any given year. Therefore, it is best to see how an investor’s results could be impacted based on variable and random investment returns over time. This method of projecting the future better communicates the potential best and worst case scenarios in order for the investor to understand the impact of planning decisions and to be more confident in turn.
4% Withdrawal Principle
Portfolio simulation can be applied to an investor’s annual planning using the 4% Withdrawal Principle. Portfolio simulation supports the conclusion that you have a low probability of depleting your principal over time if you withdraw no more than 4% of your beginning portfolio balance. For example, if you have $1 million in your portfolio on January 1st, studies indicate you can safely plan to withdraw $40,000 per year, adjusted for inflation each year. The higher the annual withdrawal rate, the greater the probability of running out of money. In fact, based on portfolio simulation, we estimate that increasing your withdrawal percentage from 4% to just 6% increases your likelihood of running out of money dramatically (from 6% to 48%).
Timing has an Impact on a Portfolio
The time period in which you retire will have an impact on your portfolio, and could steer you off course from staying within a safe withdrawal rate. Looking at historical market returns for a 60% stock/40% bond portfolio, if an investor retired in 1973 their average portfolio return the first five years of retirement was 2.40%. If another investor retired in 1993, their five year average return was 15.45%. The 1973 investor would have been spending down principle during those first five years if they budgeted to retire and withdraw 4% per year.
Retirement planning should never be “checked off the list” the day you decide to retire. Personal income and lifestyle decisions change, family goals are adjusted, health issues may arise, and economic conditions vary. Making periodic changes to your portfolio and spending habits in retirement is necessary to ensure long-term financial success, a low probability of running out of money, and increased peace of mind that you’re still on track.
L. Brown is a Shareholder and Wealth Advisor at Brightworth, where she works with a select number of high net worth families in the areas of Atlanta investment management, executive compensation, retirement transition and estate planning. Brightworth is an independent Atlanta financial planning firm that provides investment and wealth counsel to high net worth individuals, families and institutions.
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“Money is the root of all evil.”
“The rich are snobs.”
“Gotta work hard for your money.”
The above phrases, and many more which you probably know, are common in many people’s lives. You may have some from your childhood which still persist in your life today. Compare the above phrases with the ones below.
“Money is beautiful.”
“Rich people are generous.”
“Money flows to us when we give.”
Notice any distinctions? The way we talk and think about money speaks directly to the way we value money. In this article I will outline three key practices that, when practiced, will have a positive impact on the amount of money you make and keep-regardless of how much money you currently enjoy.
Money is a medium of exchange. It is energy that flows between a shop owner and their customers. When you purchase something, say a hamburger, you are deciding that the hamburger is worth more than your money. This is an important distinction. Anytime you spend your money, you value the item or experience to be worth more than the amount of money you are spending.
As humans, we used to exchange an item for an item-a horse for a pig. Then we began valuing shells and metals and we exchanged these for other items. Once states and nations came into existence, they began to control currencies and we created bills and coins. This is what we have today along with our digital forms of transactions. Each time we modify our currencies, we adopt more efficient means of exchange. Currencies represent the actual things we exchange. Money represents the actual value in energy that we trade.
In other words, the dollar bill could be worth a dollar today and in ten years, comparatively, it could be worth $.075 when compared to the original buck. This is inflation at work. Currencies may stay the same for decades and even centuries (given in to a few security changes overtime). However, money itself fluctuates on a minute by minute time frame. Money is energy and it is in constant flow.
Knowing these distinctions we can explore three life changing and pocket book altering tips.
How we think and talk about money shows us how we value money.
When you do not value something, what happens to it? It tends to disappear. Think about relationships you have with people in your life. The ones you value you probably speak to daily or weekly in order to keep them close and healthy. Plants, when not valued, will wilt and pass away. This is similar to money.
If we go around thinking money is the root of all evil, we would associate it with being evil and our actions would ensure we got rid of it when we had a large sum of money fall into our laps. We would not want to be evil. This works on a subtle level.
Here is another version that played out in my life. I recently had an opportunity to leave my job. In other words, I had conflict and one option was to resign. I already did this a few years ago, so it was too familiar. As I explored this, I had a thought come into my mind, and perhaps this sounds familiar. In evaluating this decision I asked, “What if money were not a factor? How would I proceed then?”
