Hey guys,
Just came into some extra money and I'm looking to invest in silver. The problem is: I don't know where to buy it for a reasonable price (close to or slightly above spot price for the day.) This would be stored with me in case of a very very very rainy day (I'm talking like hyperinflation, ruined fiat currency). It is an insurance policy in case the worst happens and I need reliable money to fall back on. I want silver because it is more easy to pay for something with a silver coin since the kind of purchases I would be making would be for bare essentials like bullets, rice, flour, etc, and so handing a $300 coin would be much less practical than say a $30 coin. This is also why I do not want bullion bars. They are worth too much and I do not have the means to break them into smaller pieces precisely enough. I also want to avoid rare coins that double the price over the spot price. I also want to store the silver myself. I have about $15 grand I am looking to spend, and as of today an ounce of silver is about $33 an ounce. Silver eagles seem like the ideal thing to get but everywhere I look they are anywhere from $43 to $48 an ounce depending on where you look. I don't care about the year, design, etc...just the raw metal in single ounce denominations and from a reliable dealer where I know I'm not getting bunk, diluted silver. Maybe I am asking for too much but can I get this for less than $43 an ounce, or is that just the markup?
First off, to be clear, buying silver is not exactly "investing".
Based on what you've described here, you may want a few 1 oz coins, but it sounds like what you're really interested in is junk silver.
Education is always good. First, see the basics about precious metals.
As for where to get it, I would first check around local places. Call up any gold & silver dealers in the area that you could visit and ask if they sell junk silver, what types (i.e. what coins), and what they charge. The reason I suggest this is because you'll be able to physically inspect the coins before you buy. Second, you can avoid any shipping cost. And third, you can buy in smaller quantities. If you have at least $500, I would call up Peter Schiff's company and talk to them about buying a bag. I've dealt with them before, they're very professional, and I trust them (as well as Schiff himself). See here. (scroll to bottom for junk silver bag).
I would also give a call to this CMI company. But here's the thing with it:
The CMI site is interesting. Almost too good. With just a cursory look-through, it all looks like accurate info/advice. The "essential reading" list is almost entirely Austrian texts...basically all sold in the Mises Store, actually. My issue with it is the fact that I don't think I've really heard much about it. And as a precious metals company spreading decent info and Austrian economics literature and websites (see the "industry links" at the bottom of the page), I would think I would have heard of it. It bothers me that I hadn't until only recently when someone sent me a link. It makes me wonder if it's not a legitimate company and is simply trying to appeal to a specific demographic of potential buyer (or in a scammer's case, mark). Even still, it's certainly worth a call. I would at least hear what they have to say. They seem very open, and the number and hours of operation are prominently displayed all over the site, so they may very well be straight. Shop those recs and compare the deals. They may even be flexible and work with you on lower delivery costs or maybe even smaller orders. If you can afford a bag, I'd definitely lean toward EuroPacMetals, just because I know them, and their pricing is fair (usually among the lower end). If the CMI pricing is wayyy lower, I'd be interested to talk more about it. Obviously compare those to eBay as well. If you can find some ebay deals that are way lower (even including shipping), and the seller has a good rep score, I wouldn't feel very concerned buying that way either.
Bob Murphy:
Once a young person has accumulated at least a month's window in cash and has neutralized variable-rate debts, I think an excellent outlet for some of the saving each month is the acquisition of gold and silver coins. These don't need to be collector's items; in fact my favorite thing is "junk silver," because if the Big One comes it will be easy for other Americans to recognize US coins that were minted before the 1960s and have an easily verifiable silver content.
$25$22
From an Austro-libertarian perspective, the other great benefit of buying at least some physical gold and silver is educational: This is what genuine, market-produced commodity money feels like.
I
I work in insurance and we offer products that offer very modest internal rates of return in the form of cash values. While they are modest returns they are better than any CD as well as most mutual funds, IRAs, and 401k's, and they beat out inflation as well. Not only that, but your cash value is totally liquid, and grows & pays out tax free. You can also cash out at any age with no penalties. Additionally, your creditors can neither touch the cash value nor the death benefit. All of this, plus a guaranteed minimum interest rate and death benefit with a level premium for however long you arrange to pay for the policy. It never ceases to amaze me how many people tell me that whole life insurance is not a good investment. DUH. Investment involves risk. Life insurance is a contract that stipulates certain things will happen if certain conditions are met. It is insurance with investment properties. Now, the reason I bring this up is three fold.
