# Tanking Dollar and Investing



## CJ (May 10, 2002)

With the dollar continually declining, I've been very leery of keeping so much cash in savings. Being in the RV fulltime, we can't stock up on food, etc, it just isn't possible.

We have discussed buying Euro's, gold, ammo... I'm against Euro's or currency of any type, because I think if the dollar tanks, so with the other major currencies. Personally, I believe the dollar will just go much lower and we'll live through high inflation for years. Which means the cash that we've been hoarding to build with won't be worth much.

I don't see buying gold, because it's at an all time high... Buy low, sell high.

Ammo I'm good with, except again, only so much you can store in an RV.

We bought our land (cash) 2 years ago, and our tractor (cash) this year. We have enough saved again to build the shell of the house, but no time to do so right now, nor do we really want to do so yet.

So... I've found a 52 acre piece of land we're thinking about buying to "dollar proof" our savings. We could pay cash for it, but it will completely wipe out our savings. Our current job contract runs out in April. By then, I think we could save enough again to live for 6 months if another job doesn't turn up (not overly worried about that however, hubby is in a high demand field), but not having any cash in the bank makes me pretty nervous.

We don't finance, so that isn't an option.

Opinions? Would you keep saving, or go with the land?


----------



## pancho (Oct 23, 2006)

I wouldn't like the idea of wiping out all of the savings. If you are set to invest in land you might look around for a smaller or cheaper tract and keep some in savings just for emergencys.


----------



## Gunga (Dec 17, 2005)

CJ,
No one can be sure how things will play out so it is important to be diversified. You already own some land so it may not be a good idea to put the rest of your savings into farmland.
Other options to protect yourself against declining dollar purchasing power are:
-investment grade diamonds 
-gold bullion coins
-silver bullion coins
-foreign currencies (the Swiss Franc is an option)
-ammo


----------



## MELOC (Sep 26, 2005)

quite a quandry. currencies can tank. ammo can go bad. land needs a buyer or barterer if it is to be cashed in and so does ammo. precious metals are high in cost now.

the land may lose some value, but i think it is a good choice. i think it could be more stable than precious metals if you have to buy them when they are high. personally, i wouldn't invest in more ammo than i could use myself.

diversifying seems to be a good strategy. have faith and buy the land. then buy some precious metals in time. another way to diversify may be to buy other tangible assets of value. certain tools may be a good option. guns won't go bad like ammo may, so maybe invest in more guns. this is off the wall, but perhaps you could start buying metals like copper and brass to stockpile. they are high too, but they will always be something you could sell easily if you need to.


----------



## elkhound (May 30, 2006)

dont get rid of the cash....period..you may need it one day.if all this inflation takes place(even more) it will be nice to have cash in a savings account.in the late 70's and 80's cash was tight for most people.if you had to borrow it you paid high interest rates on it.at that time just a simple passbook saving was paying 9.5%.i know a person that had a "little" savings at that time and was able to earn about half again what her social security check was with this simple interest coming in monthly.if you buy "things" includeing land you will have to wait on a buyer.i have seen a few homes right now that have been on the market for 2 years and they have lowered the prices to what they have in the house jsut to "get rid of it"they been paying monthly on loans and wont make any money on the land deals...and it may get worse.check out www.daveramsey.com he is a finacial wiz.IMHO he is the top finace guy in the country.practical easy steps to a more secure future.you got land and tractor paid for you and husband are far out in front of the game of life than most people are.if you had to you could put rv on property and live.when you live debt free you can be broke one day and get a job and have lots of cash saved fast in just a few weeks of employment.its easy to save money when you are debt free.....i like the view from this side of the tracks.....lol.....save,save,save....for the really important things in life.the 2 of you are doing great as i see it...dont wavier from the path you are on and continue to be a success and great example of "how to own land" by living simple and keeping the nose to the grind stone.


----------



## Texas_Plainsman (Aug 26, 2007)

elkhound said:


> dont get rid of the cash....period..you may need it one day.if all this inflation takes place(even more) it will be nice to have cash in a savings account.in the late 70's and 80's cash was tight for most people.if you had to borrow it you paid high interest rates on it.at that time just a simple passbook saving was paying 9.5%.i know a person that had a "little" savings at that time and was able to earn about half again what her social security check was with this simple interest coming in monthly.if you buy "things" includeing land you will have to wait on a buyer.i have seen a few homes right now that have been on the market for 2 years and they have lowered the prices to what they have in the house jsut to "get rid of it"they been paying monthly on loans and wont make any money on the land deals...and it may get worse.check out www.daveramsey.com he is a finacial wiz.IMHO he is the top finace guy in the country.practical easy steps to a more secure future.you got land and tractor paid for you and husband are far out in front of the game of life than most people are.if you had to you could put rv on property and live.when you live debt free you can be broke one day and get a job and have lots of cash saved fast in just a few weeks of employment.its easy to save money when you are debt free.....i like the view from this side of the tracks.....lol.....save,save,save....for the really important things in life.the 2 of you are doing great as i see it...dont wavier from the path you are on and continue to be a success and great example of "how to own land" by living simple and keeping the nose to the grind stone.


The dollar IS tanking http://quotes.ino.com/chart/?s=NYBOT_DX . If it continues going down, your dollar will be worth less. I wouldn't call gold and silver at an all time high. That's where I'd put my money. Wait until Katie Couric announces it on the tele and watch the sheeple start buying gold/silver.


