Investing for the Slightly Paranoid Homesteader

Discussion in 'Homesteading Questions' started by Unregistered-1427815803, Jun 18, 2004.

  1. Seems like I've been socking away those nickles and dimes forever with the idea of retiring early and having a homestead. Problem is, at this rate it seems I'll either be buying swamp land or will be too old to swing an ax by the time I get there! I've always had a slightly paranoid streak and have never felt at all secure with traditional investments. I suspect that many of the folks on this board may feel similarly. I was wondering how others who may have a similar "under the mattress" mentality have grown their savings with a feeling of safety. Thanks in advance for your thoughts.
     
  2. pointer_hunter

    pointer_hunter Well-Known Member

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    You could put your money in a bank and let the interest grow either in a savings account or CD. It is insured up to 100K if something happens to that bank. You could by savings bonds. If you don’t want to “trust” the government systems, then invest locally. Buy low and sell high. It’s the basic idea behind all investing. By this I mean take what money you have, find items that will sell (antiques, cars/trucks, trailers, bikes, dolls, and livestock) buy them at low prices and then sell them for a higher price. That is the only way that you can have your money work for you and grow. Otherwise, it will just sit under your mattress and stay the same amount as it is right now. Another option is this….loan your money out to others who can’t get money from a bank. I have seen many folks on here that could use some money but can’t get a loan because they are “off-grid” or some other reason. Most have the ability to pay the money back in time; they just don’t have the bulk they need at the time. You could loan them the money and then collect the monthly payments with added interest. It all comes down to how much you have, how much you’ll need and how fast you’ll need it. If you need it real quick, go to the track and bet on the ponies! I can’t guarantee any of these ideas as sure fire ways, especially the latter, but that’s how a lot of people do it.
     

  3. agmantoo

    agmantoo agmantoo Supporter

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    Within my own experiences, I believe the best opportuntiy to grow ones savings is to invest where one is comfortable and experienced. By this, I mean to invest in something that you know a lot about. For example, a person with building experience should be able to determine if a building has the qualities that may make it a good investment as something that could be resold for a profit. The same goes for a mechanic, he should know the problems with a vehicle and the associated expenses required to make it saleable at a profit. These are investments just like investing in the stockmarket but without the risks since the individuals are in their comfort area. If you want to invest in the stockmarket find yourself a segment (sector) that you may have a lot of experience/exposure. Do your research and invest modestly. Until you get comfortable, position yourself to where if your investment loses 20 percent it is sold. You must always protect your "seed" money. The remaining 80 percent can be invested in another stock and with an achieveable gain of 25 percent you are back to the starting point. If you let your investment shrink to where 20 percent of the original purse remains you will not be able to recover. Always remain diversified, you may unknowingly invest in an Exon! Go slow at first and as your success builds so will you confidence. If you cannot rest comfortably at night knowing you have the investment risks then stay away and leave the money in the mattress. May success be with you.
     
  4. MoonShine

    MoonShine Fire On The Mountain

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    This is a good thread. I've been considering some investing. Nothing elaborate,just trying it out. Like Agmantoo says,modestly.

    I must admit,the thought makes me a little nervous. But if I am wise and do my research then I may be able to make a little money.

    Let's hope :)
     
  5. fin29

    fin29 Well-Known Member

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    Like pointer suggested, my best investments have been in items that I am very familiar with and that I'm able to turn around and sell quickly. For me, it's restaurant supplies. I buy low from auctions and our local swap guide and then sell high.
     
  6. Torch

    Torch Well-Known Member

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    How long are you going to be investing the money for?
     
  7. heelpin

    heelpin Well-Known Member

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    There are many vehicles you can use to try and make a profit but its not something to jump into without first learning as much as you can and when you decide on a speculative investment don't get in a hurry, watch it for a while and get a feel of how it operates.

    If you have small amounts of cash that you won't need for one year and want something safe, I think government I-Bonds are good. You can buy these at a Federal Reserve bank starting at 50.00 with a maximum of 30,000.00 per year, the current rate of interest is 3.39% and changes every 6 months. These bonds have a fixed basic rate but are indexed to inflation and in my opinion the rates should be bottomed out and headed up. You can buy these at a local bank or open an account directly with the treasury online http://www.publicdebt.treas.gov/sav/sbiinvst.htm

    If you are willing to take more risk you have many options, the stock market is what most people invest in but most have to pay a high tuition before they learn how dangerous it is. There is fraud and deceit everywhere so you have to very careful here but it is possible to invest in stocks and make money. If you want some good conservative advice I would recomment subscribing to Safe Money Report, www.safemoneyreport.com. I buy and sell S&P 500 options online through an account with ScotTrade (good honest broker). Its not unusual for these options to move as much as 50% in one day and you can make money when the market goes up or down but its very risky, you can lose in a hurry here.

