Gawd I just finished reading Michael Maloneys recommended book 'Guide to Investing in Gold & Silver' and now I'm confused :/ Help, help, help Na seriously Stackers any help figuring out where the heck Australia is at in the grand scheme of things would be great. You may have read in some of my other posts that we have our house on the market. Firstly it was out of fear that Australia was heading for a depression and we didn't want a huge home loan on something that ended up being worth less than what we owe the bank. But after reading the book I'm not sure we are headed that way? What are your thoughts on this? We wanted to sell the house and any money left over buy pm 's with but the market is falling so quickly I'm not sure we will have much left over when we sell other than peace of mind that we aren't in debt anymore. But he talks about having purchased real estate before hyperinflation so does that mean that we should keep the house now and pay it off quickly when hyperinflation takes over? Reading the book it sounds like depression would come first and if we sold our house now then we'd have money to buy in the depression when things were really cheap. But then wouldn't we be waiting for hyperinflation to sell off the gold & silver when it's worth stacks more and we would need that money to buy real estate with... but depression is said to come before the hyperinflation..... Yes can you tell I'm confused :/ Then I thought that the drop in real estate prices could just be a natural free market correction that is happening and have nothing to do with where we are at in the cycle? HELP!.... Please Mods, oops maybe I should have posted this thread in the economy section? Please move if need be.
Congratulations ... you are know officially in the top 0.5% of the economically literate. Well done... Your search for answers to the above will be a fruitful one I'm sure.
Yep CK is right, your on the right path in asking the questions. Remember that things quite often take longer to happen than we think so dont panic. Maybe read some of peter schiffs books and one called conquer the crash. maybe log into goldmoney and watch some of the turk interviews. I personally am not a fan of the "all in" approach for the exact reasons you point out.. i got PMs real estate and cash and small amount of shares. so if the market does crash the cash will be able to take up some shares and when the PMs go nuts i can then use some of that to move heavier into another asset class. Get to the library and find some of the books guys here recommend and be careful of what you read, dont just accept it as gospel, think about it too. you gotta read alot and then sit back with a beer and think alot.. what if this and what if that. from all that you will start to discover what YOU think. It is from there that you can make decisions. lots more to say but have typed enough for now..
Could you keep the house, downsize to a rental, take the negative gains as a tax deduction to reduce your principal on the house and write off the rent if you run your business from your new rental home? JB. - Even though I am team Jacob, I stack silver...
One very Important thing is if the home loan is fixed interest or variable. Its fixed your home are less in valor (for some years) but the home loan in a year or two is only a joke (if you have hyperinflation) or less if you have high inflation (30% or more). In argentina each ten years the cicle Begin and finished. A few cicles finished with hyperinflation the last is in 1989. Now the last two years the real anual inflation are 30% in a year time.
Good point. But I think the banks would pull some trick out of their small print terms & conditions if a fixed rate loan became like two weeks pay because of hyperinflation. They would weasel out of it for sure, somehow. Sort of like a Mike Tyson fixed rate (i.e., she said "fixed rate" but I knew she didn't mean it).
Interesting idea jrbrans, I will run some figures on that and see what it looks like. willow thanks for those references, I will look them up and keep reading. Cheers
Australia will never go broke. A: because we have massive resources on a global scale and B: we dig in, when the going gets tough. Think long term. if your repayments are (hypothetical) $700 a week. In 10 years standard rents will be $700 per week, 20 years and your better off than renting. 30 years and your semi-retired or close to it and paying less than the poor renter guy next door and own your own home. So struggle for ten, break even for 10 and profit for 10 years. The benefit at the end you will own a valuable piece of real estate and your renter mates will own nothing. Phillip
I'd agree with this except for one thing. Australian property, and thus the rents that are charged, are in a big bubble right now. Prices of real estate will decline, as will rents. When that happens, it will be the right time to buy. At the moment, for the short term, I believe renting is the way to go - though, once prices have corrected, I believe your philosophy is spot on - renting is only cheap in the short term, in the long term, buying is better. IMO, wait for the bubble to burst, then buy. Also, with the incoming SHTF, look for assets that are underpriced if you have spare income (or PM's you're willing to trade for the other assets).
One word of warning, I wouldn't place all of your wealth in precious metals because there is the chance (for whatever reason) that metal prices could decline substantially. Precious metals are a great investment but don't go overboard is all I'm saying.
He's right, remember the saying, "don't put all your eggs in one basket"? Well, still applies even if the eggs are silver & gold