----------



## Andy Nonymous (Aug 20, 2005)

CJ, this is only my opinion, and may be worth exactly what you paid for it, but in your shoes, I'd set up a pole building at your already paid-for 'homestead', and put most of your cash into the necessary building materials for your future home. The risk of theft is possibly substantial as desperate people look for anything of "real value" to barter for their 'needs', but the substantial risk to losing it all to hyper-inflation is just or more likely. Yes, precious metals are 'high', but from many analysts, the view is that they can go much higher yet - some claim 2k/oz for gold; more realistic may be 2/3 of that, depending on a lot of factors that we commoners will have no control of, such as potential confiscation.

Keep doing the research for yourself, discuss completely with your DH, and by all means be in agreement in whatever choice you make.

Good luch


----------



## Deacon Mike (May 23, 2007)

Just invest in this 

As for the previous poster's comments on Dave Ramsey, Ramsey has a solid no debt message, but his investment advice is garbage.


----------



## booklover (Jan 22, 2007)

Dh and I were talking about the tanking dollar just yesterday. I guess we're just going to have to wait it out and see where the chips fall in the next 10 years or so. It's completely not possible for us to take all of our investments and move them to something else, especially something like land. These are tough times. It has happened before and recovered... guess we're going to have faith in that. If it doesn't happen, we can still make ends meet, but it wouldn't be so nice. I don't have any advice because everyone's situation is different. At least our cash-rented land is in corn.


----------



## CJ (May 10, 2002)

I love all the feedback, it's great to hear perspectives from those at a distance, as it isn't always easy to look at your own problems/solutions and see them realistically.

We don't do the stock market, and we don't finance. Period. If we had the time, we would indeed take our savings and start building. We don't however, have the time. Make hay while the sun shines, and right now the money is pouring in with the best contract we've ever landed, in combination with super cheap living expenses where we are in the RV right now.

I don't think gold is a good value right now, it's too high, and b) you can't eat it. 

Ammo is like land, in my opinion. Always a good value because neither needs to be sold or exchanged for other goods to provide in rough times. Ammo means food (hunting) and land means food (growing). I'd not worry about selling either.

I agree with needing cash on hand. However, we have a large amount of cash on hand, and IF that dollar continues to slide (and I'm betting it will) we will have a mound of paper. Period.

We already have a large gun collection, stored at our parents.

Really the only things I feel safe with are things that are purchased to setup homesteading with. If we had a place to store them, I'd start buying things like a wood stove, solar panels, etc... more tools.

But those things are apt to be stolen. We did make the major tractor purchase this year, and are glad to have that done. 

Since we can't store a huge amount of ammo or any other homestead related stuff right now, land seems like the best idea to me. I'm not worried about it's resale value, if we buy another piece and wish to sell one of them later, that's okay if it holds its value (without tanking like the dollar could) but if it doesn't... we have plenty of family who will be able to use it. Either way, seems like a win win situation.

I guess I'm just not sure about temporarily wiping out the savings. LOL


----------



## turtlehead (Jul 22, 2005)

I'd consider Euros. 

If the dollar tanks, there's no reason to think the Euro will. In fact, the dollar going down means that other currencies go up in comparison.

If the oil people change their bookkeeping from dollars to euros, which they keep hinting they're going to do (but have been for years now), then the euro would skyrocket.

You lose some converting to euros, and you lose some converting back. So if you buy euros, plan to sit on them for a little while.


----------



## Aintlifegrand (Jun 3, 2005)

CJ said:


> I love all the feedback, it's great to hear perspectives from those at a distance, as it isn't always easy to look at your own problems/solutions and see them realistically.
> 
> We don't do the stock market, and we don't finance. Period. If we had the time, we would indeed take our savings and start building. We don't however, have the time. Make hay while the sun shines, and right now the money is pouring in with the best contract we've ever landed, in combination with super cheap living expenses where we are in the RV right now.
> 
> ...


I like the idea of land, I would spend the largest chunk of money on land. I would take what is left and diversify in all areas, some gold/silver, some cash on hand, and some investments ( I like the foreign currency in the short term...oil in the long term)


----------



## seedspreader (Oct 18, 2004)

Andy Nonymous said:


> CJ, this is only my opinion, and may be worth exactly what you paid for it, but in your shoes, I'd set up a pole building at your already paid-for 'homestead', and put most of your cash into the necessary building materials for your future home. The risk of theft is possibly substantial as desperate people look for anything of "real value" to barter for their 'needs', but the substantial risk to losing it all to hyper-inflation is just or more likely. Yes, precious metals are 'high', but from many analysts, the view is that they can go much higher yet - some claim 2k/oz for gold; more realistic may be 2/3 of that, depending on a lot of factors that we commoners will have no control of, such as potential confiscation.
> 
> Keep doing the research for yourself, discuss completely with your DH, and by all means be in agreement in whatever choice you make.
> 
> Good luch


My exact thoughts. Building materials... If it begins to come down on your head, at least you will be able to build while you are eeking out a living on your paid off land.


----------



## elkhound (May 30, 2006)

i know the dollar is deflateing some...that is why i said even more.but dont think for a minute the dollar will be worthless....even if oil companys go to euor's so what...why?? because here in the u.s. we do buisness on a personell level with our dollars.it says it is legal tender for all debts ,public and private.go take a euro and try to spend it in a store....lol..you cant.....we all are arm chair econimists...roflmao.from what you post on here you and husband are doing great.if most people weere honest about it they are probably a bit envious of what the 2 of you are getting accomplished so fast.you are a sucess and dont need much advice from anyone here or a private investor...you got it going on girl...keep it up and stop doubting the decisions the 2 of you have made and are making. you are far better off than most americans...most cant even scrape up $1000 which is very sad.bottom line is dont take advice from people who have yet to accumilate the wealth and holdings you guys have now...why??...becasue if they knew so much they would be owners of land and have cash and other investments just like you do .when i see a TV finacial advisor or investment advisor talking i want to know why he/she is working to earn money...if he knew how to make so much money why isnt he/she making money and living at there home or out on the lake???? did you ever think about that?? you are a success and keep up the good work towards living the dream of homesteading AND debt free lifestyle...pat yourselves on the back.


