What Should I Do With My Money?

Economics Economics Questions
21

First,

Practical Applications of Austrian Economics (investing)

I would contact the companies of the four guys mentioned in that intro and see about getting a consultation. Shostak might even get back to you himself: email.

Um. Why?

You spend all this time asking him if he really knows what a dollar is, but evidently you don’t know how many ounces of gold a dollar even buys. Even at spot price (which he won’t get), and even if he spends all $200k just on gold (which he won’t do, especially if you’re expecting him to be dumb and pay off debts right away)…it would be less than 125 ounces.

You’re honestly suggesting a human being couldn’t store 125 ounces of gold on his own? I could carry that in my damn pockets if I had to. Even in its most common form, you’re looking at an ounce per coin, 33mm in diameter. So 125 coins, not much bigger than a quarter. Sure they’re a bit heavier. Put em in a fannypack if you have to.

And if that’s too many coins to keep up with, he could buy bars with a greater weight, even up to 400 ounces.

“You can’t store that on your own.”

Are you insane?

To this note, yes, having outside plans is good, even if just for backup.

Check out Doug Casey, Simon Black, Mark Nestmann (and their archives at LewRockwell.com), and if you’re really interested, things like this from SurvivalBlog.

Particular good looks in this realm are:

Four Steps to Take Now for a Future Quick Get Away from the United States

Want a Passport? Better Find Your Circumcision Records!

Why You Need a Second Passport

22

Since I don’t have any debts I wouldn’t have to pay any off, but I would pay off any family debt.

23

Its eleven eight-and-a-half pounds, and you put it in a briefcase and handcuff it to yourself and have a silenced pistol in the other hand. And if you want to expat you take a cabin cruiser to thailand and buy yourself an estate and hire some fighters to provide security and thereyago. Asia or south america. Dont go to europe or africa, those places are done for as well.

but I would stay here and probably buy land with minerals on it. I had a very interesting discussion today. Natural gas wells are an excellent source of income, if you can get them.

24

Listen to this very closely. There is only 1 thing that matters in the investment world right now, and that is what Ben Bernanke, Mario Draghi (Bernanke’s European counterpart), and the other central bankers are going to do. Everything else about a stock, such as any technical indicators, balance sheet, P/E, etc…is meaningless. If the banks act, the markets will increase (but only temporarily), and if they don’t act, markets will continue to drop. That’s it. Unless you are an insider, I would stay out of the markets for now. Don’t seek the advice of professionals, they don’t know anything more than you do in this scenario. And don’t touch Facebook, just horrible advice!

I think the best we can do for now is try to preserve what we have. Don’t try to get rich; be content protecting that 200k. I feel the best way to do this is with physical gold to protect against central bank printing, and U.S. dollars for if the banks don’t print. In the long term the dollar will get ruined, but for now it’s the best play. Paying down debt serves the same purpose of owning dollars. The only other thing I own is an ETF with ticker XLE. XLE is a portfolio of energy companies (Exon, Conoco, Chevron, etc..) I own this for the same reason I own gold, but it has the additional benefit of hedging yourself against Middle Eastern war and rising oil prices. It also has a better dividend than some ordinary savings account.

I also wouldn’t be opposed to spending a few thousand on prepping: guns and ammo, water, and food. But don’t go too crazy in this area.

Depending on where you live, the only other thing I can think of his buying farmland and sharecropping.

To summarize:

  • Pay down debt (especially government debt, they will come after you at some point)
  • Stay extremely liquid (if you choose to hold dollars in Treasuries, they must be very short term)
  • Gold to hedge inflation
  • U.S. Dollar to hedge deflation
25

I don’t think you guys are comprehending the amount of money we’re talking about… it’s $200K not $200M.

Clayton -

26

I was actually being facetious, a backpack is less conspicuous, more secure, and you have both hands for weapons. But the point is that is easy to carry in excess of $200k/gold on one’s person. Because its just over a hundred ounces, which is just under ten pounds, today at least. I will calculate the volume for you if you like.

as for takng the money abroad, that was your suggestion. The cost of things is lower in south america and asia thanin europe. Whereas the security situation in africa is shit, I wouldnt go there with other options on the table. As for thailand, they are a pretty awesome country where its pretty cheap to live, and they are pushing self-reliance recently anyway. Mongolia is another option in asia. In south america I would probably go to chile. There are other good places too. This is just what I would pick. I bet you could get enough landfor a decent estate in chile.