1) I use the above to illustrate the point that I know gold and silver are not as much investments as they are INSURANCE against total collapse of the fiat currency. They are slightly investments in that the amount of gold or silver may rise and fall as more is mined (increasing the supply) or is used in consumer and producer goods (decreasing the supply), or consumer confidence, or even perceived consumer confidence, in the fiat currency changes . So, I am well aware that usually it is not the value of gold and silver that changes, but rather the value of the dollar it is compared to. 2) I also give the above information on insurance as a little education to all of my fellow austrians that insurance might also be something you should consider "investing" in as part of your portfolio. Cash value life insurance is not just a way of providing income to your family after your death. It is also a way to shield your money from taxation and inflation. I don't know of anything that shields you from both inflation and taxation besides cash value life insurance. Gold and silver are great at virtually eliminating the long term risks of hyperinflation and inflation in general. But, because they are almost in no way an investment (no risk thus no reward), then in the short term it is impractical to put all your bones in gold and silver. You need a way to keep access to some currency while also shielding it from inflation. For this we turn to investments. However, these are risky because while you can become very rich, or at least beat out the inflation rate, you can also become very poor and lose all of your money all together, should the market take another and even steeper turn for the worst and your investments do not pan out. While I wouldn't say keeping all of your investment money in low risk/low yield investments is wise, I would say a portion of it should be in low risk/low yield investments, as a median between the security of commodities and the growth potential of investments. If you could beat out inflation and have as good a guarantee as any that you will do so, why would you put your "quiet money" in any other investment?
3) I am trying to expand my network of clients, and so I naturally want to go to my warmest markets. I love austrian economics, I love austrian scholars, such as yourselves, and I love talking about austrian economics with austrian scholars. I feel like I can help them prepare for the worst in ways they may not have considered and I've waited till now, after having established myself on these forums more, to bring it up. If you are interested in learning a bit more, please private message me and we can talk on the phone. I am licensed to do business in all states, so your location (even out of the US) isn't a very big problem. Unfortunately, due to contracts I have signed with my partner company, I cannot tell you over this forum which company I work for unless I am solicited by one of you asking for more info, but I can tell you it is one of the largest mutual companies out there. We took no bailout money of any kind. We have all of the highest financial ratings achievable among all of the ratings agencies, and, finally (I'm sure this will not surprise most of you), our reserves are several multiples of the amount the FDIC has on their books. [note* - in case you don't know, reserves are the amount of money we have at our disposal in the near-impossible event that every one of our policy holders were to cash at at one time. We would still have billions of dollars lying around.] If for nothing else, contact me and learn about your options. I aint gonna push a damn thing on you or even tell you to arrange your insurance through me. I just feel I owe it to this community to teach what I know a lot about in exchange for all I have learned from all of you over the years. Again, cash value life insurance can be a great package for some of your funds because:
1) it has the tendancy to beat out inflation. 2) we are a mutual company, so our financial health is RELATIVELY unaffected by market conditions. We can make long term decisions that are good for the policy holders instead of being bound to the whims of ever changing traditional stockholders, more concerned with short term gains. 3) you can both grow and liquidate (or borrow) your cash value tax free.
caulds989:I work in insurance and we offer products that offer very modest internal rates of return in the form of cash values. While they are modest returns they are better than any CD as well as most mutual funds, IRAs, and 401k's, and they beat out inflation as well.
That doesn't make any sense. IRAs and 401k's are simply investment shelters. You can invest in virtually anything through the vehicle of an IRA (401k's tend to be more limited unless you yourself are the employer providing it...i.e. you're self employed, but they still have a wide range of possible investments, regardless). Claiming rates of return on insurance products are better than most IRAs and 401k's is like saying your paycheck is more profitable than your bank account.
Are you sure you even know what you're talking about?