This is subtle. This question represents a tricky, conditioned response. What if I asked this question instead: “If my kids were dead, how would I proceed with this decision?” I am being blunt for a reason. The questions are insane.
When asking this about money and taking money off the table, I diminish the value I have for money. If I diminish its value, then I am sending the message that it is not important. As soon as I was able to catch that and say that money is important, in fact, I am willing to do whatever it takes to have the money flow into my life, a new message is sent. The universe responds.
Explore the subtleties in your language to learn how you are resisting more money coming into your life.
How we spend our money shows us how we value ourselves.
When you get paid, how do you spend your money? Have you noticed the flow from your pocket out yet?
Very successful people pay themselves first. They will literally cash a check and take an amount from this to place into a long-term savings account which they have set up for only themselves. What they are saying in this action is “I am worthy.” It is really powerful.
Explore how you spend your money. You may pay the mortgage or other bills; you may purchase a beer or another experience. All of the ways you spend money point to how you value your life. If you are not paying yourself first you are not valuing yourself. This has important implications as to the amount of wealth you can acquire.
Set something up for yourself automatically where you give up control. Anything can do to begin this process and it is incredibly important, especially if you feel you have no way of doing this. Just start. The rest will take care of itself. Many of us, if you are like me, try to worry about how it will all work. Let that go for now, take $10, $100, or $500, whatever the value would be for you, and pay yourself first. It will work, trust me.
Money is energy, therefore it needs to flow.
There are people who have a lot of money and they are unhappy people. There is the opposite too. It does not matter how much or how little money you have in comparison to someone else. The important thing to realize is that you value yourself, you value money, and you keep it moving. You can keep your money moving by giving small amounts of it regularly to people and missions you love. It must feel good, and when it does, this will generate gifts that will come back to you.
In your long-term investments, keep your money moving by having accounts set-up in conservative investments. These will ensure your capital remains certain and you circulate the energy you collect in the form of money. Money is like water, it becomes stagnate without a flow.
Valuing money is all about the subtleties in how we manage our thoughts and emotions. Successful people care for themselves, steward their money, keep it moving, and have rituals established that allow them to do this without emotional swings which can deter us from bigger dreams. Money can fulfill your “why” in life. Why do you want more money?
Matthew Scott K is a father, husband, entrepreneur, author, speaker, and coach, who is based out of Gunnison, Colorado. He is heavily invested in mentoring and the education of today’s youth while focusing on working with people who are seeking life mastery.
Matthew currently coaches people in a boxing class he calls Fight 4 Your Life and through Ollin Academy. Ollin Academy offers multiple lessons on various facets of life designed to help people bring all their heart into experience.
Matthew has a special offer at his blog for people seeking more accountability and clarity in their life. You can find it here along with other great resources http://www.MatthewScottK.com.
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How do I invest my money wisely? How do I build wealth? What is the best investment product with the highest return on investment? What do you recommend I invest in? I have $1000, what do I invest in? These are some questions I receive often and I will try to provide answers from my own perspective.
There are a lot of investment products you can invest your money into. You can invest in stocks, real estate, gold, silver, commodities, businesses, etc. But I want to state that there’s more to investing than meets the eye. Most people are obsessed with the investment product and procedure without having the right plan in place. I want to thank Robert Kiyosaki for expanding my insights on this topic. He made me understand that more important than an investment product is a plan. Just as starting a business requires a business plan; so also does investing requires a plan. If you have no written plan on how to invest your money; forget about investing. You can discuss with your financial adviser on the best possible plan for you.
How to invest your money wisely and build wealth
Now before you rush into investing your money in any investment product, I think it’s worthwhile you read the following tips on the best investment product to invest your money in. What should you invest in?
1. Invest in something you understand
There’s a strong inter-relationship between business and investing. Just as it’s advisable you start a business with a thorough understanding of the industry you are going into; the same is applicable to investing. Sometimes I find it funny that people actually start a business or buy an investment product based on the recommendation of a friend or their financial advisor. Others invest in an investment product just because someone else succeeded with that same product. Sincerely speaking, I believe this approach is wrong. Understanding is vital to any endeavor you find yourself in life including investing. Don’t jump into any investment; be it stocks or real estate with first understanding the intricacies of such investment. Lack of understanding is the primary reason why investors panic in an economic downturn. With proper understanding, you will be able to maximize your profit; manage risk and minimize your loss in any investment.