27

Oh, and 1 more thing. Read every article on Zerohedge every single day!

28

Maybe we should start a guide for expats meta-thread.

29

Bingo.

If You Ever Need to Escape with Your Wealth from a Totalitarian State…### Ancient Ideas on How to Hide Your Wealth

30

How about you take the money and upgrade the damn forum that never gets fixed. That’s my current suggestion.

31

malachi:

i spent like 20 minutes writing why facebook is a good stock/incredibly volatile right now, but still i think the best buy on the market (obviously my opinion and best for me and meeting my expections). the forum ate it and i dont want to waste that time typing it again (bed time). Do you want to know my logic in picking stocks/that stock? or are you asking as a potential investor in it.

and i also agree with natural gas. Im looking at that too. incredibly cheap price for it with huge potential. The man to watch for natural gas is boone pickens, the swift boat for veterans financial backer, this guy doesnt lose and he pushing as hard as he can to raise natural gas prices. i dont know how much money he has in natural gas but it has to be in the 10s of billions. half of congress is in his pocket and there WILL be news in the next handful of years giving natural gas a monopoly in at least one market. A congressman talks about how wonderful natural gas is on a daily basis in congress. One big push (which will be hard even for boone) is to require all car manufacturers to produce natural gas engines and not gasoline. Hes talking about (i think i heard him say it on 60 minutes) how he can put a natural gas hook up in every home garage in america so you dont even have to go to a gas station ever again! boone is such a sweet person and never looks after his own interests. its about the people. haha.

he has already lobbied 10s of millions and he will get his monopoly so ride that ass to the bank.

32

Meh i think facebook is just a fad. I use it now, but its getting boring and whatnot.

Wouldnt hurt to put a little in it tho.

33

In Conquer the Crash, Bob Prechter stated that Australia, New Zealand, Canada, and the US would be the safest countries to live in when SHTF. I have to agree with that assessment. Those countries, including the US, has a long history of stability without the strife and violence so many other countries experience, are geographically isolated from unstable regimes, and are prosperous. Personally, I don’t like the US. I dislike the idea of my taxes supporting the military empire. And I don’t like the Nationalism and the “we know what’s best for the world” attitude among the people.

If you are thinking about leaving the US, better start planning NOW. It’s only going to get tougher in the future. The US, along with many other countries are clamping down on immigration and emigration. As the economic crisis deepens, citizens fear for their jobs and grow more suspicious of foreigners. Governments respond by restricting newcomers.

I like the prospect of New Zealand. They are a prosperous country with a strong currency. They are a country of only 4.5 million. And geographically, it is near perfect, as they are far away from dangerous and unstable countries.

34

I can offer three advices.

First: inform yourself. Learn about the pros and cons of various investments. Bonds vs equities, commodities vs housing etc. That way you’ll be able to see exactly what you are dealing with and what better suits you.

Second: diversify your investments. Resist the temptation of putting all your eggs in one basket even if returns seem good. Resist the temptation to buy too much gold or 10 years equities even if outlook is good. Set aside an “emergency fund” you won’t be able to use unless you really need it: banks, insurance companies etc all offer “emergency fund” alternatives. Just be sure to shop around, a lot.

Third: consider the advice given by experienced people like Marc Faber http://new.gloomboomdoom.com/portalgbd/homegbd.cfm . Subscriptions are expensive but you can get free samples to judge for yourself if they are worth the price and/or give you the information you need. I want to stress I am not affiliated in any way with Marc Faber, just a satisfied customer.

35

I want to know your logic because, in my opinion, the fundamentals dont support buying facebook. Unless you think that phone they are making will result in a major cross-company change.

36

ya i agree the fundamentals arent there, but lets be honest NOTHING is there. I’ve been using facebook since they opened it up to my SEC school. This whole time facebook hasnt tried to make a dollar off of me. They only make about a dollar off every user. Bidu makes 2.50 and google makes over 7$ per user. If they can make $1 per user without even trying its not going to be that hard to improve that number by a lot. When google went public they didnt have the fundamentals either. It was a search engine and nothing else. I wanted to buy it, but i thought the price was almost double what it should of been. I still think it was, but they kept beating expections so the price never went down to a lvl i was comfortable with. wish it did though haha.

