Hard times coming...best way to invest money.

Discussion in 'Homesteading Questions' started by r.h. in okla., Nov 20, 2003.

  1. Tonight at church my pastor mentioned about someone (a modern prophet) stating that we are just now on the verge of extreme hard times and we need to get better prepared cause we may have to endure some of this if the rapture doesn't take place soon. Well this got me to thinking about a book that I haven't gotten to read yet called "The Turning Point". A non christian book written back in the early 90's by a couple of guys who have been studying past history of all the hard times and major wars. According to them they are predicting that anywhere from 2005 to 2012 (if I remember right) America will enter into another depression followed by major continental wars and it may last 25 years as usual.

    Well based on both of these prediction and when time is nearer and it looks like they maybe right about there predictions I was thinking maybe it would be best to withdraw what little money that I have in 401k plan and invest it wisely on farm equipment and maybe store cash back to use for trading. But should I keep it all in bills and coins or should I invest it in gold, silver, or diamonds? What would be best to use for trading and buying.
     
  2. ajoys

    ajoys Well-Known Member

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    The first thing I thought about was my sister's ex inlaws and all the preperation they did for Y2K at there home out in the woods. They are devout born again christians and where convinced that major catastrophes where going to happpen etc....

    If it was me, I would buy some land and build my homestead debt free, prepare the best I could, and put my money in some kind of precious metal. Of course the economy is getting better, new housing construction is at a huge peak and it looks like things are starting to get better so who knows what will happen.

    People like the doom and gloom, I am sure the book sold well.

    Personally, if there was something that was so bad that you had to be 100% self sufficient, I don't think you could protect yourself or your land from the 10's of thousand of people that will be coming out your way to take what you have.


     

  3. Runners

    Runners A real Quack!

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    Heck, I lost so much in the market, here's the remaining 2 cents!

    Invest your time in your neighbors, get yourself debt free. Nobody is 100% self sufficient, period. Sooner or later, you'll need a doctor, vet, gasoline, vehicle, food stuffs, clothing, shoes - somebody else is gonna have what you need. The sooner you can start bartering the better, plus all the money you save by going direct to the producer.

    As far as the market - it's rising, always a gamble to hang on to what you've accumulated. In any investing scenerio, if you haven't got time to watch it shrink & grow closely (or the stomach), be prepared to begin losing it, a bit here, a bit there.

    The outfit I worked for made a KILLING off of people worried about all the Y2K stuff - I was working 72hr weeks along with a dozen or so technicians installing and upgrading systems that didn't need a thing. But, when the customer demands it, they sold it at premium prices! In some remote places land prices tripled... hmmmm.... wonder what happened to that 'investment'?

    Personally, I think you can't go wrong with Church & Missions, every penny spent has an eternal return. Nice feeling too... even when the chips are down, times are tough, God sends help from some really unexpected people & places. I've yet to read anywhere in the Bible where He said, "My divine plan for Bill & his family is to slowly shrivel up and die without ever contributing ANYTHING to My plan... in short, there is NO PLAN for Bill, his wife or kids....sorry, saving him was an oversight!"

    We love our neighbors, and make sure they know we wouldn't want to have anybody else for neighbors, but them. (and they don't even go to our church!). Saturday when we butcher birds, we're them each a duck, ready to go into the oven. People count the most when tough times hit, money just comes and goes to easily.

    Bill
     
  4. Alice In TX/MO

    Alice In TX/MO More dharma, less drama. Supporter

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    Just take care of yourself and your business wisely. Back in the 1970's, there was a book by Howard Ruff about surviving in the coming hard times. It inspired us to move to the country earlier than we had planned, but the more radical parts of it now look silly in retrospect. We just opened all the cans of survival food and composted them. They had a ten year shelf life, and after 30 years...I didn't want to eat the food in them.

    Luckily, that was the only major expense that can't be recouped.
     
  5. eb

    eb Well-Known Member

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    Here is my two cents...the pastor and authors you mentioned may, or may not be right. You won't know for sure until it is too late to do anything about it, but you can't just assume the end of the world is coming and live accordingly...better to hedge your bets.

    If it was me, I'd leave what money you have in the 401K, because if disaster doesn't strike, do you really want to grow old completely dependent on others to take care of you? (Not to mention there are huge penalties for cashing in your 401K when you are too young).

    At the same time, with your non-401K assets (your cash, if any, and your current earnings) prepare for the worst...you'll never really regret being debt free, and you'll never regret reducing your cost of living so that it is well below what you are capable of spending...use any savings you can generate to get out of debt, invest in some assets (i.e. land/equipment livestock etc) that you can that will bring some degree of self-reliance if need be. Be sure if you buy a piece of property in the country it is someplace where the taxes are low and likely to remain that way. Property taxes can be a killer in the wrong place.

