Purchasing Power of the Dollar

I am a visual person...This pretty much sums up a lot

How does gold "get away" with paying no interest?

Question -- How does gold "get away" with paying no interest?


Answer -- Gold pays no interest because it is ultimately safe. Gold is the only currency that has lasted through the centuries, going back 6,000 years. Currencies have to pay interest so that they will be attractive enough for people to hold them. As a rule, the poorer and riskier the nation, the more its currency must pay in interest in order to attract investors. Normally, the dollar would be paying an attractive rate of interest, except for the manipulations of the Fed. Thus short rates in the US are around zero, courtesy of the Fed.

-Richard Russell

Source: King World News

MUST WATCH - The American Dream (Animated)

Year End Update: Net Worth and More

What a year...

End of last year our total net worth was 43k, this year we have more than double it. Partially because my wife and I combined finances. Another reason is that the stock market has had an incredible run(I believe I read somewhere the Dow was up 10%). Our investments have worked out really well across the board and are keeping on budget and saving money.

If 2011 is anything like 2010, we will be well on our way. That being said, I am still overall bearish and looking for another major crisis between now and 2015. Whether it be a debt crisis, dollar collapse or peak cheap oil, I will try and put ourselves in a position to hopefully not only survive the crisis but hopefully prosper. We remain blessed but our attitude remains to still prepare for the worst and prey for the best.

Lets break it down:

Cash & Savings: This grew this month based off a year end bonus along with saving. Which is really nice considering that December is money pit usually with Christmas and such. Our first goal remains to get about 50K in the bank(cash) for saving before we really start putting our money to work. This bracket holds the funds for insurance, auto maintenance, Roth IRA, and vacation. It also holds our monthly budget in it which is used on a daily bases for covering expenses, mortgage, food, auto, etc...

Stocks/Brokerage: Wow, what can I say...This is the first year I have been managing a stock portfolio outside my 401k. I have been studying and listening to financial sense (www.financialsense.com), I have been listening to analysts who are interviewed and when they throw out a stock I research a little and see if it is worth a purchase. I am absolutely floored how well I have done with these stocks. Maybe its beginners luck, maybe it real that I believe in these stocks that I purchase and I hope 2011 will be as good as 2010. My plan is to keep purchasing Mining and Energy companies, as I still believe that Gold, Silver, Rare Earths are in a bull market and I will ride the trend until I feel it is not undervalued.

Here are the gains/losses based of percentages this year. I am currently up 22%, I try and keep a level head and not get to excited. I keep reminding myself that I need to be nimble and be ready to sell if the trend changes. The latest stock we purchased was Lynas Corp and am thinking of selling off some of my Avalon Rare Metals based off the run up lately:

The list of stocks I currently own: (SLW)(FRG)(SVM)(EXC)(PWE)(PHYS)(EGO)(AUY)(AVARF)(RGLD)(ZQK)(XOM)(CVX).

*As you can see I am heavy in commodities in my brokerage account. This is all based on my thought that over the next decade the best investments are going to actually be in hard assets. My Roth/IRA/401k are in pretty common index funds and mutual funds so I figure I can go more risky with brokerage. I believe these will out perform equities in the next decade and if nothing else I feel more comfortable with my portfolio being diverse. I am bearish on the US Dollar and US Economy, I believe that trillion dollar deficits are not going bode well for the USA.

Retirement 401k: This bracket is just both my wife and my retirement, adding money to our retirement funds every month.

Retirement IRA's: (Same as last month) Still having some cash on the sideline and will figure out what this market wants to do and see if I can put it to work. In this bracket I have all Vanguard Funds (VTSMX, VGSTX, VEIEX, VGPMX)

Real Estate: So this is a new category, based off getting 100% financing, right now its not even an asset based of not having any equity in our home. The plan here is to keep our money that we were going to put down as a down payment in the bank or investments. We will try and hedge our payments with trying to pay off the home in 10-15 yrs depending on what comes our way. This might change along the way depending on kids, economy, jobs and so forth.

Debts and Liabilities -

Credit Cards: Debt from Christmas, will be paid off without any interest.

Car Loan: I am paying 4% APR on it so I am paying a little, but not a ton. Still looking to pay it off early-will probably be a goal this or next year. I was blessed enough to receive a pay raise and with this I will add to my monthly payment to my vehicle and see if I can get this paid off earlier than the end date.

