Author Topic: Gold is a Terrible Investment - According to Dave Ramsey  (Read 111126 times)

Offline Castle6

  • Survivor
  • ***
  • Posts: 102
  • Karma: 4
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #90 on: September 08, 2010, 05:53:33 PM »
I wrote this today before I found this thread.  Keeping in mind that gold is not an investment, but is instead a hedge, I have the following example to offer (especially for use with reluctant spouses on why hedging with gold (or silver, but I'm trying to keep this simple) makes sense even at current prices):


So I'm listening to my favorite "gold bug" radio show* this morning and it started me thinking about inflation and the declining purchasing power of the dollar.  I decided to jot down my thoughts to demonstrate the ravaging effects of inflation on the dollar compared to the literal "gold standard" and to address the "is gold heading for a bubble and crash" talk that's all the rage these days.  While I'm certainly not the first to address this topic in this fashion, I'm trying to do it in a "layman-friendly" and brief manner.

------
 
There have been a lot of "experts" talking lately about the rise in the price of gold and whether gold is in an "overvalued" situation.  You know, one of those dreaded "bubbles" we keep hearing about?  Well, let's take a quick look at the numbers and see how the experts' theory actually pans out.
 
Let's say you currently make $100,000 a year.  That sounds pretty good, doesn't it?   A lot more than your grandparents or maybe even your parents made.  But, just how much is that $100,000 worth in inflation-adjusted 1913 dollars (1913 being when the Federal Reserve was created and our "modern money" born)?
 
Adjusting out the last 97 years of inflation, your $100,000 salary today would have earned you $4,506 in 1913 dollars (according to the Federal Reserve**).  Sounds pretty good, especially since we all know that "everything was cheaper back then", right?  In 1913, gold and silver coins were still in common daily use by the average American.  You could take twenty $1 bills to the bank and walk out with a shiny new $20 US gold coin.  So, if you had been paid your $4,506 salary in $20 gold coins it worked out to 225 $20 gold coins for your 1913 salary. 
 
Today, those same $20 US gold coins are going for about $1,400 apiece***.  Multiply those 225 gold coins you earned in 1913 by $1,400 and you get $315,000.  So, in gold terms, you currently earn 32% of what you would have earned in 1913 ($100,000/$315,000).  Or, to put it another way, $68,254 of your current $100,000 salary has vanished into the thin air of inflation, leaving you with only $31,746 in inflation-adjusted salary. And that's before taxes take a third or more of that amount.  How's that $100,000 salary paid in federal reserve notes holding up now?
 
And the "experts" say gold is "overvalued", headed for a "bubble" and not worth spending your "real money" on....  You come to your own conclusions.  Then act on them.

Semper Gumby,
Castle6
 
 
References:
*     http://patriotarchives.blogspot.com/
**   http://www.minneapolisfed.org/
*** http://www.apmex.com/Category/227/2000_Double_Eagles_Saint_Gaudens_1907_1933.aspx
 
 
© All rights reserved by Castle6.  No distribution without attribution.   :P
« Last Edit: September 08, 2010, 05:55:57 PM by Castle6 »

Offline chrisdfw

  • Dedicated Contributor
  • ******
  • Posts: 1300
  • Karma: 63
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #91 on: September 08, 2010, 08:34:32 PM »
^ I think you just made the argument that gold is overvalued. If Gold has maintained its value and not shot up, if you converted your 4506 to gold and then took it forward to present and converted back to gold, then you should get exactly 100,000.

Your argument supports the fact that gold has shot up faster than inflation and therefore might be in a bubble. You are saying gold is good
because it had a great run up since 1913. That is akin to saying tech stocks were a great deal in 1999 because they performed so good for the
last 10 years.

I don't know if gold is overvalued or not. But your argument makes the case that it is overvalued. if your 1913 equivalent salary converted to gold and then back to cash in the present time was undervalued the gold would be worth less than 100,000. If that was the case I would be a buyer again. I was a buyer around 380/ounce.

Offline Mr. Bill

  • Like a hot cocoa mojito
  • Administrator
  • Ultimate Survival Veteran
  • *******
  • Posts: 15344
  • Karma: 1878
  • Trained Attack Sheepdog/Troll hunter
    • Website Maintenance and Online Presence Management by Mr. Bill
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #92 on: September 09, 2010, 10:26:08 AM »
...Your argument supports the fact that gold has shot up faster than inflation and therefore might be in a bubble. ...