I use the above to illustrate the point that I know gold and silver are not as much investments as they are INSURANCE against total collapse of the fiat currency.
False. Precious metals like gold and silver are not insurance policies against a total collapse of a fiat currency. They are simply money. They are a store of value. They are a reliable way to save. That's basically it. Again, I recommend you read the link I provided in the first post.
They are slightly investments in that the amount of gold or silver may rise and fall as more is mined (increasing the supply) or is used in consumer and producer goods (decreasing the supply), or consumer confidence, or even perceived consumer confidence, in the fiat currency changes . So, I am well aware that usually it is not the value of gold and silver that changes, but rather the value of the dollar it is compared to.
If you want to argue that, then you may as well just say savings = investment. As in, there is no difference...because you're literally saying that whatever form you save your non-consumed productivity in, you are "investing" in that. As in, if I am a tanner, and I tan more hides than I sell, and I end up with a surplus that I accumulate for a "rainy day", I would say I have some savings. You would say I'm "investing" in hides.
By the same token, if I earn a paycheck of US dollars every month, and I put a percentage of that away in a bank account, again according to you that means I'm "investing" in US dollars. I don't have any "savings". I have "investment".
I suppose you can make up whatever definitions you want, but for most people, there is a difference between "saving" and "investing". (Again, explained in that link).
I also give the above information on insurance as a little education to all of my fellow austrians that insurance might also be something you should consider "investing" in as part of your portfolio. Cash value life insurance is not just a way of providing income to your family after your death. It is also a way to shield your money from taxation and inflation.
There is a myriad of tax shelters.
And how in the world does a cash value payout protect from a devaluation of the currency in which it is denominated? That makes absolutely no sense.
I don't know of anything that shields you from both inflation and taxation besides cash value life insurance.
Gold in an IRA shields you from both inflation and taxation. (This is just one example).
Gold and silver are great at virtually eliminating the long term risks of hyperinflation and inflation in general. But, because they are almost in no way an investment (no risk thus no reward), then in the short term it is impractical to put all your bones in gold and silver.
I've never heard of anyone suggesting putting all bones in any one asset class. In fact, not doing that is virtually the one thing everyone, from joe blow know-nothing, to billionaire investment gurus, to pump and dump stock scammers, agree on.
You need a way to keep access to some currency while also shielding it from inflation. For this we turn to investments.
That doesn't make any sense.
An investment is a purchase of something that is supposed to generate income. (Again, as I said in the link, personally I differentiate purchasing something based on anticipated appreciation, deeming that "speculation".)
Unless you are actually going to follow through with the logic I laid out above, and claim that simply saving something is "investing" in it, you cannot claim that "investing" allows you to "keep access to some currency". In other words, the only way to "keep access to some currency" is to hold some currency.
If I have to rely on some other party to give me currency in exchange for something else I'm holding, then there is no real assurance of "access" to that currency. It sounds like your argument is that if things go bad and you need cash, you can always cash in your policy. Why is that so different than "cashing in" your gold, or your silver, or your CDs, or your leather hides?
I am trying to expand my network of clients, and so I naturally want to go to my warmest markets. I love austrian economics, I love austrian scholars, such as yourselves, and I love talking about austrian economics with austrian scholars. I feel like I can help them prepare for the worst in ways they may not have considered and I've waited till now, after having established myself on these forums more, to bring it up. If you are interested in learning a bit more, please private message me and we can talk on the phone. I am licensed to do business in all states, so your location (even out of the US) isn't a very big problem. Unfortunately, due to contracts I have signed with my partner company, I cannot tell you over this forum which company I work for unless I am solicited by one of you asking for more info, but I can tell you it is one of the largest mutual companies out there. We took no bailout money of any kind. We have all of the highest financial ratings achievable among all of the ratings agencies, and, finally (I'm sure this will not surprise most of you), our reserves are several multiples of the amount the FDIC has on their books. [...] If for nothing else, contact me and learn about your options.
[...]
If for nothing else, contact me and learn about your options.
And there it is. This is borderline advertising (i.e. grounds for banning). And simply asking a few questions (and then never responding to the answer) is not exactly "establishing yourself" on the forum. And the fact that you bust out with this entire infomercial out of nowhere, and then actually offer that you were trying to "establish yourself" here before doing so, only leads one to believe this was a major part of your reason for joining all along.
