206 replies to this topic

[bishmasterb]

Intelligent? Plan for happiness? It sounds so.... sterile.

To not further obfuscate the issue we should probably put "intelligence" aside. There are lots of "intelligent" folks with "intelligent" plans and broke. We could get into the whole emotional intelligence discussion, but then we're off on a serious tangent. That would be more of a philosophical description of afford rather than a financial one.

I'll put this one forward with the full knowledge that it's full of holes, but expands a bit on "ability to buy"

- Afford: The ability to buy ____ without becoming further indebted (this one would at least meet Chip's "pay cash" approach without financial shenanigans - that is, borrowing to have cash on hand)

or a much more stringent definition

- Afford: The ability to buy ___ without becoming further indebted or reducing your
a. existing savings
b. existing expenses
c. existing assets?
d. net worth?

Hmmm....any purchase you make or avoid moves your net worth along a number line. I only care where that number is as it affects my happiness, now and in the future.

I purchase things that I believe will improve my overall happiness/wellbeing. If having the money in "savings" will make me more happy (confidence in the present, and avoiding hunger in the future ), then that's where it goes. If having a PS3 will make me more happy, then off to Sony my money goes. And I at least try to measure both short and long term happiness. [/theory]

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On another note. Since someone mentioned gold. I don't feel comfortable unless a portion of my portfolio is in tangible assets, which for me means gold and real estate.

Gold preserves wealth. It's real; it's not paper. It can't be easily manipulated, and if things go to hell (unlikely) gold will hold it's value. Fiat currency, stock certificates and bonds will always be useful for kindling however.

Owning real estate (or at least renting from the government) also gives a certain level of comfort.

Other than that, spend less than you earn.

[CostcoLover]

Hmmm....any purchase you make or avoid moves your net worth along a number line. I only care where that number is as it affects my happiness, now and in the future.

I purchase things that I believe will improve my overall happiness/wellbeing. If having the money in "savings" will make me more happy (confidence in the present, and avoiding hunger in the future ), then that's where it goes. If having a PS3 will make me more happy, then off to Sony my money goes. And I at least try to measure both short and long term happiness. [/theory]

----------------------------

On another note. Since someone mentioned gold. I don't feel comfortable unless a portion of my portfolio is in tangible assets, which for me means gold and real estate.

Gold preserves wealth. It's real; it's not paper. It can't be easily manipulated, and if things go to hell (unlikely) gold will hold it's value. Fiat currency, stock certificates and bonds will always be useful for kindling however.

Owning real estate (or at least renting from the government) also gives a certain level of comfort.

Other than that, spend less than you earn.

Saving fiat money can hardly be considered avoiding hunger in the future.

Did you miss the inflation adjusted value of gold? Should be $2000 an ounce though it's only worth $800 an ounce, so yes, it preserves at least 40% of your wealth. Better than nothing.

Of course, for those that know a little history, one can always count on the government arresting you for holding gold, so even that 40% is suspect.

I really enjoyed the "renting from the government" comment. Few people really give enough thought to that. They think about their mortgage payment, and only come to realize they're renting from the government when they no longer have the mortgage payment, and still shell out $500+ a month.

Now, to your theory on happiness. Does saving today really translate to happiness in the future? You can only be happy in the present, and we can try to plan for the future, but trigger happy Bush can easily change that future. He's doing a great job so far. Maybe the future is filled with radiation after WWIII and all your savings are worth $0.02. In which case you sub-optimized your happiness.

But you're right, it can be used for kindling. Most people just don't get it.

[ChipShot]

Other than that, spend less than you earn.

What does that mean ?? I have a credit card, so I can charge it and pay later, right ?? And there are checks in my checkbook, so that means there's money in my account, right ??

[CostcoLover]

Since we're talking about saving money, maybe some folks would be interested to find out what it is they're saving.

[gvideo]http://video.google.com/videoplay?docid=-9050474362583451279[/gvideo]

http://video.google....474362583451279

[4thgenFolsomite]

Does anyone have advice about the best way to buy gold? I know you shouldn't keep it in your house and that's about it. Some one told me about buying gold shares, but I'm not sure how that's done. Are they shares indexed by the value of gold? Who guarantees those shares? If it goes up and the rest of the market crashes, who would buy those shares? If you had real gold, like in coins, and you were desperate for cash (which, I suppose, is part of the reasonfor buying gold, a hedge against future dollar-crashing) who would you sell to? And what percentage of the value would you get for it? And what's to stop them from following you home to see if there's more?