Either that, or it supports the official inflation statistics being way too low.  Hard to know which is true -- both, would be my guess.

Offline chrisdfw

  • Dedicated Contributor
  • ******
  • Posts: 1300
  • Karma: 63
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #93 on: September 09, 2010, 04:38:32 PM »
Either that, or it supports the official inflation statistics being way too low.  Hard to know which is true -- both, would be my guess.


True, but since he used it to deflate the income it is a relevant measure for comparison when you reinflate the gold prices. As long
as you use it for both sides it doesn't really affect my argument.

But I actually think the inflation measures are all wrong, but not because they are too low, because they include things that didn't exist
when they started. We think that we need a computer now. We think we need a phone, you can't compare the cost of those things
because they didn't even exist then. If you look only at the cost of living, that would be a fair comparison.

Good job picking up on the issue though.

endurance

  • Guest
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #94 on: September 09, 2010, 04:48:56 PM »
Why is it that the CPI, the primary number that the government uses to measure inflation, fails to account for the two things you really don't have a choice in buying (food and energy)?  Easy, if the CPI were an accurate measure of inflation, they're have to pay more interest on Government bonds, particularly on TIPS (treasury inflation protected securities).  They want the number to lie so they can inflate at a greater rate than they have to pay on the interest.  It's a brilliant scam, but if you tried it in the private sector you'd be arrested for fraud.

Offline tamo42

  • Survivalist Mentor
  • *****
  • Posts: 527
  • Karma: 23
    • The Primal Prepper
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #95 on: September 09, 2010, 05:00:10 PM »
Don't forget inflation adjusted social security payments.  Yes, the gov is heavily incentivized  ( by itself ) to downplay inflation

Offline Castle6

  • Survivor
  • ***
  • Posts: 102
  • Karma: 4
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #96 on: September 09, 2010, 11:00:40 PM »
Apparently in my desire to be brief I failed to flesh out my example sufficiently.

If $1.5 trillion dollars was created from the birth of our nation through 1980 (which it was), and that moved gold from the old pegged price of $35 to $850 per ounce, what will the price of gold be once we wake up and take into account the $12 trillion dollars we created between 1980 and 2008, or the additional $10+ trillion dollars we've created in 2009 and 2010?  The more they dilute the currency, the higher gold has to go to keep up with it.  

My main point is that if you held paper dollars all this time, you'd only have 1/3 the value you would have if you had put those paper dollars into gold.  In short: Gold holds its value over time, paper money does not.  To hedge the loss of the value of paper dollars due to inflation, buy gold.  People are realizing these things and bidding gold higher.  Unless the Fed stops printing dollars, this trend is likely to continue.

Also, I agree that the inflation numbers put out by the Gov't are pure BS.  "Core" inflation doesn't include food and energy.  Sure, take out the 2 things we all use every day so we don't see the real effects.  No, I never eat or drive so I shouldn't be worried about those prices.   ::)

PS - If you think your gold is overvalued, I'll be glad to buy it from you at the old historic pegged price of $35.  I'll buy up to 300 ounces at that price.  Drop me a PM so we can make arrangements.   :P
« Last Edit: September 09, 2010, 11:06:30 PM by Castle6 »

Offline chrisdfw

  • Dedicated Contributor
  • ******
  • Posts: 1300
  • Karma: 63
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #97 on: September 10, 2010, 08:43:39 AM »
PS - If you think your gold is overvalued, I'll be glad to buy it from you at the old historic pegged price of $35.  I'll buy up to 300 ounces at that price.  Drop me a PM so we can make arrangements.   :P

I'd buy it at that price too.... I was a buyer at $380, seller at $850. I'd buy all that is available at $35, to sell at current market immeadiately. I'd buy it at $1100 to immeadiately sell at $1200, but that doesn't mean I don't think it is over-valued. :)

Gold has been a great investment compared to paper, but nobody would hold paper, it would be invested in something. Even Bonds have had an incredible bull market over the last 30 years. Which makes them over-valued in my opinion, but we might have deflation and that means the bull market
in bonds could continue for a while, and gold could fall. Or inflation and gold could rise and bonds could fall. I just don't know. 2-3 years from now if we haven't had deflation it will become clear whether gold is the way to go or not. Eventually gold should be a good investment, but if it falls in half between now and then, I would prefer to hold twice as much. What happends between now and then is important for people like me that aren't wealthy.

