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<p>[QUOTE="Slider, post: 1895164, member: 44205"]This strategy has it's own problems, as it violates one of the fundamental rules of finance - "yesterday's money is always worth more than tomorrow's money." A practical example is the growth in the stock market over the past several years. The share that you paid $50 for "yesterday" may cost you $70 to buy "today," and $100 to buy "tomorrow." Unless you're increasing the amount of dollars you're using to "pay yourself back" to account for inflation, you're intentionally diminishing your future purchasing power for the sake of an easy loan. Borrowing money from yourself in this fashion should always be an option of last resort.</p><p><br /></p><p>Taking money from an existing IRA, which is likely invested in mutual funds composed of a number of individual securities, and putting it into a bullion IRA also violates another basic rule of investment - diversification. Mutual funds, and index funds, attempt to reduce risk by spreading your money over multiple investments that are grouped together into a single holding.</p><p><br /></p><p>No matter how much confidence you have in PM, the act of moving money from a diversified investment into a single investment is accompanied by a dramatic increase in risk that you will carry for the duration of the investment. I'm not typically a fan of paper metal, but if you can't afford to buy metal with post-tax income, and you're convinced that you need to have skin in the PM game, the wise thing to do would be to buy paper.[/QUOTE]</p><p><br /></p>
[QUOTE="Slider, post: 1895164, member: 44205"]This strategy has it's own problems, as it violates one of the fundamental rules of finance - "yesterday's money is always worth more than tomorrow's money." A practical example is the growth in the stock market over the past several years. The share that you paid $50 for "yesterday" may cost you $70 to buy "today," and $100 to buy "tomorrow." Unless you're increasing the amount of dollars you're using to "pay yourself back" to account for inflation, you're intentionally diminishing your future purchasing power for the sake of an easy loan. Borrowing money from yourself in this fashion should always be an option of last resort. Taking money from an existing IRA, which is likely invested in mutual funds composed of a number of individual securities, and putting it into a bullion IRA also violates another basic rule of investment - diversification. Mutual funds, and index funds, attempt to reduce risk by spreading your money over multiple investments that are grouped together into a single holding. No matter how much confidence you have in PM, the act of moving money from a diversified investment into a single investment is accompanied by a dramatic increase in risk that you will carry for the duration of the investment. I'm not typically a fan of paper metal, but if you can't afford to buy metal with post-tax income, and you're convinced that you need to have skin in the PM game, the wise thing to do would be to buy paper.[/QUOTE]
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