Home Mortgage: Mostly paying interest on our home at the moment, so not much of a dent here.

Not only did we surpass 100k, we went beyond it by 6k. I just feel so blessed and we are thankful everyday to have a good jobs in this economy. It is nice to have the success that we have with our personal finances at the moment. I am not taking anything for granted and definitely not trying to get big headed, but I am certainly proud of us in 2010. We had a wedding, attended a few out of town weddings, traveled, honeymoon, and purchased a home all along while saving somewhere between 25-30% of our income. I cannot imagine, even though it is a goal, that we will be able to do this (kids and etc...) down the road, so we will try and remain saving and investing for our future.

November 10 Net Worth 97K: Thankful for

November is done and whew...what a month! If you look closely you will see there is a new value in "Real Estate/Home Value" and in Mortgage. We purchased our first home this month. We did it despite my thinking that the housing market is going remain falling. We are trying to start a life and we found a home that we love. We also do not look at this an investment but more of a home where live and become a family, which is way more valuable than any price of money. We feel we got a great deal and we are not going to look back. We are happy and thats all I have to say...
Lets break it down:

Cash & Savings: We have been saving up for a house down payment but looks like we got one heck of deal on a home, so we will be keeping most of this. Our first goal is to get about 50K in the bank(cash) for saving before we really start putting our money to work. This has grown despite purchasing some major things for our new home(washer, dryer, and fridge). This bracket holds the funds for insurance, auto maintenance, Roth IRA, and vacation. It also holds my monthly budget in it. The rest is used on a daily bases for covering expenses, mortgage, food, auto, etc...

Stocks/Brokerage: Has been remained a good run with my brokerage account the last couple of months. I have purchased a few other stocks Silver Wheaton(SLW), Fronteer Gold (FRG) and Silvercorp Metals, Inc. (SVM). I sold off my GLD with a 20% gain from where I purchased and hoping these remaining gaining like they have the last couple months. I am just saving up some cash in the mean time to start dollar cost averaging into these. I am up around 13% in these. The list of stocks I currently own: (SLW)(FRG)(SVM)(EXC)(PWE)(PHYS)(EGO)(AUY)(AVARF)(RGLD)(ZQK)(XOM)(CVX).

*As you can see I am heavy in commodities in my brokerage account. This is all based on my thought that over the next decade the best investments are going to actually be in hard assets. My Roth/IRA/401k are in pretty common index funds and mutual funds so I figure I can go more risky with brokerage. I believe these will out perform equities in the next decade and if nothing else I feel more comfortable with my portfolio being diverse. I am bearish on the US Dollar and US Economy, I believe that trillion dollar deficits are not going bode well for the USA.

Retirement 401k: This bracket is just both my wife and my retirement, adding money to our retirement funds every month. Steady growth here...(update - the fed announced quantitative easing or money printing and the market has kinda been up and down, will wait and see what happens here.

Retirement IRA's: Still having some cash on the sideline and will figure out what this market wants to do and see if I can put it to work. In this bracket I have all Vanguard Funds (VTSMX, VGSTX, VEIEX, VGPMX)

Real Estate: So this is a new category, based off getting 100% financing, right now its not even an asset based of not having any equity in our home. The plan here is to keep our money that we were going to put down as a down payment in the bank or investments. We will try and hedge our payments with trying to pay off the home in 10-15 yrs depending on what comes our way. This might change along the way depending on kids, economy, jobs and so forth.

Debts and Liabilities -

Credit Cards: Debt for home stuff, will be paid off without any interest.

Car Loan: I am paying 4% APR on it so I am paying a little, but not a ton. Still looking to pay it off early-will probably be a goal this or next year. Now that we don't need to save up on the downpayment we might have to start paying a bit more per month even though our mortgage will be higher than we are paying now...will keep you posted.

Home Mortgage: Sending off first payment today, more to come in the next few years :)

I am so looking forward to hitting 100k in net worth hopefully in the next month or two, we have come so far in just two short years. I am blessed to have what I do and during these hard time for most families, we have been able to create a small amount of wealth.