    Also, imo, storing large amounts of currency is not a great idea (some yes, but not all your money). If things get so bad that your can't get your money from the bank, because they have all collapsed or some other reason, then all that paper money is going to be worthless anyway. In that type of scenario, you'd be much better of having a stockpile of little pieces of lead(i.e. guns and ammo).

    Personally, I think there is a possiblilit of things getting that bad...but its a remote possibility, not a huge likelihood. Better to plan for the worst, hope for the best, but hedge your bets in case you are wrong (and by that Imean leave your 401K alone).
     
  6. Frank in AZ.

    Frank in AZ. New Member

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    ........Well based on both of these prediction and when time is nearer and it looks like they maybe right about there predictions I was thinking maybe it would be best to withdraw what little money that I have in 401k plan and invest it wisely on farm equipment and maybe store cash back to use for trading. But should I keep it all in bills and coins or should I invest it in gold, silver, or diamonds? What would be best to use for trading and buying.[/QUOTE]
    ---------------------------------------------------
    My $0.02 worth ........

    Perhaps you could study what commodities become valuable (for barter) in areas of infrastructure failure. Items like sugar, salt, tobacco, coffee and bullets come to mind. LOTS of bullets. Fuel and clean water might be good too, although they're probably difficult to store in the quantities needed. Devices that need fuel or electricity to operate might be rather useless and ... how many of your neighbors would need diamonds or gold or cash if they were starving ?

    In a time of complete civil meltdown (no police/army) my guess is that your biggest problem would be KEEPING whatever you've stashed away.
    The first person to come along with a gun could (and would) simply TAKE it from you. This is not rocket science. Look around at places in the world that have no functioning government and police force.

    Personally, I don't share ANY of your fears of an impending apocolypse.
    Instead of preparing for some nightmarish future, you're time and resorces might be better spent enjoying the present moment(s). The present is KNOWN, the future is not.

    Enjoy,
    Frank in AZ.
     
  7. j.r. guerra in s. tx.

    j.r. guerra in s. tx. Well-Known Member

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    My advice is to buy items you know you will need, regardless if whether or not the economy crumbles. If you have to buy it anyway, how is that a bad investment?

    The way interest rates are looking nowadays, plenty of us are looking at ways to 'grow our money' a little faster. :rolleyes:
     
  8. Jena

    Jena Well-Known Member

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    When the stock market crashed before The Depression, how many people went out and shot their neighbors to take what they had? How many screaming hordes of maniacs came running from the cities into the country to shoot farmers and take their produce? As a matter of fact, how many city people simply started shooting each other?

    I don't think these things happened, though I'm not positive.

    There were lots of hungry people. There were lots of people who lost all their "stuff". There were lots of people who were desperate, yet those things didn't happen. What makes people think it would happen today? Do people feel hunger more today? Do they love their "stuff" anymore than they did then? Is desperation still the same today?

    I don't have any investment advice, but I think the idea of investing in guns and ammo is nothing but paranoid and the attitude of fear is destructive, both to the individuals who practice it and to society. Don't fear your neighbor and don't fear people in general. They really aren't out to get you.

    Jena
     
  9. FrankTheTank

    FrankTheTank Well-Known Member

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    You should take a look @ a book called "The COming Economic Earthquake" don't recall the author...It pretty much says what your talking about...He thought it would have happened by now (this book is from late 80's maybe?)...I'm not so sure about continental wars, however...The US has quite a military and i'm not sure who's going to start a war (CHina? i doubt it, maybe if we decide to stop buying their junk!) Maybe more of a worldwide terroist war -like whats been happening in turkey....Theres not much you can do...have you seen the dollar value lately..damn...I guess you could diversify your assets....don't put them all in stocks...maybe some gold, silver, international stocks??? Like my mom always said....."Money is only worth the paper it is printed on" its only worth what someone is willing to give you for it...The economy is a lot like the weather a series of ridges and troughs...its just that maybe the next trough is a hurricane!
     
  10. chickflick

    chickflick Well-Known Member

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  11. Mudwoman

    Mudwoman Well-Known Member

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    I have just finished reading The Fourth Turning. I have also been reading the editorials on www.321gold.com. I have been listening to BBC news and listening to Lou Dobbs. I just read the new book out by the guy that wrote Rich Dad, Poor Dad about the coming collapse.