----------



## mbeaser (Jun 22, 2006)

You could always make a somewhat lowball offer on the land and see if you could keep some of the savings in reserve...

You could also consider installing a buried vault that could double as a storm cellar, if the land you already have is in an area where things can go underground. Then, you could secure other things in your "storm cellar."


----------



## CJ (May 10, 2002)

I guess we'll sleep on it some more.. LOL. It's a gamble right now, with this contract ending (again) in April. Likely, they'll offer to renew. But we always realize there's just as much chance we'll be without work for 3-6 months. Normally, that time off is MUCH appreciated. Just not if we've wiped out our savings!


----------



## charles burns (Mar 21, 2006)

Why don't you just leave it in the bank and stop worrying about it.

All the investment advice threads read to me like, _Hey! I have so much money I don't quite know what to do with it! What do you think I should do?_

Be real, your money is not going to devalue away. You're not going to buy a sack of gold, nor a semi trailer full of ammunition and you're not going to buy land on the advice of someone on a forum who doesn't even know where the land is.

My advice is don't take the advice of anyone on an Internet forum on what you should do with your money. Leave it in the bank and finance your life with it as and when you need it.


----------



## CJ (May 10, 2002)

It's already devaluing away, the dollar is dropping and the costs of good are increasing, how can you say it won't devalue? The bank is one place I'm not comfortable leaving too much in.

I'm not asking anyone to read a crystal ball, nor do I intend to blindly follow advice I get off the internet.

I however, enjoy hearing the opinions and suggestions of my peers, doesn't everyone? Otherwise, what are they doing on here to begin with?

I find it helpful to get a perspective that isn't mine. But thanks for your insight.


----------



## kinderfeld (Jan 29, 2006)

CJ said:


> With the dollar continually declining, I've been very leery of keeping so much cash in savings. Being in the RV fulltime, we can't stock up on food, etc, it just isn't possible.
> 
> We have discussed buying Euro's, gold, ammo... I'm against Euro's or currency of any type, because I think if the dollar tanks, so with the other major currencies. Personally, I believe the dollar will just go much lower and we'll live through high inflation for years. Which means the cash that we've been hoarding to build with won't be worth much.
> 
> ...



Do you need more land? If not, I'd use part of that savings to start building. Keep enough in savings to cover at least 6 months expenses.

None of this will mean squat if people are starving:
-investment grade diamonds 
-gold bullion coins
-silver bullion coins
-foreign currencies (the Swiss Franc is an option)


It's only valuable if people value it. In a severe depression, people will often work for food. Some homeless do that now.


"not overly worried about that however, hubby is in a high demand field."-Big plus.


----------



## amelia (May 3, 2003)

With the money supply increasing at a rate of over 14 percent a year, and with the Fed's recent actions, I think devaluation of the dollar is a pretty sure bet. Being nearly 100% in cash, therefore, probably makes sense only if it's a temporary position designed to stay clear of the turbulence that's likely to prevail over the next few months. As much as it goes against the grain for me, I don't see any good long-term alternative but to invest.

I second the idea of putting at least something into Swiss francs. Check out the CurrencyShares Swiss Franc Trust (FXF), for a simple and straightforward way of investing in Swiss francs. Once the Canadian dollar comes down a bit, FXC is likely to be another good bet.

Also, have you considered a foreign bond fund? My favorite is the Prudent Global Income Fund (PSAFX)--an unusually conservative, level-headed fund. Prudent Global invests about 70% of its assets in top-quality (mostly government) bonds of developed nations. It invests another approximately 17% in U.S. T-bills, and the reminder (about 8%) in gold-related assets. The annual report for this fund contains a very readable preface by fund manager David Tice, that is very revealing of his almost heretically conservative approach to investing.

The Permanent Portfolio (PRPFX) is another favorite of mine. The "scaredy cat's" choice of funds, it's modeled after the imminently conservative investment philosophy of the late Harry Browne, as set out in his classic little book, "Failsafe Investing." The basic idea is that by investing in a mix of asset classes having negative correlations to one another, you can create a portfolio that brings in modest, consistent returns with minimal volatility no matter what economic climate prevails: prosperity, inflation, deflation, or hard money. If you're interested, I'd get a hold of Harry Browne's book--it's a very easy, one-evening read. You might like the fact that the fund has approximately 25 percent of its assets in gold, yet because it is well diversified, you'd get the benefit of that asset class without having to buy in at an all-time high. The fund would also give you protection against the very real prospect of a significant pullback in gold.

All in all, the best way of staying safe is to diversify, diversify, diversify.


----------



## Texas_Plainsman (Aug 26, 2007)

amelia said:


> With the money supply increasing at a rate of over 14 percent a year, and with the Fed's recent actions, I think devaluation of the dollar is a pretty sure bet. Being nearly 100% in cash, therefore, probably makes sense only if it's a temporary position designed to stay clear of the turbulence that's likely to prevail over the next few months. As much as it goes against the grain for me, I don't see any good long-term alternative but to invest.
> 
> I second the idea of putting at least something into Swiss francs. Check out the CurrencyShares Swiss Franc Trust (FXF), for a simple and straightforward way of investing in Swiss francs. Once the Canadian dollar comes down a bit, FXC is likely to be another good bet.
> 
> ...