In this time of year we will be thankful for what we have and hopefully spread some cheer over the holidays! We will be supporting a child at an elementary school, along with a family that is in need. My family decided not to give gifts this year but to sponsor a family who's mother is dying. We will try and donate to more as they arise.

Brilliant!! QE II Explained

Is Gold a dead asset?

The following if from one of my favorite websites FOFOA:

'The falling price of Gold has had various effects on people. The common person says, "Of course it is falling, because Gold has been demonetized." The Goldheart knows better, so the falling price has a more remarkable effect, bringing out insecurities and irrationalities of some. Though these people don't question that Gold is money, their insecurities start to question whether the world really needs money at all... that somehow this greatest device of mankind has been antiquated. Simply preposterous. If they knew the truth they would confidently buy today at triple the price and call it a bargain of a lifetime. People ask, "Why waste effort to dig up Gold from the ground, only to rebury it in vaults?" I say, "For the same reason the central banks toil to print millions of fancy notes that nobody reads. If you've read one, you've read them all." The effort is needed to prevent cheating, though we easily see the fancy cash does not stem the abusive tide of money from nothing. People also say, "Gold is a dead asset. It does not earn interest." What is the point of such a comment, to demonstrate their naiveté? Did banks not pay interest when coins were stamped from Gold?

You see, it is not the nature of money itself to earn interest, but rather, it is the investment risk that maybe earns a reward. A modern dollar in a shoebox is as a Gold coin beside it. No interest for either. You should know the interest paid by a bank savings account is not a product of the money itself, but instead it is the rewards on the risk the bank takes with the money you have provided for their investment use. Sometimes these banks choose poorly, and in those cases even the modern dollar earns no interest, and does not come back at all--lost with the closing of the bank doors. Money must be risked (invested) to expect a yield, and in this regard, the big players in the world risk Gold money as they do paper money (though often not as aggressively), while the small players are content with the shoebox yield. You are forced to be more aggressive (more risky) with paper because its value dies quickly, unlike Gold that stands forever even in a shoebox of no risk.'

How I See the World Today | Jim Rogers

Jim Rogers is one of my favorite investors to listen to. These are a must watch:

September 2010 Net Worth: 90K, I can smell 100K!

August and September are all in the books and things keep looking up despite whats going on. Thats because the wife and myself have combined all of our money. We still have some tinkering to do with her retirement and such but overall we are feeling good. That is another reason I did not put up our net worth last month so bear with me.
Lets break it down:

Cash & Savings: Huge jump since last time I posted our net worth, this is mainly due to combining my wife's saving and my savings. We have been saving up for a house down payment but looks like we got one heck of deal on a home, so we will be keeping most of this. Our first goal is to get about 50K in the bank(cash) for saving before we really start putting our money to work. We have to purchase some major things for our new home(washer, dryer, and fridge) so this will be drained a bit over the next couple months. This bracket holds the funds for insurance, auto maintenance, Roth IRA, and vacation. This is why it can be a little deceiving, it also holds my monthly budget in it. It has about 13-15k sitting around as savings the rest are funds that are going to be used at some point over the year. The rest is used on a daily bases for covering expenses, rent, food, auto, etc...

Stocks/Brokerage: Has been a good run with my brokerage account the last couple of months. I decide to go ahead and pull the trigger on Exelon Corp. I am just saving up some cash in the mean time to start dollar cost averaging into these. Overall I am up around 10% in these. The list of stocks I own (EXC)(PWE)(PHYS)(GLD)(EGO)(AUY)(AVARF)(RGLD)(ZQK)(XOM)(CVX).

*As you can see I am heavy in commodities in my brokerage account. This is all based on my thought that over the next decade the best investments are going to actually be in hard assets. My Roth/IRA/401k are in pretty common index funds and mutual funds so I figure I can go more risky with brokerage. I believe these will out perform equities in the next decade and if nothing else I feel more comfortable with my portfolio diverse. I am bearish on the US Dollar and US Economy, I believe that trillion dollar deficits are not going bode well for the USA.

Retirement 401k: This bracket is just both my wife and my retirement, adding money to our retirement funds every month. Big tick up this month because of combining...we will wait and see how the stock market plays out come the fall. (update - Fall is here and based off quantitative easing or money printing coming down the line, I am starting to think the market might raise dramatically, as money will have to flow somewhere)

Retirement IRA's: So I have jumped back into some funds as I had a large amount of cash sitting on the sidelines. I put most into precious metals & mining fund(VGPMX). In this bracket I have all Vanguard Funds (VTSMX, VGSTX, VEIEX, VGPMX)

Debts and Liabilities - Vehicle under 7K!! Credit Cards done...