    Then there are commodities, this is the most risky but also where you can get rich in a hurry if you play it right. Its true that about 90% of commodity traders lose money but I think its possible to make money here if you will treat it like a business. If you had bought 100 call options on soybeans last August for about 5,000.00, you would be set for life. If you want to try this just sit and wait until a commodity is trading at multi-year lows and then start watching it. I think Cotton is in that position now, there is over production by about 10 million bales worldwide and cotton is trading around .51 cents a pound. Its only a matter of time before the law of supply and demand kicks in and farmers produce less and the price goes up. Warning! commodities are very risky but the potential is unlimited, use options only.

    The last word, there are no gurus, you are on your own, do not trust anything or like Ronald Reagan used to say to the Russians "Trust but verify".
     
  8. VonWolfen

    VonWolfen Well-Known Member

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    Loan the money to Jena..see (Buying a meat shop?) post on this forum. Insist she buy appropriate insurances to cover you...and your in.....a no lose for both of you!
     
  9. Good question, Torch. Like a lot of the folks on this board, I'm thinking relatively short-term, basically the three to five-year plan.

    My plan is to work like hell to save as much as possible for 3-5 years, and at the end of that time to buy a small plot of land and have enough cash left over to provide a small but reliable interest income to live on. I don't have any delusions about being able to subsist entirely on that, but it would provide a "base" that would allow me to cut the ties from the traditional job and to do something that makes a little more sense.

    I don't seem to be anywhere near the amount of money that it would take to do that, which is why I'm starting to think in terms of investing, which I have never before had the nerve to get into.

    Thank you all for your replies--they're stirring some thought.
     
  10. chickflick

    chickflick Well-Known Member

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    Not to negate what has been suggested so far; but in the words of Margaret Mitchell for Scarlett O'Hara's daddy:

    "Land's the only thing that matters, the only thing that lasts." :):) (I just LOVE that!! :worship:

    eh hemm.. anyway... too bad there are property taxes.. but if you study and play your cards right.. there is NOTHING more secure or profitable than real estate.

    There are SOOOO many ways to make money with it. You could even LIVE in and fix up one (take two years, cause the tax breaks are wonderful) then resell at a much higher rate. This one comes to mind since you are kind of stuck where you are for a while. When you sell, you can either do it again.. or go for the homestead.

    Sounds simple.. but STUDY! You'll like what you learn.

    It is also my opinion never to put off til tomorrow what you can do today when it comes to your daily way of life/happiness. Maybe if you sit down w/pencil and paper you actually COULD go for it NOW? What is REALLY holding you back? Find out.. study the area you would LIKE to be... Be Creative. There IS no promise of Tomorrow!

    (Wow.. I'm inspiring myself, here! :eek: ) Anyway.. you get the picture.
     
  11. heelpin

    heelpin Well-Known Member

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    There are SOOOO many ways to make money with it. You could even LIVE in and fix up one (take two years, cause the tax breaks are wonderful) then resell at a much higher rate. This one comes to mind since you are kind of stuck where you are for a while. When you sell, you can either do it again.. or go for the homestead.

    If I was a young man this is what I would do, Chickflick is onto something here, buy a fixer-upper and live in it until the capital gains become "TAX FREE".

    The downside is the chance that real-estate is at a top and property values could head South with a rise in interest rates but I still think it could be very profitable if the right property is chosen.
     
  12. Terri

    Terri Singletree & Weight Loss & Permaculture Moderator Staff Member Supporter

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    I decided to buy the land now, and build as I could afford it. That way I get advantage of the low interest rates.

    On the DOWN side, the old pickup died right after we bought the land, so I have not been able to put down the extra payments that I was intending to.

    Still, I can put in perrenials and such to get me off to a good start. Property taxes are only $30 a year, as it is unimproved land.
     
  13. Hi,

    Well if you want to invest but do not want to lose money then you will have little opportunity for a good profit. No risk no reward! But then again you should never invest any capital you are not willing to lose if it happens you make a bad decision. The safest investments are real estate in areas with good potential but unless you are in an over demanded area like south Florida then you will most likely have to hold the property for over 5 years to make it profitable. Other then that, treasury bills are a safe investment – more specifically Treasury Inflation Protected Securities (TIPS). While they will not deliver great profits they will deliver more then a bank and will compensate for the factor of inflation. They are the safest investment possible. You can find more information here.
     