I've read, in a couple of places, that the increase in cash is more like 50%. This happened when the fed reduced interest by a half a point. That interest WAS for overnight loans only. Now, it is good for up to 60 days. I think the worst place to keep money is in the bank. My pastor has a good saying, concerning money, "if you can't get it in 15 minutes, it's now yours".


----------



## MELOC (Sep 26, 2005)

the more i think about the idea of metals as an investment, the more i like it. sure, it would be bulky, but who could steal it all at once. imagine yourself with ample amounts of copper pipe and brass, aluminum and stainless steel bar stock. these would all be highly priced items and desirable to have if the economy went bad.


----------



## charles burns (Mar 21, 2006)

Unfortunately I'm lacking in the insight department. I was however, born cursed with the burden of common sense. 

The dollar is going nowhere in a hurry. This is a wealthy country and it's not going to stop being a wealthy country any time soon.

Other people's perspectives - you don't even need to ask, the answers are going to be, buy sacks of gold and bury it (diamonds is a new one though essentially much the same) and a string of passionate though contradictory investment advice from people who enjoy the world of finance and economics. Advice you are bound by common sense to not act on.

How about with half the money you buy land that boasts a cave. With the other half you buy gold, silver, diamonds, aluminum and copper and hide it all in the cave. You make a map on old parchment indicating the whereabouts of the cave and you take it to a Swiss bank and put it in a safety deposit box with some Swiss francs and a box of Swiss chocolates.

How much money have you lost by having it in a bank anyway?


----------



## amelia (May 3, 2003)

charles burns said:


> Other people's perspectives - you don't even need to ask, the answers are going to be, buy sacks of gold and bury it (diamonds is a new one though essentially much the same) and a string of passionate though contradictory investment advice from people who enjoy the world of finance and economics. Advice you are bound by common sense to not act on. . . How much money have you lost by having it in a bank anyway?


I'd respectfully disagree with the implication that those of us who have entered the world of investment are economic wonks "who enjoy the world of finance and economics." Oh, how I'd rather be working in the garden! Unfortunately, many of us have _forced_ ourselves to learn about investing because the alternative is to accept a guaranteed loss of our nestegg at a real rate of over 10 percent per year. Do the math: The first year, $100 put in a savings account becomes $90; the second year it becomes $81; the third year it becomes $73; the fourth year it becomes $66; the fifth year it becomes $60; the sixth year it becomes $54; and the seventh year, it is more than half gone. Now think about that in terms of your anticipated life expectancy. It ain't a pretty picture.

Regarding the giving of "advice," I don't think that anyone here intends to do that. I would hope that no one would act on anything suggested here without doing their own due diligence.


----------



## stanb999 (Jan 30, 2005)

CJ,

I really like land as a store of value..... But.
You were saying the other week about moving to PA. You may not be in the area to maintain it in a short time. I beleive that land not kept is a net loss in value. For example. If you purchase a hay field that isn't mowed it will revert to other less desirable growth in a short time. Now if you have the time and energy to maintain property and make it pay for it's self as far as taxes and such I say go for it. Land isn't a "low" cost investment as it mostly appreciates in value at a rate slightly higher than that of input costs.

Just something to consider.


----------



## stanb999 (Jan 30, 2005)

charles burns said:


> Unfortunately I'm lacking in the insight department. I was however, born cursed with the burden of common sense.
> 
> The dollar is going nowhere in a hurry. This is a wealthy country and it's not going to stop being a wealthy country any time soon.
> 
> ...


Keep your cash as such and we will see who profits. I am of the belief that the dollar will tank. As you said above we do spend our dollars here. So in some things the dollar price won't matter. But you are very short sighted to not take imported goods into account. We import vastly more than we did just 20 years ago. Think the Crystler v/s the GM walk of out today. We have decided that it is much easier to import than produce. This is true as long as the dollar maintains it value. Once it fails it will be a sad day indeed. 

We import over half our food, all our clothes, most of our wood, electronics, heck even now our gas. I just don't see a rosy picture for imports to continue with no production of our own.


----------



## Texas_Plainsman (Aug 26, 2007)

charles burns said:


> Unfortunately I'm lacking in the insight department. I was however, born cursed with the burden of common sense.
> 
> The dollar is going nowhere in a hurry. This is a wealthy country and it's not going to stop being a wealthy country any time soon.
> 
> ...


I've lost quite a bit. I began buying silver three years ago for $7/ounce. It's now $13.50. The most I can get from a bank is about 5%. When interest rates SHOULD go up, the fed steps in to bail out their buddies who have made unsound investments. Americans, seemingly, operate on the principle that the "everything will be okay". That might work for you but not for me. We are now the largest debtor nation on earth. Over 2250 jobs are exported out of our country daily. At the end of 2005, the FDIC had $48 billion to insure $3.87 trillion. IMO, common sense dictates that the party is coming to an end.


----------



## Old_Grey_Mare (Feb 18, 2006)

Having just spent the last year fixing up our country place my advice would be to invest in infrastructure on your land. Well, road, fences, outbuildings--these are all things that you will need eventually and with the dollar losing it's buying power, they will cost more later than they do now. 

Mary


----------



## CJ (May 10, 2002)

Investing in building/infrastructure on our existing land would easily be our choice to "invest" our dollars in, if that were possible for us. However, it just isn't. 

