How much is too much?

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pourty
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How much is too much?

So I feel like I've "gone off the deep end".  I no longer trust cash sitting in my bank account for any but the most immediate needs (as in 1-3 months out).

Unlike many of my generation, I save, I invest, I don't have any consumer debt (other than my home mortgage, which is NOT underwater).

Up until last month, I tried to keep about 1 month's worth of home operating cash in physical cash, just in case, and another 5 months or so worth of cash in my money market checking account (which earns dismal returns, but it's fluid cash when I need it...)

Lately, though, I've started wondering about holding on to that much money in cash rather than saving it in PM's...  So at this point, I've taken about half of what I had in cash in the bank, and converted it to physical silver and gold in my possession.  (mostly silver).

So now I've got like 2-1/2 months worth of cash in the bank rather than 5.  I know there will be large expenses and at some point in the next 6 months I may have to sell some PM's to make up the difference (maybe not, I generally get a sizable bonuse in late January each year, so if there was a somewhat near-term expense, that will likely make up the difference anyway).  

Funny, several years ago, I spent money like it was going out of style and had a lot of consumer debt, and it didn't bother me much.  I'd pay it all off about once a year when I got bonuses and such.  Now, if I have less than several month's cash in the bank, I feel nervous...

So what's the turd forum opinion?  Do you keep 6 or 12 months in cash, or do you just store it away in PM's and sell if needed?  The danger is that if I had to sell quickly for an emergency, I might have to sell when the market's low.  Considering how well PM's are doing, though, I don't think it would be much loss even if I had to see on a dip...

Thoughts?

Edited by admin on 11/08/2014 - 06:06
Biscuit
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How good is your crystal ball?

My crystal ball sucks.  Big time.  I've thought that TEOTWAWKI was 'right around the corner' for about five years. What I didn't anticipate was that the EE would be able to keep kicking the can down the road as long as they have.  If I knew that tomorrow was the day that everything becomes radically different, I'd plan accordingly.  But obviously, I'm pretty lousy at timing an economic bust.

Life goes on anyway.  When I was laid off from work for over a year, six months worth of cash gave me time to start liquidating some illiquid assets. I muddled through the rough spot.  I realize now that if I lose my job again, I may never be gainfully employed again.  It appears that I'm a little too old for most employers.  I try to prepare for that.

Your dilemma is mine, too.  I'm debt free.  I've become a stacking fool.  Most of my lifetime accumulation of wealth is stored in PMs.  But, realizing that I'm lousy at timing, and that the EE has fooled me for a long time, I'm keeping about two years of expense money on hand.  About six months of that is not in a bank, but close at hand.  Having it in a bank doesn't earn enough interest to assuage my fear of not being able to get to it if we have a 'bank holiday'.  I keep this much cash to ensure that I don't have to try to trade my PMs for fiat before they've had time to fully appreciate.

But, what do I know?  I've been wrong for years.  I'm just confident that one day my stacking will appear to be a brilliant, forward thinking action.

Mike7.62
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Savings

It's a dilemma. I have about six months of cash on hand for everyday stuff, as getting anything out of a bank could be problematic should we awaken on a Sunday AM and find that TPTB have declared a bank holiday. The rest I place in one of two areas. One is physical PM's, and the other is a GoldMoney account. I figure that GM is about as safe an offshore vehicle as one can have, barring an actual safe deposit box in an overseas location. The PM's in hand could be problematic should a confiscation occur, but I count that as unlikely, given the number of PM holder's who also hold weapons. A door to door confiscation would be bloody, to say the least. If they do have a ban on ownership, I would expect a black market to arise rapidly, much as happened in both Weimar Germany and Argentina when their currencies died. Snitches would be the problem in that environment.

Whether or not the "deflationist" camp, or the "inflationist" camp, wins the argument about how the macro situation will turn out, I figure that PM's will be worth more in the future than they are now, whether that is defined in fiat or purchasing power, or both. My bottom line is this, do I trust the promises of politicians and the charity of bankers, or do I trust the constancy of metals and the historical record that they bring to the table IRT value? That's an easy answer, given world events past and present.

jackmeoff
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@pourty

HAHA, I am feeling you on this. My home is not underwater. I have been keeping more and more cash on hand instead of in a bank. I have food and water for 6-9 months. Enough guns and ammo to go to war. Own my cars out right. Almost done with the wife student loan but have about 45k in credit cards and a business loan for about 110k which can be paid off with some of my metals. Not worried about the CC or the loan as they are both business related and while the 45k sounds like alot we charge about 30k a month on them and pay either all or most off each month. Figured I would stack some before we take care of those as I can always pay them off if the economy recovers but who knows if I can pick up gold/silver.