Offline Castle6

  • Survivor
  • ***
  • Posts: 102
  • Karma: 4
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #98 on: September 10, 2010, 09:14:54 PM »
Not intended to "seal the deal", but check out this chart:



http://www.netdania.com/Products/live-streaming-currency-exchange-rates/real-time-forex-charts/FinanceChart.aspx

The parallel price channel must also be determined by human interaction. What we are trying to do is the LEAST ARBITRARY thing for our analysis. ...

Edited due to copyright issues -- please see here for Fair Use info.  See following post for article link.

So, in summary:  You can say that gold is either overvalued or undervalued.  Take your pick.  With the gummint printing money faster than at any time in our country's history, I'm betting on undervalued.  I've put my money where my keyboard is.  What you do depends upon what you believe.  I'm not psychic nor did I stay at a Holiday Inn Express last night so I can't for sure what's next.  But I've made my decision.  Time for you to make yours.   Either way, if one or both of us is wrong..... don't sue me.   ;D



« Last Edit: September 11, 2010, 10:49:29 AM by Mr. Bill »

Offline Castle6

  • Survivor
  • ***
  • Posts: 102
  • Karma: 4
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #99 on: September 10, 2010, 09:24:55 PM »
Forgot to attach the attribution to the above post.  It's from: http://www.marketoracle.co.uk/Article22435.html

Offline tamo42

  • Survivalist Mentor
  • *****
  • Posts: 527
  • Karma: 23
    • The Primal Prepper
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #100 on: September 10, 2010, 10:12:19 PM »
If you a going to do long term charting that covers a wide variety of prices, it should be in semi log format.

Offline chrisdfw

  • Dedicated Contributor
  • ******
  • Posts: 1300
  • Karma: 63
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #101 on: September 11, 2010, 12:36:47 AM »

So, in summary:  You can say that gold is either overvalued or undervalued.  Take your pick.  With the gummint printing money faster than at any time in our country's history, I'm betting on undervalued.  I've put my money where my keyboard is.  What you do depends upon what you believe.  I'm not psychic nor did I stay at a Holiday Inn Express last night so I can't for sure what's next.  But I've made my decision.  Time for you to make yours.   Either way, if one or both of us is wrong..... don't sue me.   ;D

Its all matter of when not if, I am sure at some time gold will be lower and at some time gold will be higher. Everyone will be right eventually I bet.

Offline Castle6

  • Survivor
  • ***
  • Posts: 102
  • Karma: 4
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #102 on: September 11, 2010, 01:54:11 PM »
If you a going to do long term charting that covers a wide variety of prices, it should be in semi log format.

Feel free to tell Robert Prechter.  It's his chart and analysis that I posted (and gave attribution to).  Since the excerpt I posted has been pulled by the moderators, here is the link to the full article:  http://www.marketoracle.co.uk/Article22435.html

Snip from Wikipedia:  In 1979 Prechter left Merrill Lynch and published the first subscription issue of the Elliott Wave Theorist. The 1970s had been very bullish years in the gold market but mostly bearish for stocks, yet his Elliott wave analysis called for a long-term reversal lower in gold (February 1980) and a long-term "super bull market underway" in stocks (October 1982). Because these forecasts proved mostly correct—especially for the stock indexes—Prechter's following grew.   

http://en.wikipedia.org/wiki/Robert_Prechter

Offline Hraz

  • Survivalist Mentor
  • *****
  • Posts: 570
  • Karma: 6
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #103 on: September 29, 2010, 01:19:01 PM »
Wow, this post is almost a year old now. I wonder if Dave is still against gold? I haven't listened to him in a long time.

Offline LJH

  • Dedicated Contributor
  • ******
  • Posts: 1218
  • Karma: 63
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #104 on: September 29, 2010, 01:37:17 PM »
Wow, this post is almost a year old now. I wonder if Dave is still against gold? I haven't listened to him in a long time.

Yup, he's still railing against gold as an investment but I can't help but think that, even though he would never admit it, he wishes he'd put some $$ in gold a few years ago and could cash it out now. He says he's buying up real estate as fast as he can right now while prices are so low, also still in the market big-time.