I don't know. It seems like an age-old strategy, but there must be modern methods to buying gold. Can any one help?

[mylo]

Does anyone have advice about the best way to buy gold? I know you shouldn't keep it in your house and that's about it. Some one told me about buying gold shares, but I'm not sure how that's done. Are they shares indexed by the value of gold? Who guarantees those shares? If it goes up and the rest of the market crashes, who would buy those shares? If you had real gold, like in coins, and you were desperate for cash (which, I suppose, is part of the reasonfor buying gold, a hedge against future dollar-crashing) who would you sell to? And what percentage of the value would you get for it? And what's to stop them from following you home to see if there's more?

I don't know. It seems like an age-old strategy, but there must be modern methods to buying gold. Can any one help?

No matter how you buy gold, they guaruntee there's a lump of it sitting somewhere backing your purchase. Some will argue that having it in your sock drawer assures it really exists and nobody runs off with it, but I'll take the cash value and let someone else deal with the cost of custody. As you highlighted, there's fears someone will just follow you home. Nobody would follow you for a piece of paper that says you own a lump of gold.

If you have real gold, and want to sell it, there's always buyers at the "market" price. You would get 100% of that market value at the time of sale, minus any transaction fees. Whether the cash value is higher or lower than you paid for it depends on the demand for gold compared to the demand for the cash (dollar) you're trading it for.

[4thgenFolsomite]

No matter how you buy gold, they guaruntee there's a lump of it sitting somewhere backing your purchase. Some will argue that having it in your sock drawer assures it really exists and nobody runs off with it, but I'll take the cash value and let someone else deal with the cost of custody. As you highlighted, there's fears someone will just follow you home. Nobody would follow you for a piece of paper that says you own a lump of gold.

If you have real gold, and want to sell it, there's always buyers at the "market" price. You would get 100% of that market value at the time of sale, minus any transaction fees. Whether the cash value is higher or lower than you paid for it depends on the demand for gold compared to the demand for the cash (dollar) you're trading it for.

thanks, Mylo. So you think its a good idea to buy through my brokerage account. Any specific suggestions about what to buy? Like an index fund? or a gold share? I'm just not sure how its done.

[mylo]

thanks, Mylo. So you think its a good idea to buy through my brokerage account. Any specific suggestions about what to buy? Like an index fund? or a gold share? I'm just not sure how its done.

I'm biased. I'm affiliated with iShares and have to recommend IAU as the only way to purchase non-physical gold

http://www.ishares.c...equestid=295251

More info: http://www.nymex.com/GC_fund.aspx

Of course, consult your financial and tax advisors before making any investment

[CostcoLover]

That makes it so much easier for the government to confiscate.

At least back in the old days they had to come to your home to confiscate the gold.

[CostcoLover]

For those of you wondering why all this gold talk...

http://video.google....210540567002553

[4thgenFolsomite]

in addition to buying gold as a hedge against the dollar crashing, what do folks think about buying hong kong market index funds? some of those index funds still have high management fees, but if the dollar goes down, it seems like a good idea to be diversified in foriegn funds. As much as I hate the idea of fueling the Chinese tiger, I'm not sure about the other western indexes (i.e. european and UK).

[CostcoLover]

China has its own problems.

The objective is to get the rmb to float which is now pegged at the lucky 8.88

How about investing in the Amero?

[4thgenFolsomite]

China has its own problems.

The objective is to get the rmb to float which is now pegged at the lucky 8.88

How about investing in the Amero?

okay, I'm an idiot. What is the RMB? I DO know what an Amero is though

[CostcoLover]

okay, I'm an idiot. What is the RMB? I DO know what an Amero is though

Yuan.... rmb... http://en.wikipedia.org/wiki/Renminbi

http://www.google.co...G=Google Search

[CostcoLover]

You can always invest in (marrying) a Rothschild... or if you prefer the American variety, a Rockefeller

* Rothschild banking family of Naples
* Rothschild banking family of England
* Rothschild banking family of Austria
* Rothschild banking family of France