2. Invest in something you are passionate about
Do you know why Warren Buffett emerged the world’s richest investor? Or Donald Trump the biggest real estate developer in New York City? The answer is that they are both passionate about their chosen investment field. You have to be passionate about investing to get the best out of it; you must love the game regardless of whether you win or lose. Never invest in something you are not passionate about; you will only end up with heartache.
3. Invest in something you are willing to learn through
Life is a teacher; the more we live, the more we learn. The only thing constant in life is change and in the world of investing; such change occur very rapidly. Now how do you stay in control when the tidal wave of change comes? How can your investment strategy stay relevant in times of change? The answer lies in continuous learning. Investing is like a rapidly flowing river and to stay on course; you have to be on the edge, ever ready to learn. Never invest in something you hate learning about; no matter how lucrative it may be. If you find reading annual reports boring; or you hate charts, math, calculations and all the jargons associated with technical analysis. Then stay away from stocks. If you hate fixing toilets; then stay away from real estate or better still, partner with someone who loves fixing toilets. The lesson I am trying to emphasize here is this: never invest in something you are not willing to learn through; period.
4. Invest in something you are willing to stick with
For everything there is a season. Business and investing has its good time and bad time; highs and lows. If you are not persistent enough, you will give up. So before you commit your money to any business idea or investment; be sure you are prepared to follow it through to the end, which might lead you to either losing your money or making some profit. Never invest in something you are not willing to stick your neck with; never put your money in something you are not willing to hold.
5. Invest in something you have control over
Lastly, control is one of the most important criteria every successful investor looks out for in an investment. Never lose control of your investment because control is essential to risk management. The reason I chose building a business as my best investment opportunity is because I have absolute control over it. I can increase my sales, control my cash flow, reduce my expenses, adjust my liquidity ratio, and sell the business or hold. I equally know the necessary buttons to press to increase the value of my business if ever I decide to sell any if any part of my business breaks down; I know what to do. That’s the power of control. I know a lot of investors who have conceded their power of control to stockbrokers, fund managers, financial advisors and analysts. Don’t do the same.
As a final note, these are the five factors I feel are most important to cross check before sinking your hard earned cash into any investment. Never fall in love with an investment opportunity without first considering these factors because they are fundamental to sound investing and wealth building. Ignore them at your own peril.
And just before I drop my pen, if you need Expert Investment Advice on How to Start Investing in stocks, real estate, commodities, etc; please feel free to visit our blog. We also provide free tips and strategies on Investing for Beginners.
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There are ways to develop a money making mindset, even in troubling times like we have today. All it takes is some savvy mental coaching. While you may even see many of these tips in some of the more popular self-help books out on the market today, in reality, these steps have been around a lot longer than that and can be found in the beliefs followed by some of the world’s most successful entrepreneurs.
Money Making Mindset #1: See it to Believe It
One of the most successful psychological and therapeutic ways to alter the way you think and handle day-to-day activities is to employ the art of visualization. This means literally seeing yourself being successful and seeing it happening today, tomorrow and into the future. Done often enough, the mind begins to believe it is real and every action taken after that realization bolsters that money making mindset.
Money Making Mindset #2: Stop Dreaming and Do Something about It
All of us have dreamed about having our own successful business at some point in our lives; unfortunately, for the majority of us dreamers, it may get past the dreaming stage but it never makes it past the planning stage. This is the stage where we draft possible business ideas on paper, do a little research, buy books and maybe a draft of a business plan. And, that is where it stops. Now is the time to do something real about all those dreams currently residing in a drawer, the plain and simple truth is you cannot be a success unless you get started.
Money Making Mindset #3: After Visualization Comes Anticipation
Now that you believe that success is inevitable, it is up to you to keep that anticipation going. Starting each day with this kind of positive thinking, each step you take will bring you closer to that success and nothing keeps excitement going like anticipation. Approach each step and every potential roadblock as if success waits just beyond it. Expectation is a powerful key to the law of attraction and if you keep expecting it to happen, each day your money making mindset becomes stronger.