It's the same with us as everyone else, we've either got the time or the money, but never both at one time.  Right now we're blessed with a good income, and no time to speak of.

I feel "safer" with our savings parked in land rather than cash. If we choose to buy this property, we'll likely leave one of them sitting until later, then sell it... or keep it either way.

As for PA... we recently had 2 job offers, one for Cranbury PA, the other for China, both from Westinghouse. After a lot of thinking and examining both finances and dreams, we decided to decline both of them and stay contracting. For us, for now, that's where the money is, even though it means living in an RV, which can get very old.

I can go back to our land and keep up with the brush hogging, that's not a big deal, since my parents live in the area and I can stay with them while I do maintenance on our land, even when my husband can't get away.


----------



## Ohiogal (Mar 15, 2007)

I've been thinking about this post, and here is what my take is on it. This affects me too - since apparently inflation is ramping up and I do believe that this latest correction of the interest rate was absolutely the wrong thing to do!!!
When my folks went through the Crash of '29 and the Great Depression, the only things that sustained them were 1) no debt and 2) having a skill that is "saleable" - such as plumbing, growing food, sewing, hair cutting, etc. My father once said to me that my grandfather and grandmother made it through the GD by having a savings account - which they lived off of - and having no mortgage. They had a car that sat for 6 years in the garage because they did not have money for gas to drive it. So, if it were me (and it is) I'd have my land and where I lived paid for, some cash put back to pay taxes - you can go without insurance but the local municipalities are going to still get you on taxes. As a matter of fact, they are not going to be able to -raise- your taxes if land prices drop due to a Depression. It won't fly - they'll take a cut like everyone else. Have your bases covered on food too - store enough to get through the winter seasons and grow a garden in the summer. Other than that, the stock market will go where the other currencies go because its a global economy now. If that tanks, then everyone's does and yes, if it converts to the Euro, those who have investments that are diversified enough are going to make it through and probably be doing good on the other side. I'd invest in funds that are based on federal bonds and "necessary" industries like energy and food. Other than that, stop spending on borrowed money and convince yourself that its not all about image, but survival.


----------



## Aintlifegrand (Jun 3, 2005)

Ohiogal said:


> I've been thinking about this post, and here is what my take is on it. This affects me too - since apparently inflation is ramping up and I do believe that this latest correction of the interest rate was absolutely the wrong thing to do!!!
> When my folks went through the Crash of '29 and the Great Depression, the only things that sustained them were 1) no debt and 2) having a skill that is "saleable" - such as plumbing, growing food, sewing, hair cutting, etc. My father once said to me that my grandfather and grandmother made it through the GD by having a savings account - which they lived off of - and having no mortgage. They had a car that sat for 6 years in the garage because they did not have money for gas to drive it. So, if it were me (and it is) I'd have my land and where I lived paid for, some cash put back to pay taxes - you can go without insurance but the local municipalities are going to still get you on taxes. As a matter of fact, they are not going to be able to -raise- your taxes if land prices drop due to a Depression. It won't fly - they'll take a cut like everyone else. Have your bases covered on food too - store enough to get through the winter seasons and grow a garden in the summer. Other than that, the stock market will go where the other currencies go because its a global economy now. If that tanks, then everyone's does and yes, if it converts to the Euro, those who have investments that are diversified enough are going to make it through and probably be doing good on the other side. I'd invest in funds that are based on federal bonds and "necessary" industries like energy and food. Other than that, stop spending on borrowed money and convince yourself that its not all about image, but survival.



You're a smart gal...


----------



## charles burns (Mar 21, 2006)

When we talk about _losing_ money what are we actually talking about? Are we talking about if I put $100 in the bank and a year later it has become $105 I have lost money because if I would have bought gold it would now be worth $120? As in I have _lost_$15.00

And my $105 dollar buying power of last year will only buy goods to the value of $95 this year therefore I have _lost_ $10.00? 

This isn't _losing_ money, this is not making money. This is about profit. This is about I want my money to increase, become more.

If I choose the _loss_ and work in the garden, happily, content to see inflation edge ahead of an interest rate on my bank savings how bad off am I for the loss of money bearing in mind I'm where I want to be, happy and content.

If I choose not to work in the garden and force myself into the world of finance and investment because I worry about the loss of money, how better off am I in terms of quality of life.

What do the math look like when comparing a high stress career with contentment. If I stress myself into an early heart attack and survive it what are the math on the cost of future medical bills against the loss of low interest rate.

Cash v Profits could be a 95 year old with not a lot of money sitting on the back porch v a dead 55 year old with lots of money. Who's the winner? Who's richest?

My problem with the money, money, money threads are that they are too heavily weighted in the negative relative to real life.

At the investment level I see greed. 

At the economic collapse, end of the world level I am short sighted. Legally blind may be a better description. My actions are based mostly on the past and the present. I've lost count of the times I've heard the economy is about to collapse (on two different continents), seen the proof, done the math, it never has. I can't put an argument up that suggests we have a healthy economy - it looks a little grim at the moment, but I do know that the standard of living today has never been better, that generally speaking people in this country are very wealthy and that living in this country is not even close to expensive. This society is so far away from economic depression eye surgery and binoculars aren't even going to get me a glimpse of it.

I'm not posting to criticise any one person, I'm posting in favour of the positive, because there is positive and no one is mentioning it.

_What does it profit a man if he gain the world and lose his soul?_ (ya know, I think that's a biblical quote.)