    I can't tell you what you really should do, but I can tell you what we have decided to do. We are taking what is left of our 401k out. We plan to convert most of it to gold and silver coins. A portion is going to be used to expand our food storage, ammo and guns, a good generator and any other tools that we think we might need should a temporary crisis happen.

    Our neighbor who is quite elderly grew up in the Depression. She called 2 nights ago and told us that she is starting to prepare for another Depression. She said that she looks at all that is happening and it is like it was in the late 20's all over again. Then my FIL who was born in 1920 and a retired CPA has told us that he is convinced that an economic colapse is emminent. He is not one to be negative and the sky is falling type person.

    The perfect storm is brewing. Housing prices have doubled in some areas in the last 4 years (but we have no inflation), and is predicted like any bubble to make a correction of about 30-40% in price collapse. Bankruptcy is up a net of almost 8% nationwide. Fannie Mae/Freddie Mac is is worse financial condition than the Savings and Loans were when they needed a bailout in the 1980's. Verizon just announced they are laying off 22,000 and AT&T will be laying off 10,000. The US is increasing the money supply at a rate of 10% a month in order to pump cash into the economy increasing the chances that the dollar will continue to decline. The US now needs 2.5 Billion dollars a day to pay its bills. In August, foreign investors plowed 49.9 billion into our bonds to help with this debt service, but in Sept inspite of 38 billion from the Japs, we had a net of 4.19 billion sent which means that in reality, foreign investors took out 42 billion. Japan is almost bankrupt themselves. It only takes one thing to collapse to cause a catastrophe.
     
  12. Our pastor says that God has shown him that after these problems in Iraq are finished, there will be a number of years of great prosperity followed by extreme difficulty. (He believes it will be a worldwide famine or something like that, but it's just his opinion.) He says God tells us to use the years of prosperity wisely--to get out of debt, pay everything off, build houses, acquire land, and become stable--so that when this extreme difficulty comes Christians will be in the position to help those around them.

    I know that it's not too difficult to predict both prosperity and need in the future; it's the way the economy works. What stayed in my head was 1) Prepare; be wise; don't become careless; make hay while the sun shines and all that--and 2) God will use His children to bless others; if/when bad times come, be brave enough to share, use the opportunity to help others, understand that God has placed you in a particular position for a larger purpose than defending your plot of land.

    As far as investments go, reason tells me to *use* money, not cherish it. In other words, help it multiply as much as possible, then turn it into something with concrete, specific value--whatever you decide that is.
     
  13. Tango

    Tango Well-Known Member

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    I don't take doom sayers without a pinch of salt but reading mudwoman's post sparked my interest. Our land value here has gone up 500% in three years and nothing has changed in that time to warrant the increase- in fact the higher sales prices have just caused our property taxes to go up and the majority of the commotion was because there are no "services" out here except for the school bus which has stopped here as long as there have been children.
     
  14. there is no''best way to invest your money''-period.I've seen it all before- somebody comes out with some plausable theory[ they generally write a book, or sell investment letters touting their ''foolproof'' method[ and make a lot of money doing it- if anything that is the ''best way'' to make money]
    Let's be realistic- you could buy land- but lose it to taxes.You could buy high priced stocks[ remember tech stocks?]- and sell at a loss.You could buy gold- and see prices fall[ remember 20 odd years ago when people were lining up to buy gold over $800?]And even if you did- you still have to convert it to some form of currency.We could see our economy and savings wiped out by war- it's happened many times before- especially in Europe.
    So- there's no''best'' way to invest your money.You came into this world with nothing and you'll take nothing out of it.If you have a place to lay your head at night and food on the table- you have enough.And all the land a man really needs is a 20sq feet- just enough to bury him.Think about it.
    The ''Book'' says'' piety with contentment is great gain''
     
  15. tooltime

    tooltime Border Ruffian

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    Since it's a free country, you can, if you wish, stock up on goods for doomsday; that's your prerogative.

    The beauty of about making a prediction that an economic collapse is "coming," "impending," and/or "(I think you mean) imminent (rather than eminent)," is that you can always make this argument. In that sense, it's always a correct (just as yet unrealized) prediction.

    I guess you would be stocking up on gold and silver as a store of value because as a real-valued asset it will be a hedge against inflation, but if you expect a severe depression, why would you worry about inflation?

    Because two telecoms companies have announced layoffs, the sky is falling? According to the Bureau of Labor Statistics, employment rose by 441,000 in October 2003.

    The claim that the U.S. is increasing the money supply at 10 percent per month is just patently false. Annual rates of growth, October 2002-0ctober 2003, for M1 was +7.0 percent, M2 was 6.2 percent, and M2 was 5.9 percent. If the money supply were growing at a rate of 10 percent per month, that would translate into +213.84 percent money supply growth on an annual basis.

