patrick.net

Eman says

If you think we’ll have hyperinflation, you should convert your money to hard assets rather than cash. Lock in 30-year fixed mortgage and let inflation wipe it away.

Inflation will also erase your paycheck. See gas and food now, then compare them to gas and food in Venezuela. Hyperinflation does not happen in a silo, without impacting everything around us.

Everyone should always have some emergency funds in a place they can access at any moment, NEVER a bank. Whether that's Federal debt notes, silver coins, or ammo.

If you want gold, try some pawn shops. They have to pay the same exorbitant fee to convert it to cash, so they are usually willing to part with gold jewelry or the like for cost plus 50%. Given that their cost is like 25% of the real value, the price is pretty good for a buyer.

NuttBoxer says

Inflation will also erase your paycheck. See gas and food now, then compare them to gas and food in Venezuela. Hyperinflation does not happen in a silo, without impacting everything around us.

Sorry, I don’t get regular paychecks. I see inflation on food, gas and everything around me including Tesla car prices. However, they haven’t impacted me one bit. I see it as a tax on the poor and lower class.

For me, it’s business as usual. I still dine out 7 days a week and still go on my normal daily life within feeling it. I hope the poor and lower class are happy with who they voted for.

stfu says

Patrick says

You'll pay something like 4%

Patrick you'll have to give me the phone number of the guy that will sell me gold for 4% above spot.

The best I've ever found is 'bouillon vault' but you don't get to hold the physical - it's in a vault in Switzerland.

This guy will do it:

https://www.mishinternational.com/contact.html?source=patrick.net

NuttBoxer says

Everyone should always have some emergency funds in a place they can access at any moment, NEVER a bank. Whether that's Federal debt notes, silver coins, or ammo.

And Yams.

I have some of those, but I haven't figured out if the payments went up with inflation.

Actually, I can do this... OK, for the last month, I was paid at an 8% annual rate. Not bad, but not really keeping up with inflation, which is clearly over 10% now.

Patrick says

You could put a chunk of cash in gold coins in a safe deposit box. You'll pay something like 4% to in each direction from and to cash, and there's some nominal fee for the safe deposit box, but you can be sure the value won't plummet at least.

That's what some people thought in 1930. Then Roosevelt's revenue agents had to be there when you opened your box to make sure you didn't have any bullion. Banks and governments cannot be trusted. This has been proven true.

Put your bullion in a waterproof chest. Bury it. Make a map.

Shaman says

If you want gold, try some pawn shops. They have to pay the same exorbitant fee to convert it to cash, so they are usually willing to part with gold jewelry or the like for cost plus 50%. Given that their cost is like 25% of the real value, the price is pretty good for a buyer.

There is a pawn shop in Oakland where I buy gifts for my wife. They will sell me silver and gold jewelry for 10% above melt value.

FarmersWon says

Do they pay monthly? .. Also does their price change in market or always sell at face value?
... I mean Can I sell them when I want to and get my principal back?.. or price changes in market?

@FarmersWon Yes, it seems they pay monthly. It has a "current value" which I think never goes down. That is, you own the bond from the beginning, it is not traded, and accumulates interest. I bought TIPS (Treasury Inflation Protected Securities) at https://treasurydirect.gov/?source=patrick.net

The https://treasurydirect.gov/?source=patrick.net has an annoying login where you have to type the password on a virtual keyboard, but aside from that it's an OK website.

Onvacation says

Put your bullion in a waterproof chest. Bury it. Make a map.

Spoken like a true pirate!

Yes, safe deposit boxes do have the hazard of getting confiscated.

FarmersWon says

Warren buffet is typical rent seeking land lord.

Is that not the ultimate goal of investing? To be a rent receiving landlord?

If only we could have the rent seeking without the corruption of inside trading and government picking the winners. Buffet has deep ties to the deep state.

FarmersWon says

Yes buffet is insider as well as his business produces zero innovation.

Yes, like another famous Buffet quote - "I do not invest in tech because I do not understand it."

stfu says

Patrick says

You'll pay something like 4%

Patrick you'll have to give me the phone number of the guy that will sell me gold for 4% above spot.

The best I've ever found is 'bouillon vault' but you don't get to hold the physical - it's in a vault in Switzerland.

Unless I'm calculating it wrong, this seems like about 3% above ask price for 1 bar

https://www.jmbullion.com/1-kilogram-gold-bar/?source=patrick.net

One day I will hold one of those kilo bars of gold in my hands ... and cackle to myself.

cash is only good if you are about to use it on opportunity, or rainy day savings.

otherwise don’t sit on it. leverage is how you make money.

Hircus says

The best I've ever found is 'bouillon vault' but you don't get to hold the physical - it's in a vault in Switzerland.