Claim that you enjoy talking to Austrians all you want. Claim that you love Austrian econ and Austrian scholars till your heart's content. But don't come in here pretending to be asking for help and advice and then start lecturing the forum and soliciting business for yourself. In my view this is even worse than overt spammers.
On a separate matter,
You mean, on the matter of which you (apparently fraudulently) created this thread.
I have seen junk bags of silver before. What I wonder: in an apocolyptic setting where fiat money is totally worthless and people move to bartering or trading in commodities, would these junk coins be accepted? what I mean is, if it is a coin like say the silver eagle, americans could easily recognize this and know "yeah, this is probably legit silver" but with some other obscure coin might they say, "look, I've never seen this coin so how the hell am I supposed to know if it really is nearly pure silver?"
You're suggesting that someone would recognize and accept a silver eagle (a coin they have very likely never seen before in their life), but they wouldn't recognize and wouldn't accept a dime minted before 1964? You may want to visit that precious metals basics link because once again, it doesn't sound like you have any clue what you're talking about.
...But then again, I'm not even so sure you were ever actually interested in talking silver in the first place.
I'm with JJ on this one.
Savings can be used as a form of self-insurance but gold is not "insurance" against inflation - it's money!
Insurance is not an investment.
Clayton -
You shouldn't be trying to guess what the best money will be once (if) hyperinflation hits. Just purchase something that is going to remain convertible and store value until then, then convert to whatever is the easily divisible new money when you need to, or just before that. One ounce silver may be a good bet for future currency in everyday transactions, but as you have noticed the markup on small pieces is substantial, so by sinking 15 grand into it you could be gutting yourself relatively speaking if your prediction doesn't come true. Think about it, if it really comes to hyperinflation maybe there will be a smelter taking your 1kg bar of silver and giving you 1kg of small coins in return for a very modest fee on every corner. Or maybe people will just use Canadian Dollars and Yen (like they used US Dollars in Zimbabwe) for daily purchases so it won't matter when selling it if you have your silver in one ounce or one kilogram pieces at all. It's your money, but my suggestion would be to put some of that in one ounce (or even larger) gold, where it will remain just as safe and just about as convertible, but at a far lesser premium. Also you may actually buy today some of the foodstuffs you would be buying in hyperinflation. You buy in bulk and at a time of relative plenty, so you're much better off. You'll even save from a housekeeping point of view.
Maybe I am asking for too much but can I get this for less than $43 an ounce, or is that just the markup?
I guess you could ask for a quantity discount and see if it got you anywhere, but if you buy a few pieces that's pretty much where it's at.
My personal suggestion is to always prefer gold over silver. In 2010 I reduced my yearly gold purchase to make room for some silver but it didn't convince me very much so last year I reverted to a gold only policy.
If you can afford to spend little or want small pieces there are gold alternatives to silver. European, South African and South American mints have coined 5g bars from 999,9 purity downwards and there are bullions at 750 purity available on the market. If I remember correctly South Africa also minted 1/10 of an ounce bars. There are many small gold coins available on the market: 1/10 Krugerrand, 1 Rand, 1/20 and 1/10 Maple Leaves, 2 and 2&1/2 Mexican pesos. $1 coins (Indian Princess, Liberty Head etc) are also available but they usually sell at a premium due to numismatic interest and high demand. Finally Mexico also minted 1/4 oz bullions at 900 purity which may be of interest to you since they are not as sought after by collectors and investors as pesos.
It's nice that you guys are trying to help and offer answers to the inquiries in the OP...but at least read his reply post. This thread was obviously not about gold and silver...let alone getting help with buying it.
Do I have to? It's kinda long.