----------



## Blu3duk (Jun 2, 2002)

If inflation worries you, and you are feared the at gold is going to drop [and it will go up and down making some people have ulcers] and you fear that thieves would visit your property where you would store anything you purchased [that tells me you purchased in the wrong area, but who am i to say it happens here too, though not often], how bout buying what you need now for delievery next spring in April? lock in a price on certain goods with delivery now, if inflation takes away some buying power, you are ahead [Alan greenspan put this years inflation rate at a solid 5% already and likely to raise next year as well] fuel gets higher and the delivery cost will increase except that you already locked in and paid now for delivery later..... using the business you bought from as a secured storage facility... talk to the manager, some may not even be willing to do this and you could lose if the business goes under before they deliver your goods....

anyhow it is a possible solution to your savings/investing problems. 

My personal take on precious metals are they will continue to rise if not stay fairly stable in along current prices, for the simple reason more metal are being used overseas in China in many products they are now consuming internally as well as shipping out to the world. The PGE's [platinum group elements] are in higher demand as the new standards for catalytic converters have higher amounts used to keep emissions in check.... Silver has been kept low in proportion to gold as the countrieds who owe the IMF have been payig off in Silver but those debts are about squared off and the price has been creeping up.... a new mine by the Courdelene Mines in Bolivia if opened n time this next year will produce around 14 million ozt per year which will help in keeping the price stable in the lower values for awhile as well as a few older mines getting geared up to open and run as silver hits the $13-15 mark as it is then profitable to re-open and run for awhile even if the price goes down they can operate once they get back going......

My take on the price of land is that it MAY drop in the next few months by as much as 60% in valueation as lending institutions get harder to deal with and take more land back than they can handle and have to peddle it themselves, making it harder to keep the price where most folks are buying now.... it is sharp double edged sword the banksters are walking now, if they forclose on to many properties at once, they will drop the values of those who are trying to sell before foreclosure, as well as the price on newly constructed buildings.... making all the harder to re-coup their losses incurred from taking a property in foreclosure.... So personally i would hold off on buying more land that i was only purchasing for an investment to peddle in the next couple years.... i would buy it if adjacent to my original property to have a larger chunk of ground from which to etch out a sustainable farmstead with.... 

Another option on the buy now is to buy a used semi van [40 feet] and put your solar panels, wood range, and tools and such in there that are not in need of heat but are in need of being kept dry.... park it in a local trucking terminal with security and pay a small storage rental, then sell the van when you no longer have a use for it and it has been emptied..... 

There is more than one way to skin a cat, but no matter which way you choose the cat dont like it much.

*"The function of money is not to make money but to move goods. Money is only one part of our transportation system. It moves goods from man to man. A dollar bill is like a postage stamp: it is no good unless it will move commodities between persons. If a postage stamp will not carry a letter, or money will not move goods, it is just the same as an engine that will not run. Someone will have to get out and fix it. - Henry Ford, Ford Motor Co *


----------



## stanb999 (Jan 30, 2005)

charles burns said:


> When we talk about _losing_ money what are we actually talking about? Are we talking about if I put $100 in the bank and a year later it has become $105 I have lost money because if I would have bought gold it would now be worth $120? As in I have _lost_$15.00
> 
> And my $105 dollar buying power of last year will only buy goods to the value of $95 this year therefore I have _lost_ $10.00?
> 
> This isn't _losing_ money, this is not making money. This is about profit. This is about I want my money to increase, become more.


I agree with the rest of your post for the most part.

When you take the 100.00 and put it in the bank you get 2% interest. so the numbers are more like this.

year one.......
you put 100.00 in you get 102.00 in dollars.
but the inflation rate is really around 8% right now is comparing apples to apples.
So this leaves you 93.84 in purchasing power.

The next year you have 104.04 in that account. But the inflation rate is again the same so.
you now have 88.05 in real purchasing power. So in the two years you "hobbied" you lost slightly less than 12% of you money.

this isn't nearly as bad as if you take taxes into account.........

Say you have 100,000.00 in the account. You can buy CD's with a "good" return....... 5.5% or so right now.

So the first year you make 5,500 but you get taxed so it's 4675
so you now have 104675. Yeah!!!
but it's worth 96301.00

the next year 
Even better you made 5757.12 but you again pay tax so you have 4893.55 in "profit" so your grand total so far is 109568.00 you say great I made almost 10 grand.......
But it's purchasing power is 92783.82 So reall you lost about 7,200 of your money.
I used 15% as the tax rate.


----------



## sgl42 (Jan 20, 2004)

CJ said:


> I don't see buying gold, because it's at an all time high... Buy low, sell high. [....]
> 
> ... a 52 acre piece of land we're thinking about buying to "dollar proof" our savings.


 My personal opinion is we're in a real estate bubble that's popping. Altho primarily a residential bubble, lots of rural land prices went up because of its potential for becoming subdivisions. So, unless the land you're thinking of buying is so far from any area affected by the bubble that the price hasn't risen much, or unless you can potentially earn a real return on it from agriculture, my guess is that it won't hold it's value very well on an inflation adjusted basis.

To give you an idea how todays residential real estate bubble compares to the bubble in the late 1980s/early 1990's that wiped out the S&L's, see the following chart and its accompanying article:

(Note: the following is residential real estate, not agricultural.)


> http://www.rgemonitor.com/blog/roubini/143855


 Re: gold being "all time high"
Yes, gold is near an "all time high" in nominal terms, but that doesn't account for inflation. The following chart (and accompanying article) shows gold on an inflation adjusted basis (CPI):



> http://www.zealllc.com/2007/cpigold2.htm


 Personally, I believe CPI grossly understates inflation, which would make the current gold price even cheaper. Here's a chart of what the current inflation rate would be if it was measure the same way as it in the Pre-Clinton years:



> www.shadowstats.com


--sgl


----------



## CJ (May 10, 2002)

We're headed home tomorrow and plan to spend the afternoon hiking over this piece. My parents spent 3 hours walking it already to preview it for us (they've walked many properties with us and can nail it 90% of the time if we'll want the piece) and they're so excited over this piece they've offered to chip in on it.