Money Making Mindset #4: Gratitude is Everything
Do not let yourself fall into the habit of “wishing” that you could have everything you want right now. Remember that wishing means that it has become unattainable, unreachable. Instead, focus on being grateful for what you have right now and adjust your thinking from “hoping” you’ll get something to “when” you’ll get something. This will reinforce a positive attitude, based on gratitude, and keep you on the right path.
Money Making Mindset #5: Development is a Study in Perpetual Motion
Never adopt a sense of complacency. You can anticipate success, do things that bring you closer to success, and remain focused, but you also need to keep developing steps to get you to where you want to be. Educate yourself on methods for further increasing the likelihood of your success. A money making mindset does not accept things as they are, but looks for ways to achieve more.
With these five steps, you’ll develop and hone your money making mindset quickly and be able to forge your own path to financial success.
Tony is a life coach who has helped people double their income, increase their value in the community and develop amazing relationships with family and friends.
His website has many sources of help to accelerate your success.
http://www.themoneymakingmindset.com
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A lot of people may have heard about mindfulness and creating your own success. A lot of it is rubbish, but believe me when I say that there is a core of truth in all of this. You may think that making money by focusing your thoughts is a hype that will pass again, but did you know that scientists have been writing about this since the early years of last century and even before that?
The mind has a lot of power, to say the least. When you are feeling down, nothing seems to go right and when you feel relaxed and happy, you are on top of the world. Your mind has an impact on your entire system, your surroundings, your wellbeing and even your financial status.
I don’t want to get into too much psychological details, but I want to give you one example that every one can relate too. Let’s say that you have been working on a report for your boss that you couldn’t quite get together. You showed him and he was not impressed. The week after that, you have made him a different report. This actually is a topic you know very much about and you were able to make a very good report on it. In your heart you knew that this is the best report you have made in years, but based on your last meeting with your boss, you start to doubt. You hesitate and for some reason, when you stand in your bosses office you can’t get the right words out of your mouth and you look insecure.
Your boss picks up these negative signals and of course he has a lot of comments on your work. You get frustrated because you know you have done an exemplary job. You respond to your boss in a negative manner and it gets from bad to worse and you have to do the work all over again.
The reason why this happened is because you were insecure and you doubted yourself. Deep inside you knew that the job you did was right, but your mind started toying with you. It connected with bad past experiences and made you fail while there was no reason for failure at all.
This example is one you can translate to all kinds of problems you may have, even the lack of money. What is the real reason you don’t have enough money to come by? Why is it that there are very rich people in the world and you are not one of them? Because they focus on what they want and what they need. They set their minds to success and not to failure. They believe in themselves and in their capacity to be rich, unlike you. But, there is hope for you. You can start by being making a lot of money and being rich right now. All you need to do is focus your mind and the rest will follow!
Focus for a few weeks and get amazing results in your bank account. http://www.very-good-income.com
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The best piece of advice I can give anyone who is serious about building wealth is this: You need to read The Richest Man in Babylon. Of all the books on financial planning and personal wealth I have read in my life, The Richest Man In Babylon is by far the best. I just finished re-reading this book for the third time. And here is the kicker: It was first written in 1926!
A Wealth Building Book from the 1920s?
Why would anyone today want to read a book on personal wealth that was written in the 1920s? (Did they even have indoor plumbing back then?) Well, in my case, I read the book because a billionaire I know told me to read it. That was all the convincing I needed!
Here is a little background on the book. The Richest Man in Babylon was written by George Samuel Clason (1874 – 1957). He wrote several informational pamphlets for banks and insurance companies. (In my mind, George Clason is the godfather of personal finance blogging.) These separate pamphlets were pulled together and published in 1926 as a book called The Richest Man In Babylon.
You may not have heard of this book, but I guarantee you already know some of its contents. Have you ever heard of the concept of saving 10% of each paycheck, or “paying yourself first?” Almost every wealth expert I listen to today presents this idea in some form or another as their own “secret formula for success.” Well guess what? Mr. Clason introduced this concept way back in the 1920s.
Controlling debt is a big issue today. Wealth experts everywhere pound us everyday with the concept of “living within your means.” Well that’s in the book, too. I’ve noticed dividend investing is becoming very popular these days. That topic is covered starting in Chapter 2. Want to protect your wealth from loss? The book provides lots of advice on that as well.
