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Investing Ideas


I’ve had a few people ask me what they should put their money into so that they don’t lose it.  Now, I don’t have those answers, but I do have a list of the common themes I find when I go looking for them, and I’ve recently seen some stuff that gave me a good idea as well. Here goes.

Priorities:

Liquidity – how quickly can you convert said item into cash?

Appreciation – how much will it increase in “value” between today and next month?

Risk – how likely is it that this will utterly tank and end up costing money?

Common Solutions:

Money Markets, CDs, Bonds and other “liquid savings” instruments:

  • Highly Liquid (90 days at minimum, 1.5 years max wait time)
  • Low Yield – Appreciates more slowly than inflation, which means a net loss in real value
  • All but bonds are not risky. Junk Bonds are risky, others are less risky

Conclusion: better than a savings account, but only slightly – with the exception that bonds could lose all your money. If you think the economy will improve only a little bit, this is a safe place to put your money.

Stocks and IRAs:

  • Illiquid
  • Uncertain appreciation and yield
  • Quite risky, but this can be hedged by using an Index Fund

Conclusion: could be good, but this is a long term investment. Don’t expect to see this money again for a long time. This is a good place to put your money if you think the economy has “rounded the corner”.

Consumable Commodities:

  • Semi-Liquid
  • They do not appreciate, but their prices are determined by inflation; thus, as inflation goes up, their prices go up and a profit can be made that is hopefully worth more than the amount the money you are being paid has dropped
  • Somewhat risky. Crops are prone to flooding. Animals are prone to the FDA and CDC deciding they don’t like pigs, cows or chickens and shutting down those industries

Conclusion: these seem like good investments to look into, but it is likely that if our economy tanks too hardcore that Obama will fully nationalize these industries. Most of these already operate at a loss, and full nationalization would make them worse. In the meantime – if you are cool with spending the time it takes to be a speculator, then you can probably make money here.

Non-consumable Commodities like Gold, Silver, Gems, etc:

  • Highly illiquid
  • Only appreciate at the rate of inflation
  • Only risky if you think the economy will improve. Gold is purported to be in a bubble right now, but Silver is not. It is about where it should be, and it will be going into a bubble, or so I hear. Gems are extremely illiquid and their value depends on your bargaining skills.

Conclusion: this is the ultimate safe haven if you think the economy is doomed and our country is doomed. Keep in mind that if you have too much of this stuff, you make yourself a target road warrior!

Useful Stuff like cars, houses, tools, and parts

  • Semi-liquid
  • Barring strong deflationary pressures (like houses have now), these will appreciate at a lower rate as inflation
  • These are risky because these things depreciate in value with time, but if the economy tanks as hyperinflation takes root – these will sell for much more than you pay for them now and they are easier to get and sell than gold and silver.

Conclusion: these are good to get if you are very pessimistic about what will be coming in the next year. Instead, look at the next suggestion!

Your Skills Fool!!

  • ALWAYS LIQUID – if you have a skill people want you can sell it PERIOD.
  • Some skills appreciate, some depreciate – so you must hedge yourself by learning a wide array of them. If you are reading this, you have access to the internet – WikiHow to make some product everyone needs and LEARN HOW.
  • This is the least risky thing of all. If you go pick up some crappy tools at a swap meet and learn how to do some stuff that people want, then even if you don’t get hired you’ll be more useful and you will get value in that respect.

Conclusion: this is a must for everyone. You need to know how to do more than drive in rush hour traffic, answer a phone and e-mail, and eat fast food. If our economy rebounds, then you have a new skill that will save you money later – even if you end up hiring someone to do the work for you. You will be able to pick out someone who knows what he/she is saying from someone who does not. If the economy tanks, you can now do something people will need on the informal or “Black” market. Either way – you make and/or save money.

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Categories: Europe, The USA
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