Do I need more gold?

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

  1. Good Cents

    Good Cents Active Member

    Thank you for your reply. I understand.

    But if owning property is that risky, then why doesn't it extend to owning your own home? On one hand, owning one's own home is encouraged, and yet owning investment property is not. Why is it that owning one's own home is a good thing if property ownership is such a risky investment?
    Mr. Flute likes this.
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  3. imrich

    imrich Supporter! Supporter

    Theoretically, simply stated, there are greater legal protections for someone who has invested in a personal dwelling.

    This a very complicated subject, where the degree of protection, and to whom applied will not be answered with simple statements.

    The subject would probably be better addressed in a different venue, dealing with investments, with a major emphasis on ones own personal real estate.

    I've more than a half-century explaining to individuals how they could lose their investment when not understanding the complexities of real estate law. Although the tenets may be similar through-out the world, details can vary considerably in a very small region/community/complex. It seems that the majority of individuals advance/progress eventually to the practical application of losing their investment, which is controlled primarily by others. Our "Donald" could probably better explain.

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  4. ldhair

    ldhair Clean Supporter

    True. Too many think they can just buy a property, rent it and watch the money flow in. Everything about investing in rental property is complex. Many folks fail after only one or two properties because they didn't understand the game before they started playing.
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  5. medoraman

    medoraman Supporter! Supporter

    I agree with the answer of @imrich . It basically boils down to situations like Zimbabwe or Venezuela in worst case. If the local currency deteriorates badly, how will the renter afford ever higher rents? If you do not increase rents as fast as inflation, you start losing real returns. PM, OTOH, would still be attractive to people where the economy is still good, maintaining real value. Real Estate is inexorably tied to the local economy. Don't believe me? Want to invest in apartment buildings in Caracas? I don't think they have paid rent in years now, and the government forbids evictions to support them politically.

    Heck, look at San Francisco. Whining about not enough rental units, yet 7 years ago they passed a law forbidding rent increases above a certain level, currently about 1%, yet property taxes keep going up 10% a year. Then the politicians hold press conferences stating its developer greed why they are not building more apartments in the city .......
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  6. stevereecy

    stevereecy Collects Everything

    I agreed with your second point but in your first point if prices went like they did in Venezuela I would just raise my rent as much as I could get. I don’t need to raise my rent at all to continue to pay the units off. But if any inflation kicks up I can collect more potentially. If it gets ridiculous I’ll chase the banker down the street to put money in his pocket to pay them off and own free and clear.
  7. fretboard

    fretboard Defender of Old Coinage!

    Real Estate is good to own and if you own gold on top of it you're better off as it's silly to save money in the bank to me. Per Ray Dalio, cash is trash! Better to own gold than to keep a savings account, jmho! :D

  8. -jeffB

    -jeffB Greshams LEO Supporter

    If I hadn't been lucky enough to keep my job back in March and April, I would've been much happier drawing down that trashy cash bank balance than trying to sell my gold at the lowest price of the year, or silver at a 10-year low.
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  9. imrich

    imrich Supporter! Supporter

    I'm sorry, but I believe you are a prime candidate for a crash course in real estate law.

    I have returned appreciable amounts of land/structures with a quit claim to municipalities. No funds exchanged, just for "valuable consideration". This action, after they increased taxes up to 4 fold in a year, not allowing private sale by "code change".

    I've had real property confiscated at a municipal and state level. I see no reason why a property/venture value couldn't be reduced/taken by Federal action, upon certain efforts (e.g. tiktok, huawei, ?).

    When your property is in an area which may be "redeveloped", government has control! The courts can/are favorable to municipal action (e.g. eminent domain) for a myriad list of actions, without relative recompense.

    As a pragmatist: that realist is (philosophy,who values practicality or pragmatism. that realist is (philosophy,who values practicality or pragmatism.
    I realize that we've entered and leave this world similarly in a state without control, and I've acted relatively successfully throughout my time of limited control, having net positive results.

    Please consider the above, and realize that while here you MAY never own property "FREE and CLEAR". Enjoy your "retirement"!

    Last edited: Aug 30, 2020
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  10. CoinCorgi

    CoinCorgi Derp, derp, derp!

  11. Rono

    Rono Senior Member

    Howdy folks,

    Years ago I read a quote by the elder Baron Rothschild saying that to protect your wealth from economic calamity, you should have 1/3 in securities, 1/3 in real estate and 1/3 in rare art. Note that I consider rare coins and bullion to qualify for the rare art category amongst other assets, but it ain't Beanie Babies.

    The first time I ran my numbers, I almost blew chunks being so heavy in securities. Since then I've strived to move in this general direction and made good progress. Note that this is wealth, not portfolio allocation.

