CingularDuality

Wow, lots of good advice here!

I guess the word "investing" in the thread title is a misnomer. I'm not looking to make money, just a method for saving money for the extreme long term. I'm horrible at saving cash. In fact, I have no savings whatsoever, other than about $20,000 in my federal thrift savings plan (401k type of account).

I figured gold would be good as it would be valuable if we enter a recession/depression, it's pretty liquid, but not so liquid that I'd be willing to spend it on a rifle or plasma TV.

But perhaps I should concentrate on just getting a bit of discipline and saving up some cash instead. I am working on putting myself in a position where I can buy a house. I'm debt free right now after finally working myself out of almost $30,000 in credit card debt. Saving should be easy now, right? Unfortunately, instead of saving immediately after getting rid of my debt, I raised my standard of living in petty ways. Starbucks every day, anyone? Eating out for lunch instead of brown bagging it, etc...

I was thinking that buying a tenth of an ounce of gold every month might be a good way for me to sock a little bit extra away without me really noticing it missing, but perhaps not?

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TacticalGamer TX LAN/BBQ Veteran:

Tempus

As a first-time investor, gold is the last place you should be.

Buy a mutual fund. Buy CDs. Buy your house.

If you want to speculate, then go with gold. But consider this:

Say you buy $10,000 worth of gold now. Even if it DOUBLES from its current near all-time high (highly unlikely), you will net a whole $10,000. But if it retraces itself back to where it was just two years ago, you will lose $4,000. Gold is not a company that can increase earnings every year. Gold is not something you would want to hold onto for 20 years. Gold is subject to forces that most don't understand -- inflation, currency changes, and speculation to name a few. Most of these are short-term (less than 5 years) trends. Long term investing is not to be done on short-term trends.

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CingularDuality

Right, that's why I clarified that I'm not really interested in gold as an investment, but rather as a way of saving money.

No, I think the best investment I could make right now would be in a house. Unfortunately, lenders still laugh at me when they pull my credit report...

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TacticalGamer TX LAN/BBQ Veteran:

Iceberg

Im telling you...



Invest in that GRILL!

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Tempus

LOL! It is even WORSE for saving money than it is as an investment!

You wanna save money? Buy CDs.

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CingularDuality

You're not making sense to me here. CDs are not liquid for a certain amount of time. They're meant to be an investment.

I'm looking to simply sock some money away that I won't be tempted to spend on trivial things, but at the same time, I want it to be fairly liquid in case of an emergency. It could be argued that gold is even more liquid than currency, and in a global sense, it's more stable, too. No? Am I way off on this?

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TacticalGamer TX LAN/BBQ Veteran:

Trooper

why not savings bonds? or did i miss that suggestion......they gotta be in the government for what 7 years, im not sure of the interest or even if they have any but its a thought

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that sounds like a good idea trooper.
-Vulcan

CingularDuality

I did that in the past, and they worked fine for this purpose. Our car broke down and we had to cash them all in in varying levels of maturity, but they were fairly liquid.

Paranoid or not, I'm still thinking about a total economic/political collapse when I consider gold to be the ultimate in stable money, though. Extremely unlikely in our lifetime, I know, but how much would it cost me over the next 20 years to have that paranoid peace of mind?

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TacticalGamer TX LAN/BBQ Veteran:

Trooper

i dont think liveing in a country that has more debt then all of africa combined, and wanting to your well earned dollar safe is being paranoid. When i got married one of my grandparent,s handed me an envelope filled with savings bonds, 500 for ever year since i was born, was really nice


If you do end of finding a good solution keep us updated, might be a good investment for a few others....why not invest in TG, its stock keeps going up and the returns are priceless

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that sounds like a good idea trooper.
-Vulcan

Tempus

Cing, you need to decide what your priorities are:

Do you want to save money?
Do you want to make a little money?
Do you want to more money?
Do you want to gamble?
Do you want to hedge against economic collapse by the US?

Save money? Put the money in savings account.
Make a little money? Buy CDs or bonds.
Make more money? Buy in the stock market.
Gamble? Buy gold (or better yet, uranium).
Hedge against economic collapse? This is anyone's guess, but the saying goes, "When the US sneezes, the rest of the world catches cold." Gold might work here, but really, if our entire enconomy collapsed, the little amount of gold you have will be insiginificant compared to the rest of your problems.

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FROM THE TACTICAL GAMER PRIMER.
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BaneII

If you are buying a house to live in, it's an expense not an investment. Lots of people have that misconception.

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experiment626

Invest in 7.62mmx51mm...the currency of the new millennium. Sorry, just had to throw that in

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CingularDuality

I seriously plan on doing this. But in 5.56mm, actually...

Well, that may be. All I know is that right now I'm paying $800 a month to live somewhere and I'll never see that money again and if I was spending the same amount on a mortgage, a portion of that money is building equity in my home. I suppose it's still an expense, but it's the single thing that will most change my personal economic situation for the better.

Heh, as for hedging, see the first quote in this post....

So, you think gold is too risky to use to simply save money?

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TacticalGamer TX LAN/BBQ Veteran:

leejo

The hell you say! When I buy a house to live in, it is most certainly an investment and a damn good one.

ScratchMonkey

Buying gold is like putting your money in your mattress. That's not a bad thing, but it's not an investment. It's a hedge, a way of protecting yourself from inevitable inflation. It's like zero-interest savings. (Recall that when saving using dollars, you have to subtract inflation from the claimed interest rate to get the real interest rate, and that can be zero or even negative.)

Gold is ok as a long-term hedge, or for when the economy melts down because the dollar tanks (we can't keep borrowing forever; eventually servicing the debt takes up all the revenue). But it's pretty volatile over the short term.

And any commodity with stable value will serve as a hedge if civilization doesn't collapse.

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