Credit Cards: don't have much to say here! $0.00

Car Loan: I am paying 4% APR on it so I am paying a little, but not a ton. Still looking to pay it off early-will probably be a goal this or next year. Now that we don't need to save up on the downpayment we might have to start paying a bit more per month even though our mortgage will be higher than we are paying now...will keep you posted.

I am still extremely bearish on the world economy and the US economy...We are headed for a financial storm and it is very important for all of us to be up to date on current events. It time to be prepared for the worse and pray for the best.

Thing will be getting shifted here and there over the next few months with everything we have gong on with the home purchase and combining finances but overall I feel pretty good and cannot wait to see what happens come of end of year to see how far we have come. Until then good luck with your own budget and growing your wealth.

Gold & Silver Represent Freedom From The Matrix - Mike Maloney in Red Sq...

Overdose: The Next Financial Crisis

Is Ayn Rand’s Atlas Shrugged Future Possible?

I highly suggest you read Dollar Commentary's post "Is Ayn Rand’s Future Possible?" DC has done an great job of summing up Atlas Shrugged and where we as a country could be heading.

Read More at www.dollarcommentary.com

I have been saying, if you have ever wanted to read Atlas Shrugged,now is the time because as you read the book, you turn on the TV and the ideas and situations that Rand talks about in the book are happening everyday.

The Sacred Cow

Socialism: If you have two cows, you give one to your neighbor.

Communism: If you have two cows, you give them to the government and the government then gives you some milk.

Fascism: If you have two cows, you keep the cows and give the milk to the government; then the government sells you some milk.

New Dealism: if you have two cows, you shoot one and milk the other; then you pour the milk down the drain.

Nazism: If you have two cows, the government shoots you and keeps the cows.

Nanny Stateism: If you have two cows, we’re going to show up at your house at dawn with a cease-and-desist letter and forbid you to do anything useful with their milk until you comply with General Laws Chapter 94, Sections 13 and 16 through 16K, Chapter 94A, and the regulations found in 330 CMR 27.00 et seq.

Capitalism: If you have two cows, you sell one and buy a bull.

Jim Sinclair's Mindset on Federal Reserve

Seriously, it is hard to hide my contempt of this disgusting scene. This band of fools somehow believes that prosperity can be created by printing money without any consequences whatsoever. The US is sinking under a mountain of indebtedness and the Fed chairman tells us that it stands ready to engage in even more QE should the need arise. Flash to Ben – the need shall arise. China is already balking at buying US debt meaning you are going to have to buy it all yourself Ben.

What we are witnessing is the death throes of a debt-based monetary system of which those presiding over it apparently have come to believe their own delusions. The US public is learning what our grandfathers learned as a result of the Great Depression – Debt is something to be avoided – not heaped up and accumulated. That the borrower becomes the lender’s slave and that living beyond ones own means is inherently foolish and dangerous. That saddling one’s children and grandchildren with a debt burden that they did not create is immoral and wicked. Yet, all of this is lost upon the monetary lords who have their noses so close to the ground sniffing out the scent that they cannot see the path ahead leads off the edge of an abyss from which there is no escape. Or perhaps they do see and are attempting to secure their own parachutes before leading the rest of the masses over the edge.

I repeat – if lasting prosperity could be created by printing money and giving it away, previous generations that were wiser and more frugal than ours would long ago have stumbled upon this axiom.

That brings us to the war on gold. I am still amazed that after all these years and notwithstanding all the evidence to the contrary, there are still those obtuse enough to insist that there are no official sector attempts to manage or stem the rise in the price of gold. Gold is the only currency that these debasement thieves cannot pollute by conjuring more of it into existence. It rises when distrust of paper currencies is high and confidence in the ability of those who supposedly manage monetary affairs wanes. Thus it is and always will be in direct competition with unbacked fiat currencies.