  14. fordy

    fordy Well-Known Member

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    ............Seems to be some very sophisticated advisers here and I would like ANYbody to critique my idea. This is not strictly about investing but rather about the overall plan. I currently live on 5 acres here in north central texas. I would like to Move to southern n.mexico or n.eastern az. I'm not really sure as to the market value of this place but it is paid for. It seems that a point of leverage in procuring land in or around a relatively high dollar per acre area is to buy a place withOUT either electric or phone or water , but with all weather access via a county or forest service road.
    ...........Next the money saved on the lower priced land can be utilized to procure both a passive solar electric system and maybe a water well if affordable. I'm still alittle confused as to whether or not you can live on a piece of land with an Outhouse and NOT have to install a septic system. I know folks are doing this because some have posted here from time to time on this website . The property taxes here in texas are becoming very onerous and I'm having to almost pay 200 amonth even though I'm debt free.
    ...........I won't say I'm Mr. fixit but I can weld , nail, and I feel I'm more than capable of building my own home. I plan on buying a used but modest 5th wheel to livein until I get my home and outbuildings standing.....that's it , pretty much but condensed . Thanks in advanced for all comments , ...fordy... :eek: :)
     
  15. Shrek

    Shrek Singletree Moderator Staff Member Supporter

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    Open a $750 online trade account and use the profits to build up your self relient aspects. As your self relient aspects make a return , add some to your investments account. After a couple years, you have a diversified income / sustainence system and have a little cash coming into your pocket also.
     
  16. Terri

    Terri Singletree & Weight Loss & Permaculture Moderator Staff Member Supporter

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    I never give advice about machinery because I have trouble understanding it, but I DO have a question.

    What is the advantage of having a fifth-wheel as opposed to a travel trailer? I would think that, either way, the living part would be parked and left. That means that you would be driving the pickup part and putting wear on it.

    What happens if the pickup half becomes totalled or terminal? Would that affect the resale of the other half of the fifth wheel, as the pickup half cannot be replaced at the nearest used-car lot.

    Again, I do not give advice about machinery because I am all thumbs with engines. Just a question.
     
  17. fordy

    fordy Well-Known Member

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    .........................Ok terri, pay close attention. When you attach a 5th wheel, (from here on I'll refer to them as a 5'ver) to a pickup you transfer a portion , say 15 to 18 % of the weight of the trailer over...ONTO...the truck. This gives amuch better weight distribution between trk and trailer. It, also effectively shortens the TOTAL length of trk and trailer. Plus, the rear tires on a '5ver will follow the footprint of the trk ..closer....than they will on a TONGUE pull trailer that is attached to the Bumper of the trk. The three most important factors in pulling trailers are ALL in conformity and working together when the trk and trailer are configured as a 5th wheel setup. Those three factors are, (1) Control.....of the trailer by the towing vehicle , (2)Maneuverability....of the unit is Much better with the '5ver , (3)Favorable Weight distribution betwixt the truck and the trailer.......hope this helps....fordy... :eek: :)
     
  18. Mike in Ohio

    Mike in Ohio Well-Known Member

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    If you are looking at investing in stocks, I would recommend Exchange Traded funds (ETFs). They present several advantages compared to either mutual funds or individual stocks.

    The main problem with mutual funds (in not tax advantaged accounts) is how capital gains are handled. You may find yourself with a "capital gain" even though the fund hadn't moved up since you bought it. The other issue with most mutual funds is that prices are set once a day so unless you place your buy or sell order just before close, you are undertaking market risk.

    The main problem with individual stocks is that you lack diversity of risk.

    With ETFs you can buy and sell just like individual stocks. However, each ETF share represents a basket of stocks. So QQQ (symbol) represents the top 100 companies on the NASDAQ. You can buy sector funds in energy, communications, retail, hotels (whatever).

    You should do your own due diligence and research regarless what you are investing in.

    Mike
     
  19. pointer_hunter

    pointer_hunter Well-Known Member

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    Fordy, I’m not sure you would be interested in this idea, but here is something that you could think about…

    If your 5 acres is paid for and set up as a homestead already, you could sell the property on a land contract type deal. You could ask for enough up front to pay for your 5th wheel, moving expenses, and down payment on your new land. Then you can ask for a monthly payment that is higher then the payment owed on your new land, i.e. new is 400/month you can ask 500/month for your 5acres. That way, you are making money each month from your old property which is paying for your new one. If you didn’t need money up front, you could consider keeping your 5acres and just rent it out. You can find a very dependable renter if you look hard enough. That way, you constantly have money coming in to take care of your new land and if for some reason it didn’t work out where you go, you could always come back to your 5acres. Just an idea….
     
  20. chickflick

    chickflick Well-Known Member

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    WRONG!! I HAVE a property like that. Matter of fact, my youngest was BORN in that house.. I sometimes think of selling where I am and using the profits to pay off/update-decorate THAT house.. BUT .. one problem.. It is ON a CONTRACT FOR DEED (i.e. 'land contract'). The purchasers/owners have a right to remain there. I can't just indiscriminatly decide to boot them out, and neither could Fordy under your plan.

    Now.. I HAVE considered offering 'bribe' money for her to leave.. but have not yet Seriously approached the buyer/owner OR made up my mind I want to leave here.... Just letting you know there's a LITTLE more to that part of your idea. (The rest sound reasonable) :)