Land prices in southern MO HAVE gone up, significantly. However, it's still mostly under $2k an acre, so I don't think there's much room for it to "fall out" like the rest of the country.

We'll likely make up our mind this weekend.


----------



## Deacon Mike (May 23, 2007)

While Shiller's chart certainly _appears_ alarming it may not be as bad as it looks. Inflation adjusted 100 in 1890 to 200 in 2006 is only an ANNUAL real return (after inflation) of .6% (that's 6 tenths of 1 percent). 

Granted, the chart does not show a smooth updward glide, but Shiller does not state why the price should stay at 100.


----------



## sgl42 (Jan 20, 2004)

Deacon Mike said:


> ...but Shiller does not state why the price should stay at 100.


Shiller doesn't make the claim it will go back to 100. Like many indexes, it arbitrarily chooses a starting year and makes that value "100", making it easier to compare percentage changes for the time period.

Real estate was much "cheaper" between WWI and WWI. I'm sure in 1920 that a lot of people were expecting land to rise to get "back to normal" (ie, 1900-1910 pricing) and it didn't. And I'm sure that many that looked at real estate prices in 1950 thought they were in a huge bubble, expecting them to revert the the between-the-war prices, yet they've stayed at about that level ever since then.

It's possible that this current increase is a new level, similar to the increase after WWII, that's a "permanently high plateau". We won't know for another decade if that's true or not. 

Each person has to make their own judgement of what will happen in the future. Shiller is predicting prices will decline, although I don't know whether he's predicting it will get back to 100 on his index. I can't remember his actual prediction, but I think it's a 30% or 50% decline. And it's already happening in some areas -- eg, Miami condos are about 50% reduced right now. (Of course, obviously land in the midwest is radically different than Miami condos.)

I don't know what Shiller used for his inflation adjustment. (I don't think CPI hasn't been available the entire time period.) If he used CPI for the last decade, and CPI understates the real inflation as I suspect, then his index would be overly high. ie, todays value around 200 would be lower, and therefore less bubbly.

Also, I presume his index is population weighted, and since california, florida, and new england have large populations and the the highest price increases recently, his index would reflect that. If he'd made a separate index for the midwest, I'd guess it would be significantly lower, as most of the middle of the country has had far less price appreciation over the last decade than the coasts.

Commodities have been depressed for about 20 years, ending in 2001 or so. Wheat has gone up 3x in the last several years. Most commodity cycles last 15-20 years at least. So chances are that farmland will rise over that time, as the income earned from farm products rises. Hence, a residential index is very different than an agricultural index of farmland prices.

My point in putting up the charts was to make people think about what they're really betting on, and whether they're at the end of trend or the beginning of a trend. Too often I see "real estate only goes up", and "they're not making any more land" as the entire thought process. I lot of people across the country are going to pay dearly for that lack of critical thinking. And similar with gold. Most people ignore it completely right now, or think it's too expensive. 

My prediction is within about 10 years, gold stocks and commodities trading will be the cocktail party chatter, like tech stocks were in 2000, and real estate was 2 years ago. People will be lined up around the block to buy gold coins, the same way they camped out overnight to get on a list to buy a miami condo, or rushed into buying the IPO of a tech stock. No one will be talking about residential real estate, or consumer stocks. 

That will be the time to sell your gold and gold stocks (assuming you bought some before then) and begin buying what everyone is ignoring, which will probably be residential real estate. 

--sgl


----------



## CJ (May 10, 2002)

We just came back to the RV after spending the weekend in MO. Decided not to purchase the land, but to go ahead and try and find some available time to start building on our existing land. We're going to shoot for having the driveway put in and the well before the end of the year, and finalizing our house plan (at least the size and location). Hopefully we can get the plan finalized by this time next year, and go ahead and have the frame done.


----------



## Explorer (Dec 2, 2003)

sgl42 said:


> My personal opinion is we're in a real estate bubble that's popping. Altho primarily a residential bubble, lots of rural land prices went up because of its potential for becoming subdivisions. So, unless the land you're thinking of buying is so far from any area affected by the bubble that the price hasn't risen much, or unless you can potentially earn a real return on it from agriculture, my guess is that it won't hold it's value very well on an inflation adjusted basis.
> 
> To give you an idea how todays residential real estate bubble compares to the bubble in the late 1980s/early 1990's that wiped out the S&L's, see the following chart and its accompanying article:
> 
> ...


You deserve a gold star for this prediction. What is your current view?


----------



## tab (Aug 20, 2002)

Can you hire work done? Maybe a small building? That way you are increasing the value of your current investment.


----------



## InvalidID (Feb 18, 2011)

CJ said:


> I love all the feedback, it's great to hear perspectives from those at a distance, as it isn't always easy to look at your own problems/solutions and see them realistically.
> 
> We don't do the stock market, and we don't finance. Period. If we had the time, we would indeed take our savings and start building. We don't however, have the time. Make hay while the sun shines, and right now the money is pouring in with the best contract we've ever landed, in combination with super cheap living expenses where we are in the RV right now.
> 
> ...


 To me it also depends on the type of land you want. Is it pasture land? Timberland? What kind of timber is on it? Don't forget property taxes.