Sorry I haven't responded in a couple of days. Its been real busy. Yeah john, It's not like I have any interest in buying gold. I thought I would take a good amount of my day learning and teaching on here just in the off chance that maybe someone might be interested in what I have to offer. (sarcastic) please. You know, for someone who attacks people for making blind assertions about things, you sure do presume a lot about many of the members on this site. You know a lot. that is obvious. That doesn't mean you have to be a total ass about everything. Just because you're intelligent doesn't warrant arrogance and contempt. We're all on the same team here. Spend less of your time dishing shit and presuming what you do not know, and more of your time doing what you're good at: teaching what you do know. In either case, I appreciate your input. now, before you accuse me of changing the subject to your rudeness instead of defending my points, I'll respond to your post above. If you think I am wrong, tell me. Maybe I will learn something. Just keep your assumptions about my motives to yourself because both your opinions and my motives are, in any case, irrelevant.
Here we go.
John James: caulds989:I work in insurance and we offer products that offer very modest internal rates of return in the form of cash values. While they are modest returns they are better than any CD as well as most mutual funds, IRAs, and 401k's, and they beat out inflation as well. That doesn't make any sense. IRAs and 401k's are simply investment shelters. You can invest in virtually anything through the vehicle of an IRA (401k's tend to be more limited unless you yourself are the employer providing it...i.e. you're self employed, but they still have a wide range of possible investments). Claiming rates of return on insurance products are better than most IRAs and 401k's is like saying your paycheck is more profitable than your bank account.
That doesn't make any sense. IRAs and 401k's are simply investment shelters. You can invest in virtually anything through the vehicle of an IRA (401k's tend to be more limited unless you yourself are the employer providing it...i.e. you're self employed, but they still have a wide range of possible investments). Claiming rates of return on insurance products are better than most IRAs and 401k's is like saying your paycheck is more profitable than your bank account.
Excuse me, John, I (somewhat) misspoke, and I see how you could have misunderstood what I meant. I was a bit lazy with my verbiage which I should have been more mindful of knowing you are on the case. What I meant was that the returns beat most CDs, and, in today's world, are better ways to organize your investment assets than IRAs and 401(k)'s. You are right, the latter two are merely vehicles to fund the buying of stocks, bonds, mutual funds, etc with certain tax advantages WITH THE STIPULATION THAT CERTAIN CONDITIONS ARE MET AND CERTAIN LIMITATIONS ARE NOT MET. Today, most IRA's are performing badly. This, of course, is just another way of saying the funds in the Roth are performing badly which is mostly because the stock market is, as of recent history, performing badly overall.
Most people (not professional investors) would be grateful to see an overall rate of return of 4-5% in these vehicles, unless you are talking about a 401(k) where your employer is matching 33c to 50c on the dollar, then your return could be 33-50% immediate return or more on investment. However, all of this assumes that your employer is even matching anything at all anymore, that you have not met your contribution limits, and I'm ignoring the fact that on a Roth and a 401k you pay taxes on that money up front, and the traditional IRA paying taxes after growth.
Now, If you are like most people, your employer is matching little to nothing on your 401k these days. The 401k also has the strict contribution limits of 15 percent of your salary or $10,000, whichever is smaller. If its a small company it could be as little as $6000. As for the Roth, the contribution limit is 2 grand a year for most people, and the cap may be lower if you have a retirement plan at work or your income reaches certain limits (all the more reason wealthier people should buy cash value life insurance). The Roth is also a retirement vehicle to house retirement investments that may or may not return anything (with high hopes set at 4-5% annually), but at least receives TAX BREAKS. However, a TAX BREAK is far from TAX FREE, isn't it. Additionally, with a trad. IRA you must start with drawing by age 70 and a half. With a Roth and a 401k, you cant withdraw the money until age 59 and a half.
So the question is, would you prefer to put your money in something that guarantees a minimum of somewhere between 3.5-5% tax free, with no contribution limits, that pays extra money to your heirs when you die, and can be accessed at any time penalty free, and within a short period of time 5-7 years is guaranteed to exceed what you've put in, and cannot be touched by your creditors or be considered income
OR.....
put your money in something that may or may not even pay that interest rate before tax, much less the after tax equivalent, with the above contribution limits, does not pay anything extra to your heirs other than its current monetary value, and can only be accessed after a certain date, and cannot be left alone to grow after a certain later date, then when you die, that money may be subject to debt, as well as estate taxes as it is considered a taxable asset?