Our money masters hate the yellow metal because its rise mocks their absurd assertions and debunks their claims of being able to “manage the economy”. It strikes, dagger-like, at the very hubris of these elitists who think that they are wiser than the collective judgment of the entire market, they alone possessing such keen insight into the nature of these matters that we should entrust our financial health to their hands. Imagine the conceit of a few men who think that by pulling on this lever or pushing on this button, that they can assure continuous prosperity and lasting wealth for all. Every generation considers itself wiser than the previous one which is why history does indeed repeat itself. Arrogant men never learn for they lack the one thing essential to make one truly wise – the ability to admit that we do not know all things nor that we mere mortals can always fix what ails us.

-Dan Norcini

Taken from Jim Sinclair's MindSet

Tony Robbins Economic Warning 1-2

Part I: Eric Janszen interviews Elizabeth Warren for The Postcatastrophe...

The Story of Spending

Again I have learned with my studies that its really not a left or right, Republican or Democrat, all politicians love to spend our money...

Jesse's Café Américain: The Inflation and Deflation Debate Deconstructed

Jesse's Café Américain: The Inflation and Deflation Debate Deconstructed: "'What most people call reason is really rationalization. Given a new set of data, most people will search through it only for those example..."

July 10 Net Worth: $58k Overall 6.59% Growth

Another good month for us with the total net worth jumping up by 6.59%. This is the last month before we join our finances! We didn't have much going this month, we did have to put new breaks on one of our vehicles. We just need to keep this up we are feeling really good about our situation...
Lets break it down:

Cash & Savings: We saw a slight dip in our cash savings because of the purchasing of stock and PMs. Hopefully in the next few months we will see some growth as were have started to really kick up the saving for a downpayment for a home. This money grows from money directly transferred from paycheck into my money market, savings account and checking. This bracket holds the funds for insurance, auto maintenance, Roth IRA, and vacation. This is why it can be a little deceiving, it also holds my monthly budget in it. It has about 13-15k sitting around as savings the rest are funds that are going to be used at some point over the year. The rest is used on a daily bases for covering expenses, rent, food, auto, etc...

Stocks/Brokerage: This month we was slight tick up but that is mostly because purchasing of a gold stock Sprott Physical Gold Trust(PHYS) and Penn West Energy (PWE). I have about another 1k in the account which I am eyeing Exelon Corp (EXC) or more Exxon (XOM). As of right now I am holding back and hopefully save up some cash. The list of stocks I own (GLD)(EGO)(AUY)(AVARF)(RGLD)(ZQK)(XOM)(CVX).

*As you can see I am heavy in commodities in my brokerage account. This is all based on my thought that over the next decade the best investments are going to actually be in hard assets. My Roth/IRA/401k are in pretty common index funds and mutual funds so I figure I can go more risky with brokerage. I believe these will out perform equities in the next decade and if nothing else I feel more comfortable with my portfolio diverse. I am bearish on the US Dollar and US Economy, I believe that trillion dollar deficits are not going bode well for the USA.

Retirement 401k: This bracket is just me adding money to my 401k every month. Slight tick up this month...we will wait and see how the stock market plays out come the fall. Until then not tinkering with this.

Retirement IRA's: Slow growth here this month. I still think the market is going to correct itself. I pulled back half of my Roth into cash, so have about half my retirement in cash right now. I will keep cash on the sidelines and just try and max out my fiancés and my Roth's next year. In this bracket I have all Vanguard Funds (VTSMX, VGSTX, VEIEX)

Debts and Liabilities - Vehicle under 8K!! Credit Cards done...

Credit Cards: Breaks on one of our vehicle and flights out to a wedding on the west coast, they will both be payed off by end of the month. I pay off any Credit Card debt monthly.

Car Loan: I am paying 4% APR on it so I am paying a little, but not a ton. Still looking to pay it off early-will probably be a goal this or next year. We are still saving up for a house so not sure its in our best interest to get rid of our cash sitting to be debt free on my vehicle.

May is now in the bank, I am still extremely bearish on the world economy and the US economy...We are headed for a financial storm and it is very important for all of us to be up to date on current events. It time to be prepared for the worse and pray for the best.

One thing I am excited about next month is the we will be combining our finances in August and will be showing it next month...looking for a jump in total net worth. Until then good luck with your own budget and growing your wealth.

Personal Strategies against a Government Policy Sponsoring Destitution