Do I need more gold?

Discussion in 'Bullion Investing' started by stevereecy, Aug 29, 2020.

  1. stevereecy

    stevereecy Collects Everything

    This is going to be a convoluted question and it deals with my own personal situation but I’m thinking about things differently these days and I would value some input.

    I’m about 10 years from retirement and 15 to 20 years ago I bought several town houses to use as a rental property. Well retirement will begin when they are paid off.

    The key point about my rental property portfolio is this. If we were to see heavy inflation or hyper inflation, my rents would go up but my payments are locked in. So owning gold isn’t necessary as a hedge against inflation for me. Lest anyone think I’m bragging, trust me that it has crippled my cash flow for years and repairs are constant. I’m only now seeing some benefits to cash flow.

    Secondly the real estate has gotten to the point where it dwarfs my stock portfolio. I’m trying to play catch-up on that and
     
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  3. physics-fan3.14

    physics-fan3.14 You got any more of them.... prooflikes? Supporter

    If you're asking for retirement/investing advice from a bunch of strangers on the internet... you're doing it wrong.
     
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  4. -jeffB

    -jeffB Greshams LEO Supporter

    ...you never know, you could keel over dead in the middle of typing a post. :eek: :dead:
     
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  5. Randy Abercrombie

    Randy Abercrombie Supporter! Supporter

    I don’t think holding gold is ever a bad option when you can afford it. However, right now is probably not the best time to be buying. I fear a correction is forthcoming. Gold is sure high right now.
     
  6. ldhair

    ldhair Clean Supporter

    The first thing to do is to fix the cash flow problem. That's not a healthy way to go about investing in rental properties.
     
  7. stevereecy

    stevereecy Collects Everything

    Oh my God guys! I thought I deleted that post after a change of heart. My phone went into some crazy mode where it wanted me to login even though it let me type the message and hilarity ensued. Sorry about that.

    Let’s see. To finish my train of thought, briefly I feel like I’m hedged against inflation fairly well with the real estate. And with respect to having portable wealth, I collect a lot of small things like coins that I could fill a bag with and run away with if I needed to in an emergency.

    All that being said, I was watching a guy on YouTube who made a compelling point about putting 5% of your net worth into gold and constantly re-balancing that. As gold goes up you sell some. As gold goes down you buy more to maintain 5% of your net worth in gold. Despite the fact that we have a lot of jewelry laying around (I used to buy junk gold jewelry at coin stores for my wife when it was $400/oz.) I think I’d have to buy quite a bit more gold to hit 5%. But does buying more make sense when I’m hedged against inflation and have portable wealth in the form of collectibles?

    BTW: the comment about having no cash flow is on point. It did suck, but I figure it’s kind of like the sacrifices FIRE investors make in their younger years and I’m happy to say that issue was resolved. Rents are up.

    Anyway maybe this thread should be when do you not need gold? Or when do you have too much?
     
    Last edited: Aug 29, 2020
  8. Collecting Nut

    Collecting Nut Borderline Hoarder

    You should really seek advice or input for your situation from an investment manager. We're just a bunch of guys and gals who have opinions.
     
    Randy Abercrombie likes this.
  9. stevereecy

    stevereecy Collects Everything

    I understand that. I’m really just looking for opinions and input. I actually have a fair amount of business education and most investment advisors don’t really understand real estate investing or it’s virtues. I’m not saying I can’t be taught, but I’m kind of locked into a path that will already take me farther than I ever thought I’d attain in life so I’m really asking questions about the frosting on the cake.
     
    Last edited: Aug 29, 2020
  10. physics-fan3.14

    physics-fan3.14 You got any more of them.... prooflikes? Supporter

    In that case, I'd recommend cream cheese frosting. A little more savory, not as overpoweringly sweet as many frostings.
     
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  11. ldhair

    ldhair Clean Supporter

    I like the 5% in gold idea, up to a point. I would want to have a rather large cash reserve first.
     
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  12. FryDaddyJr

    FryDaddyJr Junior Member

    Sure, but buying right now would be foolish. that's OK, a lot of PM folks are foolish and that's how other folks make money
     
  13. stevereecy

    stevereecy Collects Everything

    How do you know? Can you imagine if somebody said that Microsoft was too high in the 1990s?
     