Better not. The Khazarian Mafia will just send a hit man to kill you and any other claimants, like they did financing Hitler in WWII, and the 'Swiss Vault' will just keep the gold and resell it temporarily to somebody else.
"We have many satisfied customers. The dead seldom complain. WWIII coming up!"

Onvacation says

Is that not the ultimate goal of investing? To be a rent receiving landlord?

To get rent from merely owning land is non-productive.

But to get dividends and capital gains from owning part of a company seems justified by what the company produces.

Like, if you own a windmill, someone had to build it, and some of the income goes to maintaining it, and it produces something which the plain land cannot.

Eman says

Sorry, I don’t get regular paychecks. I see inflation on food, gas and everything around me including Tesla car prices. However, they haven’t impacted me one bit. I see it as a tax on the poor and lower class.

For me, it’s business as usual. I still dine out 7 days a week and still go on my normal daily life within feeling it. I hope the poor and lower class are happy with who they voted for.

So you don't use Federal Reserve notes at all, or have any other types of paper that you can only exchange for same notes?

Yes inflation hits hardest at the bottom, but if you think that's where it stays, you are in for a rude awakening. You see as each strata of income pushes people into the abyss of inflation, your strata moves closer. Eventually you'll fall in with the rest, and then you'll understand how cruel and ruthless your comment here sounds. Reminds me of the passage from Les Miserables where the french aristocrat tells the people to eat grass.

Patrick says

To get rent from merely owning land is non-productive.

I've been thinking about this statement. I'm not sure I see the picture cogently and correctly, but I feel like maybe the validity of the statement depends on the frame of reference, or frame of analysis.

The owner of the land likely purchased the land with capital (or, in any case, they surely could sell it in exchange for $). Capital is productive, generally speaking, because it could be spent on productive things.

1) The current owner would have paid less for the land if they knew they could not rent it. Conversely, the anticipation of renting meant the seller received more capital for selling him the land than they otherwise would have received. And capital is generally productive.

2) The person paying rent to the land owner also potentially receives a productivity boost via leverage. Instead of needing to outlay a large chunk of capital to purchase the land, they can instead rent it, allowing them to deploy their capital to productive endeavors, in exchange for a monthly fee. This arrangement is similar to a loan - in exchange for a monthly fee, you are given a chunk of capital for which you can deploy productively.

The reason I mentioned framing though, is because I'm not certain if I'm describing economics/productivity of "a single owner renting their land", or "a buyer, a seller, and a renter", or of "an economy that allows renting of land" etc... All three have different analysis boundaries, and I know from past experience, that you can sometimes lay your boundaries out in ways that lead to correct, but misleading/bunk results on account of the boundaries.

I'm also not sure of #1, as while the seller gained capital, the buyer lost it, although that happens in all transactions.

I guess my idea is half baked, but I decided the share it in hopes maybe someone else finds the perspective interesting, or sees things more clearly.

NuttBoxer says

Eventually you'll fall in with the rest, and then you'll understand how cruel and ruthless your comment here sounds.

It’s a long way to get to me. I’ll probably be dead before then. Again, I hope the poor and middle class are happy with their votes and got what they voted for…..or not.

Hircus says

The owner of the land likely purchased the land with capital (or, in any case, they surely could sell it in exchange for $). Capital is productive, generally speaking, because it could be spent on productive things.

I agree. Although capital can be invested in other assets, at the end of the day, capital is looking for yield, and real estate is one of the assets that produces yield.

The owner has to upkeep the building structures and provide regular repairs and maintenance. It’s nothing more than a glorified housing service provider. Thanks to inflation and leverage, that’s how the return is acceptable to the investors. Property tax is the tax on land. The structures get depreciated over 27.5 years.

Eman says

It’s a long way to get to me. I’ll probably be dead before then. Again, I hope the poor and middle class are happy with their votes and got what they voted for…..or not.

When you destroy a currency, the only ones who have enough are the ones destroying it. Either you will own nothing by 2030, or they will. But the middle ground you're wishing for flew out the window along with common sense the day the scamdemic started.

The only ones satisfied with election outcomes are the ones who don't vote. Because they're the only ones smart enough to realize life is what you make of it on your own, and those waiting for salvation by government will be waiting their whole lives.

Onvacation says

FarmersWon says

Warren buffet is typical rent seeking land lord.

Is that not the ultimate goal of investing? To be a rent receiving landlord?
If only we could have the rent seeking without the corruption of inside trading and government picking the winners. Buffet has deep ties to the deep state.

The definition of "rent seeking" is: "practice of manipulating public policy or economic conditions as a strategy for increasing profits."

So, by its very nature, that is corruption. I think that Buffet has been doing a lot of that sort of thing. Maybe not in the 1970s, but certainly in the last decade.