Most books I’ve read on finance and wealth creation are very technical and quite frankly, boring. The beauty of this book is its unique style. Topics are introduced through a collection of parables set in ancient Babylon. The stories are interesting, the characters are fascinating, and the contents are very informative. Not only will you enjoy reading about characters like Bansir (a chariot builder), Mathod (a money lender) and Arkad (the richest man in Babylon), you will also learn the foundations of wealth creation. Also, the book is relatively short with only 144 pages.
The Principles of Wealth Building Have Not Changed Since the Days of Babylon
So why do I recommend a book from the 1920s? My experience has taught me that the more things change, the more things stay the same. Despite the advent of computers, the internet, and Wall Street trading algorithms, the principles of wealth creation have not changed much since the ancient times Babylon.
I use the word “principles” deliberately when describing wealth creation because I do believe there are a set of rules that everyone can follow to be successful. In fact, the principles of wealth creation are quite simple, as The Richest Man In Babylon will show.
Of course, simple doesn’t always mean easy. Wealth building also involves discipline, dedication, sacrifice and hard work, and that is the part you need to supply.
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It was revealed at the end of March that the Chinese government have plans to circumvent US sanctions against Iranian oil sales by trading with the oldest currency in the world – gold. China’s ascendancy and the transfer of wealth towards the East are likely to be the most important influences on gold prices in the coming years.
This news is hugely significant for two reasons. Firstly, if such a trade takes place, it will mark the reintroduction of gold as a global trade currency, placing the US Dollar under considerable pressure. The Chinese have gradually reduced their exposure to US debt over the past three years and have bought increasing amounts of gold – we are turning our gold into cash while the Chinese are turning their cash (US treasuries) to gold. Remember, China is now the second largest economy in the world and is on a trajectory that will place it at number one in the very near future.
Secondly, it shows how China’s attitude towards the West has shifted. This is in defiance of sanctions driven by the US. Ten years ago this would not have been likely. Then again if someone told you ten years ago that China would own 24% of foreign held US debt and that total US debt would top €15 Trillion in 2012 you would have laughed at them. Indeed, change is upon us.
You may be wondering what all of this has to do with you. In a world where we compete for global resources, the currency that you hold in your bank account or vault will determine your ability to purchase in the future. In 2010 The Brookings Institute predicted that by 2020, just 8 years from now, 54% of the global middle class will reside in the Asia Pacific region, up from 28% in 2009. This new middle class will want the same consumptive lifestyle that we now live.
I predict one of two things will happen. Either increasing amounts of resources will be discovered somehow in order to satisfy all of our needs (remember all of the easy cheap stuff has already been found and mined, farmed, fished and welled) otherwise we will have to compete for increasingly scarce resources with those from the East – those who have been buying up land across Africa, buying share holdings in the world’s largest resource companies, and hording gold.
According to the IMF, in March alone, Mexico, Turkey, Russia, Kazakhstan, Ukraine, Tajikistan, and Belarus all increased their holdings of gold bullion. Central Bankers are becoming increasingly nervous about both the US and the Euro zone nations’ ability to stabilise their economies and their ability, in particular, to do so without resorting to printing more money.
All investors should consider purchasing, at the very least, a small amount of physical gold in order to protect a portion of their wealth from further bailouts leading to quantitative easing (QE) and further Long-Term Repo Operations (LTRO) from the ECB. These measures can only lead to debasement of the currency, decimated purchasing power and higher inflation.
Dr.Greg Heaslip is a Director of GoldHold.
http://www.gold-hold.com
GoldHold specialises in bullion sales and management, offering physical gold investment products through a secure collective depository (vault) in Zurich, Switzerland. This vault is operated by ViaMAT International where billions of Euros worth of precious metals are stored and insured through Lloyds of London. Whether you are a prudent individual investor or an institutional client, you can benefit from our expertise, bulk purchasing power and wholesale storage. Client assets are held under contract with Europe’s largest and most trusted custodian in order to protect their wealth from currency debasement and the spiralling global debt crisis. Visit GoldHold to learn how gold operates within the global financial system and how you can invest in the world’s oldest currency to protect your wealth.