  14. FryDaddyJr

    FryDaddyJr Junior Member

  15. imrich

    imrich Supporter! Supporter

    He should have spoken for himself, as in the majority, most investment managers are just guys with opinions, but several on here have been very successful in retiring, and help other focused individuals achieve the same, without taking from our clients/partners.

    Individual retirement goals need to be based on life styles and disciplines of each individual. I've found the majority will never be prepared, as their goals exceed capabilities.

    It appears that you have established a solid path for yourself, continue along as possible, but be prepared for adversity that normally accompanies age advancement.

    I read here about someone wanting corrective surgery and being denied, which I've experienced on 4 occasions, but having 2 being reversed with life-style changes. Change may be inevitable! Be prepared! I no longer plan to run a marathon, but plan to get out of bed slowly tomorrow morning.

    Along with diminishing health comes wealth reduction. Be Prepared! Enjoy the health/wealth afforded today!

    JMHO
     
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  16. medoraman

    medoraman Supporter! Supporter

    To the OP, rules of thumb are simply a way of thinking of things. My view of your portfolio is that having a large exposure in RE is substituting for any need for PM, But....

    The but is that you are tied to the US economy this way. If the USD tanks, pm would protect the portfolio while your US RE would not. That is the main risk I see sir, is deterioration of US based assets, which PM is not.

    Would I say you need more pm? Not me to say. If you are comfortable with the relative strength of the US versus the world, I would say don't change anything.
     
  17. stevereecy

    stevereecy Collects Everything

    Thanks for that advice. I Guess it’s not fair to ask a question based on my background without giving my entire background. Bear in mind I did try to delete this thread. :) So I’ll tell you that my wife has a job with the state and when she retires she will get a pension that is transferable to me if she dies and includes cheap comprehensive health insurance. “Cheap” is relative, but it puts a cap on worst case medical costs. My own mother has the same thing and has had so many operations and illnesses but she just keeps going and going like the energizer bunny.

    In my humble opinion, my only real reason to consider gold is in case of a complete collapse of everything to where nobody wants to buy my comic books or art or anything else. At that point I would think wealth would need to be extremely portable and therefore though I love silver bars, they won’t work for my goals or my aging back. I’m just trying to wrap my brain around how much gold to buy and whether to balance it.
     
  18. stevereecy

    stevereecy Collects Everything

    I think you’re right on target here. Further I could see a day where my children might not be allowed to buy any gold. Also I could see a day where only numismatic gold meeting certain criteria would be allowed...potentially only gold that is handed down from generation to generation like they tried to do with unpermitted guns. Please understand that I’m not paranoid, but I like to cover my bases.
     
  19. fretboard

    fretboard Defender of Old Coinage!

    There are many gold bulls and others who straight out tell people to have at least 10% of their income in gold at all times! Whether it's 5% or 10% you choose, many people say gold is too high to buy right now. Not me, either you buy a little high right now or you wait a year and you pay higher, your choice! :D
     
  20. Good Cents

    Good Cents Active Member

    Forgive my ignorance, but, why would Real Estate not protect his portfolio if the USD tanks? People still need a place to live. Why wouldn't the Real Estate continue to maintain its value?
     
  21. imrich

    imrich Supporter! Supporter

    I could write a thesis on the disadvantages of having property other than your homestead. Suffice to say it's an easy target for a myriad of entities looking to expand their resources for physical/finansial attack, legislate control of, dictate value of, etc..

    You can't move real estate, and it's greatly "targeted" by government, renters, gangs, agencies (e.g. insurance, repair, inspect, etc.) as a source for power/funds.

    Can you possibly imagine the costs to the owners of the structures destroyed by the societal parasites looting, burning, occupying. Try getting insurance on a property that has had natural or intentional damage (lightning/fire, vandalism/destruction, etc.) LOL, based on numerous practical experiences. I personally can't afford insurance, but I'm required to have liability. Try negotiating "real value" of property with a government assessor before/after destruction. LOL, you'll learn about the labyrinthian process for abatement and subjective value establishment.

    Just a brief overview of restrictive reasons for considering the disadvantages of physical (real estate) property, and we haven't started on who might get the "Gold Mine" or shaft in dissolution process. LOL

    JMHO
     
    Last edited: Aug 30, 2020
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