How much physical should one own?

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Wed, Jun 15, 2011 - 1:51pm
silversalmon
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3000 ounces of Gold

Interesting snippet below from Miles Franklin aka Schectman:

Recently, Richard Russell defined what “real wealth” is. According to Russell, real wealth is 3000 ounces of gold. Note, he did not put a dollar figure on this. Just ounces. If the price of gold hits $10,000 or if it plunges to $800 it matters not. It gold falls, everything else will fall even faster. It will retain buying power. If the price rises it will also retain buying power. He is pointing out that one will always be able to get by at a very high level with 3000 ounces of gold, regardless of the current price.

If I am correct, and gold tops $2,000 next year, then 3000 ounces will be worth $6,000,000. If gold hits $5,000 than 3000 ounces will be worth $15,000,000. If gold drops to $800, 3000 ounces will still be worth $2,400,000, and that will be in a deflationary-great depression and its buying power will be spectacular. Think in terms of ounces, not in terms of dollars.


I've been trying to get at this answer for a long time, but was asking the wrong question. Light bulb moment for me. Do you agree? What's your PM goal? Even if you can't reach it, and the bar is high, I think shooting for the moon, but hitting the stars is admirable. Jesus, what's the equivalent in SILVER. I'm inspired. if 3000 ounces is your core, what is your stash to play with lol?

Let's Discuss Ladies and Gents!

Wed, Jun 15, 2011 - 1:53pm
Newby
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Buy The Dips

I suppose I hold a 15-20% of Net worth. All physical Silver. I have been buying the dips whenever I can. My wife rolls her eyes and tries to discuss diversification. I have to hide it from her. The problem is trying to hide green monster boxes is not that easy.

Wed, Jun 15, 2011 - 1:54pm (Reply to #12)
Tom L
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I cashed out my Fla. State

I cashed out my Fla. State Retirement accts. for both me and my wife back in 2007-08. We had the private acct. option so think of them just like a 401k. I called them, told them my intentions and they sent me forms which I filled out. It wasn't difficult and I wasn't hassled by anyone.

They, of course, informed me of the penalties, yadda yadda. I told them I understood and that was that. The forms were nothing complicated. How much? When? To which bank? Sign here. They will likely hold back a percentage to cover taxes and penalties. Everyone's different. I had mine moved from FRS to an IRA held with Everbank, which I then subsequently liquidated, since I no longer worked for the State of Florida (Nor did my wife) that option became available.

You'll get 1099-INT's for your accts. the following January and you file your income/tax return accordingly. I think Everbank held back 20% flat.

My 403B (a 401k for State Employees) through TIAA-CREF worked similarly. Unfortunately, that was in a traditional annuity and gets doled out over the next 9 years.

Hope this helps. None of my money is in the traditional banking system except that which is needed to write checks and a small brokerage acct. which I trade from. The rest is phys. gold and silver.

Ta,

-- Support bacteria, it's the only culture some people have. Need Goats or Chickens? Say hello at: www.facebook.com/PirateDogAcres
Wed, Jun 15, 2011 - 2:18pm
Eric Original
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3000 ounces???              

3000 ounces???

Looks like I got a ways to go.....

This isn't a metals blog anymore. It's a right wing circle jerk, masquerading as a metals blog.
Wed, Jun 15, 2011 - 2:28pm
Bill Brasky
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200 oz min

If your stocking silver just for the "total" destruction of the dollar then you might not need as much as you think. Assuming you have prepared to self sustain in other ways then about 200 oz of silver would last a long time if your just trying to keep your head above water. An alternate medium of exchange becomes overvalued when the primary medium of exchange is destroyed.

If you would like to be "wealthy" and "prosperous" you would need significantly more.

my 2 cents

Wed, Jun 15, 2011 - 2:44pm
silverbleve
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physical silver has taken the place of my savings account

I have a general dislike of banks. I don't feel right baout putting money in there any more than i have to to pay my monthly expenses. If i for some reason need to pull out some cash, I take some rounds down to the local coin shop.