I like listening to his podcasts and have learned a lot from them. His basics are sound; you can't go wrong getting out of debt and living below your means, but I look at the house he just built and wonder if even he could maintain such a spread in the event of a total crash. Sure, it's paid for, but hell, just heating and cooling that place probably takes more money than I make in a year. And having thousands of rental units won't do you much good if half your tenants can't pay the rent. In a worst-case scenario I think Jack and a bunch of the rest of us will be better off than Dave.


http://virtualglobetrotting.com/map/dave-ramseys-house-1/

endurance

  • Guest
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #105 on: September 29, 2010, 04:18:15 PM »
I like listening to his podcasts and have learned a lot from them. His basics are sound; you can't go wrong getting out of debt and living below your means, but I look at the house he just built and wonder if even he could maintain such a spread in the event of a total crash. Sure, it's paid for, but hell, just heating and cooling that place probably takes more money than I make in a year. And having thousands of rental units won't do you much good if half your tenants can't pay the rent. In a worst-case scenario I think Jack and a bunch of the rest of us will be better off than Dave.
Good lord, what a rediculous spread!  I checked the history for my new little place.  Highest gas bill in the last 5 years: $240 Highest electric bill in the last 5 years $110.  That's with single pane windows, 1.5 inches of vermiculite insulation (probably R10), and doors that don't even close properly, but that's what you get with 891 square feet to heat.  With the new high efficiency boiler, on demand hot water heater, R60 blown in insulation, new windows and new doors, and wood stove that I plan on putting in, I'll be surprised if I ever get over $100 combined.  Square footage is incredibly expensive, now and later, whether it's paid for or not. 

I'm glad Dave has done well.  He's done a great deal to help a lot of people, but a prepper, he is not!

Offline RationalHusker

  • Survivalist Mentor
  • *****
  • Posts: 826
  • Karma: 33
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #106 on: October 02, 2010, 01:59:34 PM »
I thought I'd expand on Jack's original analysis in some more detail.  Jack calculated the return on the investment by putting in $10,000 at the beginning of each decade.  I went through and dollar-cost averaged on a monthly basis.  I'm not trying to show whether or not gold is currently overvalued.  Just showing how it's "performed" as an investment since January, 1975 (roughly 4 years after any kind of gold backing was removed from the dollar).  I thought it was appropriate to start in 1975 because by that time the impact of a former gold-dollar tie was completely unwound.  My methodology was as follows:

I assumed that an "investor" bought $100 worth of gold at the closing price (US dollars) on the first day of each month since January 1975.  In other words, I dollar-cost averaged $100 per month, regardless of gold or stock prices, on the first day of the month for 35 years.  I did the same thing for the DOW, assuming our hypothetical "investor" bought 100 shares of the DOW at the closing price on the first day of each month since 1975.  The only thing that's unrealistic about this is that it's likley that a real investor would increase the amount of his/her investment, in dollars, over time.  It seems to me that since the past 10 years have obviously favored gold, that would benefit our gold investor, not our DOW investor.

If our investors both started on January 1, 1975, our investors would have accumulated the following number of dollars invested, ounces (gold) or shares (DOW), and total worth (price of ounces/shares in US dollars) by each of the following dates:

By January 1, 1980:
The gold investor has invested $6,000, owns 35.85 oz of gold, and his/her gold is worth $20,058.  The DOW investor also invested $6k, owns 7.01 shares of the DOW, but his/her shares are only worth $5,875.73.  The DOW investors actually lost $124.27 in this 5 year period.  Most people know this was a very good period for gold, so this should be no surprise.

By January 1, 1985:
By this time the 1980 gold bubble had deflated.  The investors had both invested $12,000.  The gold investor owned 49.92 oz of gold.  His/her gold was worth $15,249.10.  The DOW investor owned 13.07 shares that were worth a total of $15,830.86.  So from 1975 to 1985, the investor that dollar-cost averaged into the DOW had accumulated about $580 more than the gold investor

By January 1, 1990:
We know the mid to late 80s included a very good stock market run, so it should be of no surprise that by 1990, the DOW investor had outperformed the gold investor with their $18,000 of investments to date.  The gold investor has 65.69 oz of gold worth $26,210.54.  The DOW investor has 16.26 shares worth $44,763.46.  From 1975 to 1990, the DOW investor has increased his/her wealth 1.7 times more than the gold bug.