    As for gold and silver, I have always suggested that folks should have somewhere between 3-10% depending upon their tastes in PHYSICAL bullion. This I consider a core investment. More than this is fine, but it's more in the realm of speculation. That's fine but speculation and investment are different animals.

    The bottom line as with any sort of investment, is position yourself where you can sleep at night.

    good luck,

    and so it goes,

    peace and wear the damn mask,

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  12. losthomer

    losthomer Active Member

    Does Ray happily sell you gold in exchange for trash?
    Last edited: Aug 30, 2020
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  13. imrich

    imrich Supporter! Supporter

  14. johnmilton

    johnmilton Well-Known Member

    Real estate can make a lot of money for you. I know because I have made a a lot of money from it. I'm not so sure about about owning rental properties when you are a retiree, however. The need to maintain the property is a constant cash drain; if you are the main handy man, that can get tough as you age; and some tennets can be a total pain in the butt.

    These are hard times for holding on to your nest egg. The government "Modern Monetary Policy" which consists of paying for government spending via sales of the bonds to the Federal Reserve System has resulted in a massive increase in the money supply. I'm told that I am old fashioned, but when I took economics and history in school, theory and past results tell me that hyper inflation is in the offing.

    An unstable monetary system puts everything at risk. It all depends upon which industries can cope with it the best. Stocks can be good, but which ones? Fixed income vehicles are dangerous. Inflation will eat them up. Gold is supposed to be a hedge against a failing monetary system, but is it a safe buy at over $1,900 and ounce?

    As you can see, I have as many questions as you have. I’m sticking with the stock market at the moment with some “holding pattern money” in CDs, gold and my coin collection. Will it work? I wish I had the answers.
    Last edited: Aug 30, 2020
  15. stevereecy

    stevereecy Collects Everything

    I originally got into real estate to make money and get out. But the 2008 crash changed that. After fighting through that period of time I became more efficient. When I began to realize that if I sold my equity I can’t really identify a place to put the funds that would give me as much return. They yield about 8% after taxes and rents keep rising. If I gave 10% to a Management company I’d lose another percent off that return. So I would yield about 7%. Then I would only need to make the big decisions. That being said, If I have a good maintenance guy it really wouldn’t bother me to run them myself. I have considered banking some of the money to make down payment on additional properties as long as they were large down payments so that the cash flow it would be obviously a safe investment. Understand that I do not advocate that Anyone become a landlord anymore than someone should become a banana farmer. There are a lot of risks in the learning curve. That being said there are people who banana farm every day and are good at it. And I understand the ins and outs of running rentals.

    For what it’s worth the concept that cash on hand is just as important as gold makes sense. I wonder if it would make sense to keep the same amount of gold on hand as cash. You could run a balanced fund. As gold went down you would buy more to make them equal. As gold went up you would sell some off to add to your cash position.

  16. losthomer

    losthomer Active Member

    I've been thinking investment property with my 401k instead of purchasing an annuity. The money is gone for sure upon your death with an annuity. At least real estate is still probably an asset.
  17. ldhair

    ldhair Clean Supporter

    You know full well that the chances of having your property taken away in very slim. Yes it can happen but most get paid something for the property. Your post are way overboard in trying to scare people. Millions of folks have done well investing in property. If done properly the wealth will pass to family with no taxes to be paid.
  18. fretboard

    fretboard Defender of Old Coinage!

    No, I don't know or buy from him directly but I hope your little joke helped you to get rid of some gas! :D
  19. ldhair

    ldhair Clean Supporter

    You need to double check that. There are many types of annuities.
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  20. imrich

    imrich Supporter! Supporter

    I'm very happy for you, and anyone who has had long term success with property acquisition/management.

    My job in life is problem solving and asset development/protection. I've done that well, for which many have successfully retired with minimal fear of equity loss.

    I guarantee success, and challenge asset managers for investment period dependent money payment amounts, to beat my record, from a future date forward, a stated reasonable period with a new venture.

    My explanations are succinct, generally complete to facilitate contract.

    However, I can recognize skill levels by verbal statements, and defer to your complete stated knowledge.

    Thanks for your enlightenment of the facts!

  21. ldhair

    ldhair Clean Supporter

    The tax codes for rental income are really kind. You can depreciate the property over the years and that comes off of the rental income and you don't pay taxes on that income. The tax codes let you do that for a max of 27.5 years.

    After that you loose that deduction and your cost basis on the property is only the land value. If you sell it at that point, you pay taxes on anything you receive above the land value you used to set the property up on depreciation.

    If you keep the property you have to pay taxes on all income, like most any other type of investment. It's a really cool deal as long as you understand how the laws work.

    When you pass and the property goes to family, they get a stepped up cost bases to market value and can start the depreciation process all over again. It's all about planing and legally using the laws.
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