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If you are feeling sad because you have no job, and you may think that you have no future because you have no job, you can stop whining. Of course, most people think it is terrible if they don’t have a job. No job means no money and no way to pay the bills. But: no job means that you have all the time in the world to create a better and successful life for yourself. You have a golden opportunity to spend all your time in a prosperous project that will make you millions of dollars!
If you don’t believe it, it is true. Without a job and without a lot of money, you can still make lots of money. The trick is that you do not have to invest anything but your time, and time is all you have when you do not have a job. In fact, consider yourself blessed with that much time. I know there are a lot of people who want to start making a lot of money, but they lack the time. They spend all their time at work and have to manage their time well in order to make money.
You could say that you have an advantage to the people who do have a job. There is a lot of money to be made if you just have enough time to do it in. People with regular jobs can make a lot of money, just like you do. It just takes them a bit longer because they have to make time to do their jobs too. All it takes to make a lot of money is for you to invest in time.
If you spend only a couple of hours on making money, you can quit your day job within a couple of weeks. Since you do not have a job, you can spend all of your time into money-making, and have the luxury of having a very good income in a shorter period of time. The good thing about this kind of making money is that if you really focus for some time, you already will earn more than you did when you still had a job. And it gets better. After some time, you have made enough money for you to invest some of it in others. This way, you can work less and less and let the system earn your money for you.
I bet it is a better feeling doing nothing, but still earn a lot of money, than doing nothing and feel sorry for yourself because you do not have a regular job.
This can work for you too, you can learn that you will even have an advantage over people who do have jobs. Just because you have all the time in the world, and that is all it takes to make your first million! So no more sadness and let’s start to make some money!
Learn more about getting 1 million dollars? http://www.very-good-income.com
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I’m being tongue in cheek, but speaking literally of gold and all the gold hype. Before 2000 for about twenty years gold was hardly spoken of in the media as an investment of any interest. Let’s look at some history:
From the period of 1934-1971 gold was set at a fixed rate of $35.00 = one ounce of gold. The purpose was to set an internationally understood declaration of what US dollars were worth. Anyone could trade $35.00 American dollars for one ounce of gold. In the late 1960s people began to seek to increase their gold reserves by cashing in on this promise. Our gold supply drained down until August 15, 1971 when Nixon close the gold window. The price of gold climbed steadily reaching $850 per ounce on January 21, 1980 (which also caused interest rates on mortgages, US Treasuries, CDs and everything else to go to historic highs – high oil prices exasperated the problem).
For today I’m more interested in the price of gold and gold as an investment; more specifically, whether or not gold is a good investment. What I tell clients when they ask this is, “Does your net worth care HOW it increased or what vehicles it took to grow, or is it more concerned THAT it increased?” Obviously, most people don’t really care whether or not they made money in stocks, bonds or in gold, they just care that their money grew. Gold, because it’s gold, has an inherit illusion of value more than a stock. We, the people of the earth, have used it forever. But for now ignore that it is gold and let’s pretend that it is a stock of XYZ Company and retrace its steps going back to the last time gold was hyped up to these levels.
Some may be shocked that as recently as 1971 you could buy an ounce of gold for $35.00. I can feel my readers kicking themselves for not stockpiling gold while they could. Let’s look at a rate of return. Gold recently peaked at $1,913. So we’re looking at about a 40 year time span and I’m calculating this at about a 10.52% rate of return, which is about what the major equity indices have averaged the past 80 years. And let’s be honest here, for those who are diving into this gold hype, what prices did they pay? Did they jump in at $35.00 or some of the low prices of late 90s? It’s very unlikely as it is simply the nature of bubbles that investors jump into the investment later in the price run up and that demand gives the price even more increase… until, it doesn’t and everyone panics out of it. Was this not the same thing with: the dot.com hysteria, oil and real estate?
So, is gold a good investment? Will it go to $2,500 an ounce? $5,000 an ounce? I have no idea. But what would make it go that high? It would be an investing environment of extreme fear and the people of the earth fleeing to safety. If it did hit those levels, does anyone believe that it would permanently stay at those levels? I’ve never heard anyone say “yes”; furthermore, most of the gold hype implies letting it rise and pulling out at the peak. This is patently stupid. For one, the last time it peaked, it didn’t return to those peak levels for nearly 30 years. Ahem, no growth or dividends or anything for 30 years.