By January 1, 2000:
This period includes the dot com tech bubble and a very depressed period for gold.  The gold investor has invested $30,000 in 100.32 shares of gold worth a total of $28,293.95.  The DOW investor has turned his $30,000 into 19.06 shares of the DOW worth $219,177.73.  Very impressive for the DOW.

By October 1, 2010:
This is essentially where we are today, after 35 years of dollar-cost averaging.  The gold investor has accumulated 129.2 oz of gold at $1316.25.  His total amount invested would have been $43,000  His gold would be worth a total of $170,054.  Our DOW investor would have also invested $43,000, and his 20.32 accumulated shares would be worth a total of $160, 528.94.  Gold wins for the long term investor!

What if you haven't been investing since 1975?  Next I'll compare how our two hypothetical investors would have done through October 1, 2010, if they'd started investing at various starting points.

Started investing on January 1, 1980:
Let's say you got in right about the peak of the gold bubble in 1980 and kept on dollar-costing up to the present.  The gold investor would have 93.35 shares of gold worth a total of $122, 866.94.  The DOW investor would have 13.31 shares worth a total of $143, 664.47.  The DOW investor wins here, which isn't surprising since the gold but started buying in at the peak and the stock investor got in when stocks had experienced a major downturn in the mid-late 1970s.

Started investing on January 1, 1985:
Gold Guru has 79.28 ounces worth a total of $104, 353.43.  Dr. DOW has 7.25 ounces worth $78,268.15.  Both did well with their $31,000 of investments, but Gold Guru is much better off.

Started investing on January 1, 1995:
Gold Guru owns 47.09 ounces worth $61,983.94.  Dr. DOW owns 2.17 shares worth only $23,451.13. 

Started investing on January 1, 2000:
The gold investor owns 28.88 ounces worth $38,014.23.  The DOW investor owns 1.26 shares worth $13,643.54 - nearly 3 times less than the gold investor. 

Conclusions:
Pretty much the same as Jack.  Unless you started buying one or the other at a major peak, it's hard to say which has been better.  But for the last 35 years you can say gold has outperformed the DOW index.  I have a coworker with an MBA that was just regurgitating something one of his elite profs said...basically that over any prolonged period, stocks have outperformed any other investment.  This guy also said commodities in general were poor long term investments.  My take is any recognized investment is a good one if you buy and sell at the right time.  If you're not a trader but invest for the long haul, just don't sell at a low if you don't have to, and odds are it will come back.  Of course, like many on this board, my thoughts about the viability of our current economy and currency make this a bit more complicated.  The most bitter thing for me?  I started investing in 2001, and thought it was great that stocks were "on sale" with the recession and 911.  I knew nothing of gold.  Somebody tipped me off to gold investing in 2003, but I didn' listen.  Wow, if I had even invested just 20% of my saving in gold I'd be sitting very well today.  Hindsight is always so painfully clear, isn't it? 

My gold price info came from www.kitco.com, and the DOW prices are widely available.  If anybody is really interested in this analysis, let me know and I'll email you my Excel spreadsheet so you can review or manipulate the data further. 

Offline Mr. Bill

  • Like a hot cocoa mojito
  • Administrator
  • Ultimate Survival Veteran
  • *******
  • Posts: 15344
  • Karma: 1878
  • Trained Attack Sheepdog/Troll hunter
    • Website Maintenance and Online Presence Management by Mr. Bill
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #107 on: October 02, 2010, 09:30:08 PM »
I thought I'd expand on Jack's original analysis in some more detail. ...

Excellent post!  Thank you. :)

I do think a key issue is that, as of 2010, gold has (depending on your viewpoint) returned to a rational price, or been driven up by an investment bubble.  Whatever the reason, gold is valuable now, and it was way less valuable (and dropping) for a very long period after 1980.  If you redid your analysis with, say, 2000 as the endpoint, gold wouldn't look so good.

I'm not meaning to criticise either your analysis or gold.  But I do think that there's no single way to store your wealth that is reliable under all circumstances.

Thank you for giving me an excuse to recommend DIVERSIFYING YOUR INVESTMENTS -- I have to post something about that every few months, otherwise I feel I'm not doing my duty here. ;D

"Markets can remain irrational a lot longer than you and I can remain solvent."  (Attributed to Keynes -- possibly one of the few things he got right, along with his famous last words "I should have drunk more champagne.")