The main thing is look at the future of technology. Apple, google, microsoft, and every industry from cars, air travel, shopping, virtually everything is moving towards connectivity. they are trying to make every product you buy to have some kind of ability to connect. All of it is an aspect of social media where Facebook is king.

Yes it worries me that there is nothing there yet in terms of a revenue monster like it will need. What doesnt worry me though is that social media requires customers and facebook has the customers and the loyality. The market for connectivity has just scratched the surface and is going to be the largest industries in the world.

Every company needs to do business with facebook if they really want their products to succeed. a great example is google glass. If you dont know what it is look it up its a very cool product coming out soon to a couple of years. The base to google glass’s success though is dependant on google+. Well hate to tell google this, but google+ is worthless. Its worthless because no one uses it. So everything they show off in their advertisements will require all your friends to be using google+ or else its worthless. I mean look at myspace. myspace isnt that bad there were a lot of aspects that i loved a whole lot more than facebook, but they dont have any customers BECAUSE they dont have any customers. Social media is best as a monopoly because connectivity is better the more people you can connect to. So i think a huge part of facebook’s future is just being a pimp for their billion customers (will be billions in a few years.)

not to mention different directions the company chooses to go. They literally have dozens of easy options that turn it into an industry leader by just offering the product. I think they should have a search engine. I dont think it will kill google anymore than google+ killing facebook. I think they could take a HUGE dent out of google though. 10-15% of the market at least by just offering the a web search.

they can open up an amazon/best buy online type store and become the industry leader. They will be able to advertise their products for free. i mean i dont think books is their future, but ebooks can be when you include the connectivity to facebook itself. I think a best buy type store where they sell cool and hip connectivity products. Get with the producers of those products to install some type of facebook connectivity. Refrigerators are even connected now adays.

I dont think a facebook phone is going to do what the iphone did for apple, but it will bring in profits. The important thing is it will continue to build dependancy with its customers. When you take in consideration a facebook phone, tab, computer, gps, cars, refrigerators, scanning barcodes at grocery stores for customer reviews and more importantly FRIENDS reviews, a search engine, their own facebook ‘glass’ (if google doesnt partner with them), a facebook OS for computers and mobile, and anything else that can/will connect. All products want to say it connects to facebook without facebook having to do anything. Most of those products they dont have to build themselves, let someone else do it all facebook has to do it create a software to give it a cool connectivity to facebook.

Yes its fadish right now, but they are just NOW saying they are ready to start making some money. They made an insane amount of money with the ipo and they will use it.

37

Ok, I see what youre doing there. This is an investment that lends itsekf well to the saying “dont invest anything you dont want to lose.” I agree with your analysis that there is a lot of potential for increased revenue. With over 2 billion shares on the market, its going to take a while for any of those things to generate a return. And the financial situation has the potential to interrupt any of that. Furthermore I disagree when you suggest that facebook users are loyal to facebook. Youre correct that massconnectivity and competing systems create a natural quasi-monopoly of sorts (actually market domination) but I liken it to a soccer game with potentially unlimited teams, facebook simply has the ball now. All those users could uproot and reestablish elsewhere in a week, and my personal bet is that they will. But people make money by making buys like yours all the time, because fundamentals analysis is pretty easy and anyone can do it, whereas committment to a hypothesis is the domain of the exclusive minority.

38

I agree with everything you say, and it is for sure a risk that i can afford to lose everything. I wouldnt be making a large bet like this if i was in my 60s. 2 things though that differ slightly:

returns and customer loyalty

returns: I agree there wont be much for short run (a year maybe 2) returns in terms of dividends, but i think with just how much excitement this stock generates it has a lot of stock price returns. I think in a year ive got a price target of around 40 to 45. Once people start seeing facebook actually putting out things that can bring in money it will go back to ipo price. I mean hopefully they come out with something! anything! haha. In a year i will have a better understanding of their vision and earning potential and i will either dump of keep it for a while. I think most investors see what i do, the next google, apple, or microsoft. but they also one to maximize there money so they are waiting until they see something. I think there is a chance it goes down as low as $15 before the end of the year because of investor impatience (its going to depend on their PR) and i will probably double down if it does drop that much.