The increase in value far exceeds the interest on any savings account %3?! come on really? With current inflation rates at least that high, i think its a safe bet to say you will lose money just having those FRN's in a regular account.

Wed, Jun 15, 2011 - 5:01pm (Reply to #26)
Tom L
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I can see that, depending on

@#26: "If your stocking silver just for the "total" destruction of the dollar then you might not need as much as you think. Assuming you have prepared to self sustain in other ways then about 200 oz of silver would last a long time if your just trying to keep your head above water."

I can see that, depending on your lifestyle. We accumulated a bit more than that in silver and a small pile of gold. I started in 2001. We also put a bunch of money into building a home and land, have a small farm with goats (meat and dairy) and chickens and a rather large garden. Not self-sufficient by any means, but my reserves are larger than my current debt load and the farm provides food for us and enough income to cover the costs of the animals, so we basically eat for nearly free with a small profit on the side.

Other good investments are a food dehydrator and a meat grinder. Ours have paid for themselves many times over, are fully depreciated and are now just money savers. Also, if you're in the meat processing business, canning is a good skill to have as well. If you find meat on sale, or have extra, can it and store it for the future. It doesn't cost you electricity to store mason jars. I've told my wife to stop canning vegetables for the most part, we have a decent store of those, but also, we can grow food year round here in Florida, so it's not an imperative. Green beans in the summer and broccoli in the winter. Tomatoes, though, they dehydrate well, as do fruits.

Ta,

-- Support bacteria, it's the only culture some people have. Need Goats or Chickens? Say hello at: www.facebook.com/PirateDogAcres
Wed, Jun 15, 2011 - 8:31pm (Reply to #22)
Don Plata
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silversalmon's picture Johnny Newcome Offline Joined: 06/15/2011

silversalmon wrote:

Interesting snippet below from Miles Franklin aka Schectman:

Recently, Richard Russell defined what “real wealth” is. According to Russell, real wealth is 3000 ounces of gold.

Your weight in gold! Excellent.

https://en.wikipedia.org/wiki/Body_weight

Fri, Jun 17, 2011 - 7:05am (Reply to #12)
MonkeySmoke
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loans, loans and more loans

The 401k I referred to is from a previous employer. I do not have enough time with my current employer to get into another. I probably will not participate in another 401k, unless there are some serious changes to the current market. My account was managed through Fidelity. The rules of your account should allow you to make loans against your 401k. Before leaving my last employer, I took as many "general" loans for the full amount possible. I then set up a reasonable pay plan that did not amount to any more than I was currently deducting for my 401k. That way I did not notice, against my take home pay, the loans. Someone below stated you can claim hardship and get more, or possibly all, of your 401k. Talk to your administrator regarding this situation, and if you can get it all out, it would be something to seriously consider, IMO. Obviously, I have made my decision, however, this is what I BELIEVE and it IS NOT FINANCIAL ADVICE, merely giving you another view of what my work for your situation. I hope this helps.

Fri, Jun 17, 2011 - 9:17am (Reply to #11)
dckfr
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Convert to Self Directed IRA

One should look into a self directed IRA. I rolled over my 401K and my IRAs into a self directed IRA. Formed an LLC used one of the many companies out there to do this (mine is IRA Services). Now I hold 40% AU and 60% AG in safe deposit boxes under the LLC. No prepayment penalties and no taxes.

I fill out my annual IRS form and file the holdings. (my accounting....)

Good luck - hope this helps!

Fri, Jun 17, 2011 - 9:17am (Reply to #11)
dckfr
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Convert to Self Directed IRA

One should look into a self directed IRA. I rolled over my 401K and my IRAs into a self directed IRA. Formed an LLC used one of the many companies out there to do this (mine is IRA Services). Now I hold 40% AU and 60% AG in safe deposit boxes under the LLC. No prepayment penalties and no taxes.