Offline RationalHusker

  • Survivalist Mentor
  • *****
  • Posts: 826
  • Karma: 33
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #108 on: October 03, 2010, 06:23:20 AM »
Mr. Bill,

You're absolutley correct!  I thought about that, but figured my post was already too long and I had already spent too much time on it.  Timing is important, and timing doesn't necessarily mean trading on a short term basis.  Just undestanding the rationale behind allocation (i.e., diversification).  I read and respect a lot of experts that are 75-100% into gold and silver assets, be it bulion or mining shares.  That's just to big a gamble for me.  I'd still feel better about that than the 75%+ I had in U.S. stocks 3 years ago, but you just never know what the currency manipulators...er, I mean, managers...are going to do.  If there is an allout currency war and race to devalue, the extreme gold bugs will come out better than anybody else.  But they could be wrong, too.  Thanks for your comments.

Offline chrisdfw

  • Dedicated Contributor
  • ******
  • Posts: 1300
  • Karma: 63
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #109 on: October 03, 2010, 12:23:25 PM »
But I do think that there's no single way to store your wealth that is reliable under all circumstances.
.....
"Markets can remain irrational a lot longer than you and I can remain solvent."  (Attributed to Keynes -- possibly one of the few things he got right, along with his famous last words "I should have drunk more champagne.")
Approximate percentages for new investment
25% in cash
25% in silver
50% in businesses that cash flow - Here is what I mean by this. I am investing money back into my own business, but also setting aside cash to invest in others businesses and rental real estate (I like real estate at current prices as it has two components, the cash flow from rent, and the asset)
I am not currently putting anything into the stock market, but may in the future.
I have invested in the stock market in the past and may again, the point is that this changes. There have been points where I was as much as 75% into the stock market, and as much as 50% into gold (loved gold at 380 per ounce)




I think these three things about say it all.
What works on one period will not work at all times and in all places.
Don't second guess the markets, you can get bankrupted before being proved right.
We should have more fun.. because we will all die.

Here is what I am doing with my money right now: (your mileage may vary)

endurance

  • Guest
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #110 on: October 04, 2010, 01:19:04 PM »
Thank you for giving me an excuse to recommend DIVERSIFYING YOUR INVESTMENTS -- I have to post something about that every few months, otherwise I feel I'm not doing my duty here. ;D
My latest form of diversification is destined to yield close to 200% per year after taxes.  I just had new insulation put in my attic, upgrading from R14 to R60 (mountain property).  It cost $840.  The local utility company will give me a 20% rebate.  The state will give me a 40% rebate.  I get to write off 30% on my federal income tax.  After that, I'll save roughly $10-20/month in heating and cooling costs for the next 20 years.  Now that's a better investment than gold!

I think that if I've learned anything from Jack and the forum it is that investments in the homestead is a great place to put your money and sweat equity to work.  If it saves you future expenses or produces something you need on a regular basis, in the end you'll get a great ROI.

Offline 2mommas

  • Prepper
  • **
  • Posts: 70
  • Karma: 4
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #111 on: November 17, 2010, 11:04:36 PM »
You can't eat Gold, and can't buy food if it is not available in the stores.

Offline Taylor3006

  • Survivalist Mentor
  • *****
  • Posts: 492
  • Karma: 42
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #112 on: November 17, 2010, 11:44:51 PM »
You can't eat Gold, and can't buy food if it is not available in the stores.

Not sure what kind of preparedness minded individual would buy only gold and not storage food but my guess is that they would deserve to starve to death for sheer stupidity's sake. On the flip side, I paid for a root canal with a 1/2 oz gold eagle that had cost me about $190 back a few years ago. How many chickens, or beans, or pounds of rice would you have to pay the dentist for a similar procedure considering the bill was close to $700? Could you imagine having to pay for an emergency appendectomy with storage food?

Financial preparedness is more than having food and toilet paper put away for when the shelves are empty. It is also about being able to pay for services or items you can not store away in mylar bags and buckets. There is nothing wrong with putting your money in metals after you have put up everything else you may need, pretty damn silly not to IMHO.

