We work hard for the money we earn. Most of it goes to taking care of our basic needs, keeping us comfortable, and giving us some pleasure in this wonderful life. What we manage to set aside we either invest, with the intention of generating a return, or save, with the intention of preserving that wealth for the future.
If you are going to set wealth aside for the future, why wouldn’t you want to generate a return on that wealth? Why wouldn’t you want to save capital to preserve wealth and generate a return on that capital at the same time? If saving and investing are different, why would anyone want to save at all?
If you’ve been listening to me long enough, you’ll know I’m not optimistic about the U.S. dollar. But still, I’m a strong advocate of keeping loads of cash. You need cash for day-to-day expenses, for emergencies when life doesn’t go according to plan, and my favorite reason to have cash is to take advantage of great deals when markets correct. I’ve been searching for some time for a solution to ease my worries and finally found one: EverBank.
Photo courtesy of: http://www.freeimages.com/profile/lasop
EverBank is, as it sounds, a bank. It is actually an integrated financial services company with banking, mortgage, and investment services. Based in Jacksonville, Florida, EverBank started in 1998 (with variants back as far as 1961). Apart from a guaranteed interest rate in the top 5% of competitive accounts, what makes EverBank unique is its WorldCurrency® accounts that make it easy to hold your cash in 18 different global currencies:
There is no safe investment. A company can go bankrupt, an economy can crash, and a government can destroy money. But that doesn’t mean you should pile all your cash into risky assets.
Photo courtesy of: http://www.freeimages.com/profile/ZoofyTheJi
I keep cash, gold, and stocks in our portfolio. Each has its purpsoe: gold to store value, cash to transact and invest, and stocks to make money.
Paper money can be eaten up by inflation and companies can go bankrupt, but gold is money. That is why everyone with wealth should always have some of it stored in hard, shiny bullion. But just like cash, you probably don’t want loads of it hanging around your house. To solve this dilemma, my favorite option is: Hard Asset Alliance.
(Source: Hard Asset Alliance)
Hard Asset Alliance, is essentially a trading hub for gold, silver, platinum, and palladium. Once you’ve opened a free account, you can buy any quantity (no minimums) of coins or bars either for delivery to your address, or for storage in secure vaults in one of five countries (United States, England, Switzerland, Singapore, or Australia). The fee for storing your gold is 0.5 to 0.7 percent per year; that’s no more than $70 per year for $10k in gold… really cheap for that kind of security. And you can sell or take delivery of your metal at any time.
I’ve been writing a lot about saving money, being productive to make more, and investing to further grow wealth. But why do I want to get wealthy? In short, I think good people being wealthy will dramatically change the world for the better. One reason is that more wealth gives you more time.
Merriam-Webster defines wealth as, “An abundance of valuable material possessions or resources.” Having an abundance of what you need (by saving), or the ability to get what you need faster (by making more or having more productive investments), means you’ll have to spend less time working.
Financial goals are an important part of our life. Whether saving for future purchases like vacations, or tracking our overall net worth as we work toward financial freedom, I use a personal balance sheet to track our progress.
A balance sheet is: “A statement of financial condition at a given date.” It’s a snapshot that shows you exactly where you are at any given moment. It’s a common term in corporate accounting, but is just as relevant for a person or a family.
One of the pillars of my investment portfolio is energy. Nothing is certain, but its hard to imagine any change in the course of our unstable economy that isn’t going to continue to demand energy.
Apart from gold and silver, and some land, energy is about the only place I feel any semblance of security at all. Gold and silver are a hedge against inevitable inflation, and a good bet on the future panic out of the dollar. But since I don’t know how long that will take I’m not one to keep all my eggs in one basket.
[Update] In 2014, we rolled Olga’s 401(k) into a Roth IRA with Interactive Brokers
and are very happy growing our money tax free.
My wife and I have been trying to decide if we should open Roth IRAs this year. The benefit of a “Roth” is that earnings grow tax free. It is a strong incentive, but I’ll explain why we decided against it for now.
Worldwide, governments are sitting on massive debts and grappling for ever-increasing market oversight, and people are starting to reach the limits of how much they are willing to be lied to, stolen from, and beaten down. All the while, we are in the midst of the greatest technological revolution since the printing press set off the Renaissance.
Managed funds did extremely well in 2013. Most getting double digit returns, and many getting 30, 40, even 50 percent! And yet it’s hard to find anything that remotely looks double-digit better, forget 50 percent better. How long can this divergence continue? Maybe for a long time, but the further it separates, the shakier the foundation.
If you put money into a 401k, you need to understand how that money is invested. Even better, there are ways you can manage risk in the present and dangerous market frenzy.
After several years working hard to get out of debt, I suddenly screamed through the light at the end of the tunnel and into the wide open spaces of freedom… only to find I wasn’t so free.
During those years, I spent a lot of time learning about the financial system (starting with a peaked interest from The Creature from Jekyll Island). The simple theme that seemed to re-occur is: in free markets, responsible people generally win; in controlled markets, responsible people generally lose.