I fill out my annual IRS form and file the holdings. (my accounting....)

Good luck - hope this helps!

Fri, Jun 17, 2011 - 9:30am (Reply to #32)
ouchtouch
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If you are saying that you

If you are saying that you are the owner of the custodian of your IRA metal then you are in for a nasty surprise when the IRS finds out. The day someone does such a prohibited transaction is considered to be the day that they terminated their IRA. Taxes, penalties and interest are accruing.

I am all in favor of legitimate self-directed IRA's but the administrator and custodian cannot be owned by the IRA owner or it is all void.

Not hating on you, just hope nobody else here thinks that this is a good idea. Scammers will take your money to set up such a scheme but it is very dangerous.

Fri, Jun 17, 2011 - 9:52am (Reply to #33)
dckfr
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I am the manager of the IRA.

I am the manager of the IRA. IRA Services is the custodian. I am the owner/manager of the LLC. Also the IRS states clearly what metals are okay such as American Eagles, Maples etc... Kruegerandss are not.

Check out IRA Services. Not selling them, but the info is very straight forward.

It also can be used to buy property and other investments. Just another tool to diversify.

Fri, Jun 17, 2011 - 10:31am
MrSteed
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I've heard that the "rule of

I've heard that the "rule of thumb" is 1 ounce of gold will yield you 1 month of living expenses (family of 4). I don't know how that's calculated, but I've seen it at least a couple of times ...

I think, for right now, whoever said earlier that put assets: 1/3 in PMs, 1/3 stocks/bonds and 1/3 cash is good advice. For now. That will hedge you pretty well for a number of scenarios. Naturally, the situation can change and you should adjust based on that. 1/3- 1/3 -1/3 is how I've currently got my assets allocated roughly. I'm mostly just stacking cash right now.

Fri, Jun 17, 2011 - 2:20pm (Reply to #34)
ouchtouch
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I guess I am not understanding you

If you are using a separate entity that you do not own/control as custodian, what is your LLC for? If it is the administrator you are still engaged in a prohibited transaction that voids your IRA. Where are the metals physically located? By way of example, I use an Entrust office as administrator of my self-directed IRA, and First State Depository as the custodian.

I wish there were some way to do it differently, but I researched the law and there just isn't.

Fri, Jun 17, 2011 - 3:11pm (Reply to #36)
ouchtouch
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I went back and looked at the

I went back and looked at the law and realized that my post above uses the term administrator incorrectly -- I was thinking of 401k plans. Technically what an IRA has to have is a trustee, and a trustee has to meet certain legal requirements, i.e. be a bank, insurance company, or on the IRS's approved list of non-bank trustees.

Fri, Jun 17, 2011 - 3:15pm
zilverreiger
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.3 GLD  .3 SLV  .3 CASH/PAPER

.3 GLD .3 SLV .3 CASH/PAPER

Fri, Jun 17, 2011 - 3:34pm
No1Hunter
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Withdrawl from 401k

Though many active 401k's will not let you close it out and take the funds because you are still employed, a lot of them will let you borrow against it and the interest you pay goes right back into your 401k. Basically, you are borrowing from yourself. That is how my wife's worked anyway.

Fri, Jun 17, 2011 - 6:44pm
ouchtouch
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I think the confusion here is

I think the confusion here is that you said that you are the owner of the LLC. I did some research and it seems that this strategy may work if the IRA, not YOU, owns the LLC. As long as the LLC is actually owned by the IRA, and the LLC is paying someone else to store the metal, e.g. your bank, this should be OK.

Fri, Jun 17, 2011 - 6:45pm (Reply to #4)
TheGoodDoctor
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@Zwipped Nice post. I sure

@Zwipped

Nice post. I sure wish I understood options better. I get the gist, just don't have the balls. LOL.

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.” Norm Franz
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