Offline LvsChant

  • Resident Master Mudder
  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 7818
  • Karma: 614
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #113 on: November 18, 2010, 06:41:19 AM »
good point, taylor! I love the bartering idea... good "when times get rough, or even if they don't"

Hare of Caerbannog

  • Guest
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #114 on: November 18, 2010, 09:41:36 AM »
You can't eat Gold, and can't buy food if it is not available in the stores.
You can't eat that extra 5 gal. of gas in the garage.
You can't eat $2000 in emergency cash you have in the fire proof box, especially after it gets devalued by the fed and a loaf of bread is selling for $1.2 trillion.
You can't eat the stack of fire wood you have to back up your main home heating.
You can't eat the extra blankets you put in the trunk of your car.
You can't eat a box of ammo.
You can't eat a solar panel.
You can't eat the extra lock you put on your front door to secure it.

Each different thing we do is for a different purpose.
We buy and save precious metals, not because anyone thinks you can eat them, but because they hold their value no matter what happens. Its been that way for at least 5000 years that we know of. There's no logical reason to think things will change.

Offline wdrobins

  • Survivor
  • ***
  • Posts: 160
  • Karma: 8
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #115 on: November 18, 2010, 11:12:22 AM »
Good point, Hare of Caerbannog!

Offline LJH

  • Dedicated Contributor
  • ******
  • Posts: 1218
  • Karma: 63
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #116 on: November 28, 2010, 03:04:28 PM »
Just as I suspected, I could almost live on what Dave Ramsey paids for his monthly utilities! The phrase "If ya got it, flaunt it!" comes to mind. And no mortgage either.

Personally, I think the place is hideous and if I had that kind of money I'd keep my snug little house and buy up all the surrounding land (and a new tractor), but if that monstrosity is what floats his boat, more power to him.

http://www.coolsprings.com/news/dave-ramseys-house/

endurance

  • Guest
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #117 on: November 28, 2010, 06:33:20 PM »
Just as I suspected, I could almost live on what Dave Ramsey paids for his monthly utilities! The phrase "If ya got it, flaunt it!" comes to mind. And no mortgage either.

Personally, I think the place is hideous and if I had that kind of money I'd keep my snug little house and buy up all the surrounding land (and a new tractor), but if that monstrosity is what floats his boat, more power to him.

http://www.coolsprings.com/news/dave-ramseys-house/
"We checked with Middle Tennessee Electric and for the last 12 months, the average monthly electric bill at Dave Ramsey’s house was $1,285 per month."
Errrm, seems like it might be time to spend a little money on a few solar panels.  Actually, he probably doesn't have enough south facing roof for an electric bill that sized.  I just don't get it.  My electric bill last month was $26 with another $12 on natural gas (prior to the onset of winter).

Offline wdrobins

  • Survivor
  • ***
  • Posts: 160
  • Karma: 8
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #118 on: November 29, 2010, 02:19:34 PM »
That's quite phenomenal.  Of course Dave can do whatever he wants with his money.  But, for some reason, I just didn't picture Dave as being quite that lavish of a person, regardless of whether he can afford or not.  I guess if I had that kind of money, that certainly wouldn't be the way I would spend it.  But that's just me.  I wonder if he will have maids and butlers to care for the place?  I can't imagine his wife cleaning the house.  :)

For some reason, I have this silly notion that people who spend that lavishly are trying to make a statement or maybe impress someone other than themselves.  Maybe if I had that kind of money, my thinking about a lot of things would change.  But I can only speculate.  As the old saying goes (paraphrased), "Don't judge someone until you've walked in their shoes."

Offline 2mommas

  • Prepper
  • **
  • Posts: 70
  • Karma: 4
Re: Gold is a Terrible Investment - According to Dave Ramsey
« Reply #119 on: November 30, 2010, 12:11:24 AM »
I was not knocking gold, at all.  The point I was making was that food should be number one prep, in the case of actual EMERGENCY.
I have talked to a lot of oldtimers who nearly starved during the depression.  I asked them, if they had to do it over again, what would they do?  They said food was best way to prep and then ammunition.  Having and flashing around gold would get you robbed/killed .  If  it was an actual situation ,  many times worse than Katrina.   Of course I understand that fuel, gold and many things are important   , and should be considered if you are capable.  If you don't have a lot of resources.  Food can be used for barter .  Doctors have to eat too.   The only point I was trying to make is that Food is one barter item that everyone needs.   I guess I have heard too many starvation stories about eating dried peas for months . ;)