What's the incentive for converting currency to gold or silver?

[Organic Damage]

I've always figured that if the doomsday scenario ever happened, gold would actually be a pretty bad investment compared to a bunker stocked with firearms and canned beans.

In a real doomsday scenario it seems like you'd be better off stockpiling bullets.

 

[KBE6EKCTAH_CCP]

"saves money" is not the same as cash producing. A house is not an income producing asset, it's actually more like a liability. You have to factor the upfront realtor and bank origination fees, insurance, taxes, maintenance, interest on the debt, etc. Homes cost money just like renting costs money. If it was such a great investment Americans would have savings instead of a bunch of debt.



Corporations go bankrupt all the time. Look at GM, American Motors, Studebaker, De Soto, Plymouth (that's just naming car companies). And keep in mind, for that "stability" you get very low yield. 2% is just not cutting it when inflation is giving you a negative yield. Why do you think so many state pensions and retirement funds are always caught up in investment scandals? They're looking for yield! Puerto Rico is a good example.

Personally I think most, if not all major investment schemes are scams. Just my opinion. When you crunch the numbers it's just impossible to get rich or even relatively wealthy, and most of the time you're making a manager, bank, or realtor rich in the process. I think the formula to get rich never changed - real income producing assets that grow independent of your time. I.e. a business that you can scale.

If you buy a house all-equity you will have less monthly charges than you would have to pay rent, so that is cash producing when you are budgeting a decision.

Of course I agree that the yield granted from top assets such as blue chips sucks a load of a$$. But yields are so low currently, that it is the price to pay for a secure asset.

As for the formula to get rich, you are right it never changed : take on a bunch of risk. It is the only way. Buy gold on margin. Short the euro on margin with a 1/200 leverage. or whatever other clever shit. But that's like going to the casino and be ready to get wiped out overnight.

But getting rich was never the topic of this thread. I don't know how to get rich. But i know one or two things about the "less bad" things that you can do with your money. And again, one of these things is to invest in a diversified basket of rock-solid corporations.

 

[mixmastermo]

Thanks for the input. I think a diversified portfolio is the best option.

By the way I noticed no one said anything about silver, what's the deal.

 

[Sir Galahad]

If there's a zombie outbreak, gold is God. Paper currency becomes worthless.

 

[Phlog]

The point of gold is that it survives the collapse of your countrys currency.

Caring about money is pretty crass anyway.

 

[Long Dark Blues]

I've been collecting coins and precious metals as well as metal detecting since I was a kid in the 90's. I worked at my grandfather's coin shop for 20 years, starting at 10 years old, buying and selling coins, collectibles, and metals.

Just last week I sold $250 (500 coins total) in face value of 40% silver Kennedy half dollars and was cut a check for $1125.

That is the incentive.

Buying gold and silver outright will certainly act as a store of wealth, but the real profits are in coins.

 

[ralphc1]

I've always figured that if the doomsday scenario ever happened, gold would actually be a pretty bad investment compared to a bunker stocked with firearms and canned beans.

Exactly! You can't eat gold. If gold is worth anything, somebody will just take it instead of trading it for food. Gold is mainly used for unnecessary things like jewelry because humans, like many other species, like shiny things. If the economy goes to hell because of some calamity, people won't be buying gold grills, chains, watches and jewelry. Commodities are only worth something if there is a demand for it.

Over the last 30 years, guns and ammunition would have been a good investment. Guns that cost $250 now cost $1000. Ammunition prices are also way up if you can even get any. Of course food will always be useful. If you lose your job you can eat the food. If everybody is short of food, you won't have to try to swap gold for food. Of course if people know you have food and they don't, they will want yours and try to take it. You would need an army to protect it and even more food to feed them. In reality, anything but a short term disaster will not be survivable, especially if there is no law enforcement.

 

[Krav McGraw]

"saves money" is not the same as cash producing. A house is not an income producing asset, it's actually more like a liability. You have to factor the upfront realtor and bank origination fees, insurance, taxes, maintenance, interest on the debt, etc. Homes cost money just like renting costs money. If it was such a great investment Americans would have savings instead of a bunch of debt.



Corporations go bankrupt all the time. Look at GM, American Motors, Studebaker, De Soto, Plymouth (that's just naming car companies). And keep in mind, for that "stability" you get very low yield. 2% is just not cutting it when inflation is giving you a negative yield. Why do you think so many state pensions and retirement funds are always caught up in investment scandals? They're looking for yield! Puerto Rico is a good example.

Personally I think most, if not all major investment schemes are scams. Just my opinion. When you crunch the numbers it's just impossible to get rich or even relatively wealthy, and most of the time you're making a manager, bank, or realtor rich in the process. I think the formula to get rich never changed - real income producing assets that grow independent of your time. I.e. a business that you can scale.

A house is easily an income producing asset if handled correctly. I know real estate investors who are disgustingly wealthy.

There's no better hedge against inflation than stocks and real estate. Also, no better return on money than these two unless you go very high risk.