I know a few here read the Barefoot Investor and can imagine a few more can probably relate to the story about the wife, especially when their "investment" has lost money. So own up, who is it?
A telling and (at least to stackers) depressing evaluation. As for the Mr and Mrs.... It sounds to me like the divorce lawyers will end up getting the gold.
Barefoot Investor is a great admirer of Buffet and I'm surprised he hasn't picked up on the fact that Buffet is buying assets and holding a giant amount of cash. BI continues to plug the standard version of shares always do best and he's for holding because things always get better and losses are regained. He has good advice for avoiding debt and he did a nice hatchet job on the housing circumstance a few weeks back, but I don't share his optimism. If the goldstacker is here - then time will prove you're right - tell your wife we all agree.
As far as the stacker in the article (be they real or fictional), I agree with the wife. Stupid decision. I like fold as much as the next guy, but you shouldn't go all in...
Sound advice. I put a portion of money the wife and I had in silver at 37$ and have been buying all the way down to 14$. Stupid? Possibly. Does she think i"m an idiot? Some of the time. Will she want a divorce over it? Not a chance. I really cannot find fault in Peter's thinking. Mathematically, many nation's finances are in the toilet. Anyone that studies exponents realizes the debt explosion cannot go on indefinitely. I would not feel good if all my investments/ "assets" were solely in paper.
2 people made the choice, she didn't need to join the smsf or agree to invest in gold and only has herself to blame.
For most of the 1800's right through the 30's $1 of gold was around 1.4 grams, or about $49USD today. Throughout that period up until the mis 20th C. 1 was .02354oz of gold or 163 new pounds today for an increase of 68 times (1 old pound = 2.4 new pounds). So you are looking at a range of between 50-68 times the $1 or you put in. Where the hell did this guy get $3.21? Indeed you could still buy a sovereign for 1 Australian in many people's lifetimes, today that's $353 worth at spot and at $2 for every 1 it's an increase of 176 times. Even if you go back to when they stopped minting them here in Australia in 1931 you are looking at a better than 200% annuallised return at today's prices over that period with no risk at all of default, currency crash, bankruptcy, corporate legal action or other stock market nastyness Meanwhile only a very small fraction of the companies that existed in 1802 or even 1900 around today, there's a serious risk. Obviously in a healthy economy you should have equities in your portfolio but it's wholly disingenuous to say that shares have a similar risk profile to gold but that they just perform better, it's a nonsense.
I Agree. Sure there is a huge debt build up in the system, however it does not then mean that the system will collapse straight away. This could go on for ages before anything happens. How is this guy going to pay for his retirement on an ongoing basis without a growing balance from dividends and income? His future is now 100% tied to the outcome of Gold whatever that may be. A percentage of Silver and Gold is important in a portfolio, but 100% is cray cray.
Maybe I'm missing the point but it would seem that, from the highs of 2011, Australian folk who purchased gold aren't that far out of pocket. As we speak an ounce of gold in AUD is $1485 AUD. Highest gold price in AUD, $1806.08 - 22 Aug 2011. http://goldprice.org/gold-price-history.html 1806 -1485 = 321
There is also the opportunity loss probably not calculated in, which I usually just calculate as interest from an online savings account. In this case that would probably be between 10-20k
Bit of a weird point in time to choose shouldn't they look at purchasing since 1971 when the US removed the gold standard ? They are comparing bacon to oranges by comparing 1802 gold back currency to 2013 fiat. You have lost alot more then 5c you have lost from 78% of the value to 93% of the value Overall since getting rid of the gold standard GOLD is the biggest winner it has increase the highest percentage it has increased more then the s&p 500 index and it well there is no comparison to putting $1 under your bed
I rate opportunity cost way higher than bank interest.... as nobody rates bank interest anymore. See here if you think you are not far out of pocket since 2011. : http://forums.silverstackers.com/message-827592.html#p827592
You have to include the alpha and beta of your investment, it probably is higher than gold, though nowhere near the difference this guy has portrayed by a long shot. You also risk owning an AOL, Worldcom, AIG or Enron or one of the financials that went belly up in 2008, which I'm sure is not priced in, they've likely done a simple index track which is not how people tend to invest. How this guy got $3.21 is completely beyond me.