Hircus says

One day I will hold one of those kilo bars of gold in my hands ... and cackle to myself.

Go to the Gold and Silver shop that has such a thing and ask them if you can take a selfie with one.


Or you could buy one for under $65K.

Warn the shopkeeper that you're going to cackle. They are armed and dangerous.

Big bars of gold are incredibly dense. The Spanish treasure galleons went to the new world ballasted with cobble stones and returned with ballasts of gold.

So far we have gold, TIPS, stocks, or real estate.

I seriously am looking to move a large amount of cash into an investment (over 200k).

What would you guys go for?

Eman says

Property tax is the tax on land. The structures get depreciated over 27.5 years.

Property tax is levied on the "improvements" (structures) as well. In fact, most tax invoices will list the land and structure property tax as separate items. That 27.5 year depreciation applies to residential rental property, and deals with income tax as a method of lowering taxable profit, since expensing the whole house in the year it was bought is impractical. That depreciation is no more a "tax advantage" than any other business that can deduct expenses, such as a tradesman who can depreciate his vehicle or expense his tools.

Goran_K says

So far we have gold, TIPS, stocks, or real estate.

I seriously am looking to move a large amount of cash into an investment (over 200k).

What would you guys go for?

real estate is work, a lot of work from what ive seen. if you want it easy, buy stocks. buy index funds and youll get market returns.

Fortwaynemobile says

Goran_K says

So far we have gold, TIPS, stocks, or real estate.

I seriously am looking to move a large amount of cash into an investment (over 200k).

What would you guys go for?

real estate is work, a lot of work from what ive seen. if you want it easy, buy stocks. buy index funds and youll get market returns.

So what are you thinking, wait for a SPY dip, and just buy like 400 shares?

HeadSet says

That depreciation is no more a "tax advantage" than any other business that can deduct expenses, such as a tradesman who can depreciate his vehicle or expense his tools.

Bear in mind that you're talking to a guy with a Cybertruck on order (which happens to be over 6,000 lbs). eMan understand the game...

Goran_K says

So what are you thinking, wait for a SPY dip, and just buy like 400 shares?

Good to have you back Goran. Hopefully you're not having to deal with stinky co-workers these days. You got me wondering about this....

VFIAX vs. SPY: A Mutual Fund vs. ETF Case Study

Both VFIAX, a mutual fund, and SPY, an ETF, seek to track the S&P 500.
One of the primary differences between the two is that Vanguard's VFIAX has a lower expense ratio of 0.04% versus the SPY's 0.0945%.
The SPY ETF may have a slight tax advantage over the VFIAX mutual fund since it's not actively managed, meaning there's less buying and selling of trades.
VFIAX and SPY are generally considered strong investments, especially for passive investors.

HeadSet says

Property tax is levied on the "improvements" (structures) as well. In fact, most tax invoices will list the land and structure property tax as separate items. That 27.5 year depreciation applies to residential rental property, and deals with income tax as a method of lowering taxable profit, since expensing the whole house in the year it was bought is impractical. That depreciation is no more a "tax advantage" than any other business that can deduct expenses, such as a tradesman who can depreciate his vehicle or expense his tools.

My argument is that the land is not unproductive as claimed. The city puts an ordinance on what can be built there. Someone paid money for it. Someone is paying the property tax on it. It’s an investment for someone. The city can always use eminent domain to get the land and use it for “more productive” cause as they see fit.

With respect to depreciation and expenses, it’s so beneficial to run a business. A lot of normal daily expenses get deduct upfront. Business owners only have to pay taxes on what’s left. This is why some business owners drive fancy cars and wearing nice stuff because all these stuff get expensed. Either buy/rent nice things or pay more taxes? Such an easy decision.

@EBguy, in addition to the Cybertruck, did you know the Model X also qualified for business expense? 😘

EBGuy says

Goran_K says

So what are you thinking, wait for a SPY dip, and just buy like 400 shares?

Good to have you back Goran. Hopefully you're not having to deal with stinky co-workers these days. You got me wondering about this....

VFIAX vs. SPY: A Mutual Fund vs. ETF Case Study

Both VFIAX, a mutual fund, and SPY, an ETF, seek to track the S&P 500.
One of the primary differences between the two is that Vanguard's VFIAX has a lower expense ratio of 0.04% versus the SPY's 0.0945%.
The SPY ETF may have a slight tax advantage over the VFIAX mutual fund since it's not actively managed, meaning there's less buying and selling of trades.
VFIAX and SPY are generally considered strong inv...

Nice to see you my man.

I actually do like Vanguard products and have an account with them. I might lean that way.

Eman says

@EBguy, in addition to the Cybertruck, did you know the Model X also qualified for business expense?

Yeah, when I was checking it out a couple of days ago I noted the GVWR just tipped the scales...