    If our economy is truly so precarious, isn't it puzzling why foreign investors would continue to purchase Treasury securities?

    If you want to purchase guns and ammo, that's your right, but the economic evidence upon which you're basing this decision is inaccurate. The nonsense people spout on these boards is unbelievable. Anyone with a one-semester high school economics course and a rudimentary knowledge of U.S. history will hopefully not be swayed by these arguments
     
  16. januaries

    januaries Well-Known Member

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    GRRRR! I am not an unregistered guest! I am januaries. I logged in before I posted above (before Tango), but somehow it unlogged me!
     
  17. SteveD(TX)

    SteveD(TX) Well-Known Member

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    Amen to everything you said, Tooltime. Unfortunately, the homesteading boards tend to be visited to a large degree by conspiracy theorists, doomsdayers and the like. News can be twisted towards any direction that they wish. For instance, someone said that Verizon just laid off 22,000 people. Well, technically that was true, but this was a volutary layoff. My son, who has worked for them for just six months, was offered $24,000 to quit. They had more employees take them up on this than they thought, and were pleased. But of course this can be twisted around to reflect doom and gloom. Yet, employment is up. The economy and business are diversifying. Tech jobs go up, they go down, big companies with hundreds of thousands of employees voluntarily lay off 22,000.......

    I prefer to be an optimist. Cautiously optomistic, but overall the "glass if half full", etc. If you adopt a pessimistic attitude about life, the economy, etc., you can develop a "bunker buddy" mentality a little too easily.
     
  18. Oxankle

    Oxankle Well-Known Member

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    Taking all your money out of a 401k and buying survival goods is not a good plan. Had an acquaintance who did just that, cashed out his retirement, quit his job, hid out on a mountainside in N. Mex until well after y2k. When he went to dig up his money he found that pack rats had shredded it and it was not even salvageable. Now he is an ignorant old toot with no job, no prospects and well past the years when he could expect to find a good woman to support him.

    Preachers have been spouting doomsday, repent (and give me your money) since time began. I think one of Adam's sons was a preacher.

    Hard times will surely come--they always do, but somehow we will muddle thru. If society collapses your strong arm and ties to family and friends will mean more than money. Better concentrate on learning to do what you may need to do, and on strengthening your ties to your children, your relatives and your community.

    If society does not collapse your 401k will be vital and all those other things will be huge assets as well.

    On a cautionary note, demographers tell us that a downturn in the price of stocks, land and homes will occur when the baby boomers start dying off. This is slated to begin in about 2008, close to the preacher's prediction.

    However, the demographers did not address the influx of immigrants, legal and illegal. There may be enough of them to offset the boomers.
     
  19. ajoys

    ajoys Well-Known Member

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    The nice part about predicticting that an event will happen is that you will always be right as long as you predict it will happen all the time.

    In other words. Every single day that it has rained where I live, I have predicted that it was going to rain. That is a true statement. Of course it doesn't say anything about all the days that I predicted it was going to rain and it didn't.

    The reason housing has risen so much is because it was at a very low point and prices where down, the economy is getting better, inflation is low, interest rates where low etc... it was prime time for real estate to boom. Also, even if the enconomy isn't getting better, remember that housing in most cities is in a shortage. So even if the economy is down there will always be enough people on the up and up who have the money to buy a house and what better time when prices are rising, interest rates are low, economy and the market are on the rise etc...


    As long as there are people who have the funds looking for homes in areas where the supply is short the housing prices will continue to go up.

    Just wait, the economy, interest rates and the market will all start to go up and up and housing prices will stop and/or start to fall, especially if interest rates go up towards 8 percent.

    I just read in the paper that new housing starts where higher in october then in something like the previous 17 years. The housing market is still strong in most areas.
     
  20. diane

    diane Well-Known Member

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    Living debt free and having the tools and knowledge necessary to make a living is never a poor investment. I agree with the folks who talk about cultivating family and community relationships. Hard times come and hard times go. I am not a doom and gloomer, but we have seen our share of hard times in our life....both in debt and out of debt. Out of debt is much easier :haha:

    We feel blessed to live on our little piece of land and have the ability to grow our own food and heat our home with our own wood. We have the ability to live without electricity with very little problem, which was a real blessing when the lights went off!!!

    I don't know how old you are or how well vested in your 401K you are. We were older and not all that well vested and could withdraw without penalty when the younger folks voted to go into the higher risk investments. We pulled out and have our savings, they do not......but they are younger and can start over.