Hang10-Hawaii
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Prep status

Just for perspective, I'll add my current situation to the mix.

I've got about 45 days worth of MRE's, jasmine rice, pop tarts, propane, canned veggies, beef jerky, etc. stored in the basement in Home Depot buckets, with mylar vac bags, oxygen packets and gamma lids.  I have two different water filtration  setups and a 100 gal water bag that fits in the bath tub.  Figure my family could cover about 30-45 days straight without a trip to the grocery store.

On the PM front, I also have about 10% of my assets in a GoldMoney account.  I also have about 10% in cash (Cayman dollars) in a Cayman Islands account that has a VISA card attached to it (can charge stuff against the account anywhere in the world - via the internet).  I have a physical stash separated into 3 separate storage locations in two different states.  The balance is in my 401K brokerage account and in gold/silver miners and quasi-physical (PHYS, PSLV, CEF) accounts.  Beyond that I have a stash of junk silver, small denomination gold (Mexican small peso's, British Sovereigns, etc.) coins and a wad of good ol US dollar cash money.

My view is that the most likely scenario is a long/slow decline of the US dollar where the middle class savers get wiped out, but there is a small chance of a major dislocation (black swan), in which case I figure 45 days of bug-in self sufficiency (with a couple of shotguns and revolvers) will be enough to hunker down while the dust settles.  Looking back at the LA earthquake, Japanese Tsunami, or Hurricane Katrina in New Orleans, I think that having the basics and defense for 45 days will be adequate.

Failing that, we have some rural property we could bug out to for a MUCH longer period.  I have the required gasoline in 5 gal containers, with Staybil to make it to our rural poperty.  Lots of great neighbors there who are all willing to barter and be neighborly.   Could hang out there for up to 6 months if needed.

Beyond the current level of prep, all I'm really in the market for is a good  vehicle. Looking for something pre-computer with a carb and points/distributor.  Probably a pre-`1985 landcruiser or something like that.

Beyond a vehicle with no computer, I'm in fair shape.

Would love any feedback you guys have.

Cheers,

pourty
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Wow, some of you guys are seriously prepared

Personally, we've only got about a month's worth of TEOTWAKI supplies (and that might be stretching it a bit), I try to build on it each trip to the store rather than go all in at once.  Of course, as a gun-nut, I've got enough guns & ammo to last until the second coming, but I don't really anticipate using them, I'm old and fat, if it comes to invastion, I'm going to be some young guy's target practice...

Thanks for all the sharing, it's good to hear other perspectives!

ragemachinest
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I have no idea how old most people are on this site but I want to think I'm pretty young at 27 (recently married). I like you, have some cash saved up for a rainy day or a rainy few months, but I'd prefer to have most of it in PMs.  Currently the only debt we have is a mortgage and that is all going just fine. I'm working on food and water storage for a year. I have a fair amount of guns and always buying more as people sell them cheap for some quick worthless cash. I have a growing stock of ammo (hopefully to get up to pourty's size of a stash for the second coming).

Basically I'm spreading my extra money around to first take care of possible necessities in case of an emergency. I spread a little here and a little there (food, supplies, guns, ammo, etc.) each month. I make sure my emergency cash supply is where I want it and the rest goes to stackin the PMs. While my stash may be small, it is growing pretty quickly. Fortunately I have had people like you and a site like this to help guide me in my preparations for the future.

Jappleseed911
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For some Santa guidance:

For some Santa guidance: Sinclair is 75% gold (assuming physical & miners), 20% swissie, and 5% canadian dollar. Not sure if his swissie or cando is actual fiat or some electronic/certificate equivalent.

I ordered some cando fiat from my bank awhile ago. $1k in small bills. I figure I can always get out of it if I need to. I count that as part of my fiat reserve fund.

pourty
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Now that's an idea I haven't

Now that's an idea I haven't really considered: keeping some foreign cash around.  My understanding, though, is that the foreign fiat's aren't all that much better than dollars?  I guess if the dollar dies and Canada is still up and running, Canadian currency might be a short-term stop-gap?  Seems like a way to hedge bets anyway.

I've got a 50-Shekel note from my trip to Israel several years ago... does that count?  Evidently it's worth about $12.50 right now...  I could buy a decent lunch with it! ;-)

Jappleseed911 wrote:

For some Santa guidance: Sinclair is 75% gold (assuming physical & miners), 20% swissie, and 5% canadian dollar. Not sure if his swissie or cando is actual fiat or some electronic/certificate equivalent.

I ordered some cando fiat from my bank awhile ago. $1k in small bills. I figure I can always get out of it if I need to. I count that as part of my fiat reserve fund.

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