More importantly, how good is anyone at timing a market peak? Nobody. Lastly, historically speaking what happens to all periods of extreme fear? They end. At some point, the mass fear settles down. Today, is anyone afraid of the Cuba Missile Crisis? Communists? The Russians? The Japanese systematically buying America? Not really. How about more recent history? How afraid is the typical American of “the next terrorist attack”? For years after 9/11 all we heard about was where they would strike next. How about us going to war with Iran? Very few people are even thinking about this anymore. So what are the fears d’jour? The Euro dissolving, where are the jobs going to come from, the deficit, etc. Take your pick.
Based on history, I humbly assert that at some point in the future, people won’t be worried about the financial crisis anymore. It will begin to feel like past history and something that is behind us. Investors will feel confidence in their financial systems and will invest in “normal” things (not overbuying things like cash, gold, and US Treasuries). Does it mean that bad stuff won’t happen between now and then? Who knows, but the point is that gold is a completely irrational long-term investment. I sorrowfully chuckle every time I see an advertisement hyping up buying gold… “It has quintupled in the past 10 years… it’s constantly setting record prices”. Folks, these are all reasons to get out of gold, not buy it.
Sometimes we hear the claim that people will eventually realize that dollars are worthless (because of a lack of gold backing) and that it only has the illusion of value. Yellow metal has some intrinsic value for commercial use, but that value is largely nothing more than the markets behaving like a large voting machine. Millions of people are voting on the price of gold, based less on supply and demand issues, but on guesses on future price. This is never a good way to analyze any investment.
I’ll leave you with a perfect quote from Warren Buffett, “You could take all the gold that’s ever been mined, and it would fill a cube 67 feet in each direction. For what that’s worth at current gold prices, you could buy all-not some-all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?”
For additional Wealth and Investment Management resources and articles by Chad, visit the GreenStar Advisors Investment Management website.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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Have you been to a grocery store lately or filled your vehicle with gasoline? It is increasingly expensive to put food on the table and the high cost of gas has most of us staying close to home. The concept of extra cash is practically nonexistent. However, many people have taken matters into their own hands and found creative ways to earn extra money part-time.
The internet is a great resource for finding work. The main obstacle to finding work via online searching is that when you search any engine for “earn extra money part-time”, you are going to be subjected to a list that’s a mile long. Not only will the result list be overwhelming in size, it will likely be peppered with sites promising huge earnings for doing next to nothing. Keep in mind that if an offer sounds too good to be true, it probably is not legitimate.
Don’t be sucked in by any claim that if you only buy a certain program on CD or an ebook you will be magically imbued with all the knowledge it takes to make your first million online. By the way, most of these programs promote “passive income” schemes which essentially means, you haul in crates of money and do nothing but sit back and watch it come in. Beware of job websites that bolster their credibility by mentioning “as seen on”; just because it has made it to TV, does not make a program or method legitimate. Avoid any “job opportunity” that requires you to make any sort of investment; these are not real job opportunities. This type of “opportunity” is bogus and not an offer of a job.
Be on the alert for any opportunity that requires you to give personal information such as social security number or driver’s license number. For your online job search, create an email account that you can quickly eliminate; use that address on your resume. There are many skilled predators trying to lure people into giving up private information in order to steal their identity.
Don’t be deterred by these alerts; there are honest, legitimate jobs available. The trick is to sort through the rhetoric and come up with the real offers. Use tried and true methods to decide which opportunities fit your skills and your needs. Are you a skilled typist? There are a multitude of online jobs in data entry, medical transcription, customer service, survey-taker, writer and editing. The list goes on and on. Do you love to shop? Why not get paid for it as a mystery shopper. Be a phone service message taker; use your foreign language skills to be a translator. In other words, use your current skills and interests to earn extra money part-time.
The key factor in finding a job that enables you to earn extra money part-time is research, research and more research.
Stephanie Everette is a entrepreneur who loves helping people solve problems.
Did you know that 95% of people fail at getting leads and cash-flow and I’ve found a way to resolve that problem. Click here if you want more information about: Earn Extra Money Part Time
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