There are decent ways to make a buck on land you aren't using. Rent it to a farmer for pasture. Is it timberland? How about a hunting lease? Heavy pine forest could be leased out to a pine straw crew.

No matter what's there, besides swamp, there is likely to be a way to at least have your taxes paid. But if you can make a few bucks in the process maybe you can use it to supplement future purchases. 

As with all advise, your mileage may vary.

And of course I jumped in before I finished reading the thread. Now reading that you turned down the land I suppose those questions above are invalid.


----------



## AngieM2 (May 10, 2002)

Note that this is a thread started 2007, recently brought to the front. Just be sure to view this with that knowledge.


----------



## ihuntgsps (Mar 10, 2008)

Thank you Angie for piointing out the thread is three years old. I am curious how the OP invested and how it played out? Did you get the job in Cranberry PA (Nice area...I am orig. from Oil City). Curious to see if there is something to be learned from what you did, or did not, choose to do with your savings.
Always try to learn as much as I can from other people.


----------



## tab (Aug 20, 2002)

Thanks for pointing out the date. I should have looked when someone said silver is at $13.00 an once as it is now about $34.00.
It would be nice to know how the op is doing, believe it is someone that still posts.


----------



## machinist (Aug 3, 2010)

I would NOT buy more land now. I don't expect land to appreciate much for some time yet. You already have land. Pay someone to build you a GARAGE. A lockable garage. Make sure you get drains and water line passages roughed in it, too. Then you have a place to store stuff, and it will be part of your new home anyway, right? Have a contractor just do the shell, to save a little, then finish it when time allows. 

OR, hire a contractor to put up a pole building for your future homestead needs. You need a place to park that tractor out of the weather anyway! :grin: Just build it in a manner that is resistant to break-ins.

That building material is NOT going to get any easier to afford, whatever the price does.


----------



## InvalidID (Feb 18, 2011)

Wow, three years ago people thought Gold and Silver were too high.... Ok ok, I stopped buying after silver hit 18... D'Oh


----------



## kirkmcquest (Oct 21, 2010)

Yeah people were dumb back then.


----------



## CJ (May 10, 2002)

We did buy some land (not that piece, but another 60 acre parcel). However, my hubby's contract here in AR has been extended so many times, they now consider him a permanent employee, even though he's a contractor. We bought a home on 5 acres here shortly after buying the land in MO. 

We did finance the home and 5 acres, but paid it off just short of 3 years. I think I mentioned in the OP that we don't finance, but we wanted to keep that acreage and the RV... just in case.

We really struggled with living so close to town and on such a small piece, after always being out on a farm with complete privacy. Then one day (which was pretty darn recent!) we woke up and realized we rather liked being so close to town, and in the 3 years we've been here, we've established an orchard, gardens, and the orchard is being fenced next week for chickens, and we're going to start raising rabbits... and over the next year we hope to fence the back 3 acres (wooded, hilly ground) and maybe get a couple of milk goats.

So... I think we might just stay put. And leave the acreage back in MO to the kids one day  Both places are paid for, and life is pretty good 



ihuntgsps said:


> Thank you Angie for piointing out the thread is three years old. I am curious how the OP invested and how it played out? Did you get the job in Cranberry PA (Nice area...I am orig. from Oil City). Curious to see if there is something to be learned from what you did, or did not, choose to do with your savings.
> Always try to learn as much as I can from other people.


----------



## TnAndy (Sep 15, 2005)

CJ said:


> With the dollar continually declining, I've been very leery of keeping so much cash in savings.
> 
> 
> 
> *I don't see buying gold, because it's at an all time high...* Buy low, sell high.



The price of gold and the 'value' of the dollar are inverse. 

IF you believe the dollar is going down ( and I do ), then you should understand the price of gold will simply continue to climb in dollar denomination. I've been hearing "it's high" since it was 500 bucks.

Land can be a great investment, especially if you can live on and work it.

But gold is about as liquid as it gets....it's actually MONEY, compared to the currency we use.


----------



## Blu3duk (Jun 2, 2002)

Thanks for the update!! 

It is good to see old threads revisited too btw!

William
Idaho


----------



## ladybug (Aug 18, 2002)

I would look around for suitable land that won't wipe out your savings and purchase that instead. That way you can have some land and still have a safety net in savings so you aren't broke on cash. I've thought about investing a few dollars each week in buying nickels (just regular rolls from a local bank) as sometimes you get some old silver ones in the batch. Plus I like to save all my change and when it's in the change bin it is "out of site out of mind" so to speak. =D


----------



## cmcon=7 (Mar 7, 2010)

Andy Nonymous said:


> CJ, this is only my opinion, and may be worth exactly what you paid for it, but in your shoes, I'd set up a pole building at your already paid-for 'homestead', and put most of your cash into the necessary building materials for your future home. The risk of theft is possibly substantial as desperate people look for anything of "real value" to barter for their 'needs', but the substantial risk to losing it all to hyper-inflation is just or more likely. Yes, precious metals are 'high', but from many analysts, the view is that they can go much higher yet - some claim 2k/oz for gold; more realistic may be 2/3 of that, depending on a lot of factors that we commoners will have no control of, such as potential confiscation.
> 
> Keep doing the research for yourself, discuss completely with your DH, and by all means be in agreement in whatever choice you make.
> 
> Good luch


This

Concrete blocks are very energy intensive to make,move, market, and very low on crack heads quick cash scanner.

You might look at starting your orchard now, fencing would be a good investment too.

buy What you know you will need and what does not deteriorate.


----------