just one example of something that will over double their revenue and if they came out and said they were doing this stock would go up to 30-40 bucks: start charging businesses that have facebook pages. if they charge personal accounts everyone would leave, but these tens of millions of ‘subscriber pages’ should be charged. They have millions of stupid ones like ‘i bet i can get a million friends before you’ type crap that will be weeded out which is better for them, but there are over 10 million real businesses posting messages on multiple times a day basis. advertising for FREE to their 1 million fans, or 10/20 million fans. Thats crap. if they charge businesses $20 a month which EVERY real business can afford that will generate over 2.5 billion in revenue. I think they will probably do something like that, with different levels. Like large businesses like General Motors would buy million dollar contracts for their advertising. Then the struggling musician would have a $10 a month page.

customer loyalty: I agree that no one really cares about using facebook over say twitter, google+, or the unlimited competition that will come out. They do however care about actually talking to the people they want to talk to. Its the people that care the least about facebook, but have facebook accounts that is going to keep the facebook loyalty. Those people get on for about 5 minutes a day to check messages and send a couple messages then get off. When myspace and facebook were competing i couldnt for the life of me get a couple of my best friends to switch to myspace (at the time a lot of my friends from high school were at other colleges that could get facebook accounts and i couldnt yet). ‘dude i just dont care that much. i get on for about 5 minutes a day to check my messages, see what people are doing, and log off. everyone i know here has facebook, youd be the only one i know on myspace. just shoot me a text message if you need anything.’ haha. While you agree the monopoly/market domination agrument, but i dont think you are realizing it has to be everyone (vast majority at least) or none. Also most people myself including dont have much tolerance for 2 social media accounts. Though twitter and linkedin have found a niche in the market. linkedin doesnt bother me because they have a completely different target that i dont think facebook is very worried about, but facebook could create some kind of dual-accounts one person and one personal business account that would wipe out linked in. Twitter though worries me and i cant explain its current success. Though it seems like it has more of a personal/live type feel to it.

And of course ive got my track record to back it up. Even though im not very active investor (facebook is the only thing i bought this year) i do pay close attention to prices daily and constantly watching news for future products. I havent bought a single stock since the crash and i had sold everything before the crash. (no i didnt predict the crash, no i didnt know anything about the austrian business cycle, but the market definately didnt feel right.)

My stock purchasing history in order of when i bought them:

1st stock Exxon - bought for around 35 in 2002 sold at the end of 2007 near its all time high in the low 90s

03 - Apple - bought it for around $8 and sold it in 07 for 170.

04 bought UA close to the ipo release for around $12 sold it in '07 for around 31/32$

05 jack in the box for 36 and sold a year later for 65.

06 - Chipotle bought it when the ipo release. I had my first chipotle burrito and went straight to see if they pubicly traded and their ipo was coming out the next month. bought it for around 42$ sold it in about 2 years later in the mid $130s.

06 - bidu - i dont remember what i bought and sold it for but the sold it about 2 year later and the stock had trippled

then of course my first stock advise ever. It was also my first experience of business and how the market worked/that there was even a market to begin with! my best friend had a computer and a number of computer games. this is the mid 80s you know back in the when you had to type c://thenthis/really/longline/justtoopenupacomputergamebutyounevercouldrememberthiscodesoyoucouldneverplaythegame. Well one day i went over to play and his dad had just bought WINDOWS where you can just click to open up a program. HAHAH AMAZING! So when i got home i asked my dad what he does for a living. i asked him why he didnt work for company ‘windows’ he explained. I told him to sell his company and buy microsoft. He of course said he couldnt do that, but he explained what stocks were and he could buy shares in it and he would be a part owner. So i told him to buy as much as he could. I had even told him i would live in a small house so he could sell our house to invest as much as he can. He laughed at me and told me that it was a ‘really good idea, but not enough people could afford a computer let alone windows for the company to be successful’.

39

Thats all very impressive. You do realize that buying a stock in hopes that the price will go up so you can sell it for more is actually closer to speculation than investing, right?

40

I think most people on here are discussing what they would do with the money. Here is my advice, just don’t overextend this windfall. Use common sense when spending your money. While some advice on the forum is sensible, ultimately we don’t know much about your situation besides you getting money.