I am in no way saying that using your 401k or IRA to fund your riskier investments is a bad thing! It is not. They can be very useful. But, as I've shown, their usefulness is quite limited due to certain laws as well as the nature of their workings. What happens when you make millions of dollars and you have met your limits? Where do you put that money. Even if your Roth and 401k are performing handsomely, as they have before, many people who are not millionaires meet their limits and I think it is obvious right now that CD's as well as checking and savings accounts are just loosing you money. Why not place part of the rest of your money in something that beats those options by A LONG SHOT?
John James: I use the above to illustrate the point that I know gold and silver are not as much investments as they are INSURANCE against total collapse of the fiat currency. False. Precious metals like gold and silver are not insurance policies against a total collapse of a fiat currency. They are simply money. They are a store of value. They are a reliable way to save. That's basically it. Again, I recommend you read the link I provided in the first post.
I read your link. I like it. I was not trying to imply that they are actually insurance against currency collapse. I was trying to say that they can function as such. If total collapse occurs, gold and silver will be accepted as something of value that will be universally accepted and exchanged. We agree that they are a reliable way to save.
John James: They are slightly investments in that the amount of gold or silver may rise and fall as more is mined (increasing the supply) or is used in consumer and producer goods (decreasing the supply), or consumer confidence, or even perceived consumer confidence, in the fiat currency changes . So, I am well aware that usually it is not the value of gold and silver that changes, but rather the value of the dollar it is compared to. If you want to argue that, then you may as well just say savings = investment. As in, there is no difference...because you're literally saying that whatever form you save your non-consumed productivity in, you are "investing" in that. As in, if I am a tanner, and I tan more hides than I sell, and I end up with a surplus that I accumulate for a "rainy day", I would say I have some savings. You would say I'm "investing" in hides. By the same token, if I earn a paycheck of US dollars every month, and I put a percentage of that away in a bank account, again according to you that means I'm "investing" in US dollars. I don't have any "savings". I have "investment". I suppose you can make up whatever definitions you want, but for most people, there is a difference between "saving" and "investing". (Again, explained in that link).
Technically, you are right, there is a difference. I was using the term in a relaxed manner. I do not think it is unreasonable in casual conversation to say where you spend your money is what you have invested in. If you buy a coke, you have, in a sense, invested in that coke. I think this is mostly a semantic argument, but today, I would not say putting your earned fiat money in a bank account is really much of a savings. Today its more of a loss. But perhaps I should have clarified that.
John James: I also give the above information on insurance as a little education to all of my fellow austrians that insurance might also be something you should consider "investing" in as part of your portfolio. Cash value life insurance is not just a way of providing income to your family after your death. It is also a way to shield your money from taxation and inflation. There is a myriad of tax shelters. And how in the world does a cash value payout protect from a devaluation of the currency in which it is denominated? That makes absolutely no sense.
Those tax shelters can be very beneficial. However, the problem with offshore bank accounts (as i understand them) is that, unless you plan to move to the country you have placed these funds, then you are merely delaying your tax obligation to the point at which you use the money domestically. I could be wrong about that. I am unaware of how to get around this problem. As for the third party interest rate system laid out in the wiki you posted, it seems that there is a fairly good chance of this causing an audit, which would essentially ruin your plan. but wealthy people do get away with this all the time, and I think thats a great thing. Again, I dont think these are necessarily bad ideas if you can position them correctly, but I imagine it takes a great deal of time and expertise (which means money if you dont know what you are doing) to arrange these things.
As for the cash value payout, it is not the payout that shields you from inflation. What I meant by shielding from inflation was that the guaranteed interest rate alone is higher than the current rate of inflation. And that's just the guaranteed rate. Its currently about 1.5% higher than the current inflation rate, plus you are given dividends every year, due to our being a mutual company. So, in that sense, you are shielded from inflation. Instead of your money just sitting in a checking account or a CD where you are lucky to even be given 1% annual interest, and effectively losing real value after inflation, you can be guaranteed not to be loosing that money. With Gold, you are essentially equalizing with inflation because the value of Gold is pretty much relative to the money supply. And if we are truly realistic, you will initially lose some of your money on Gold because of the fees in buying it, as well as temporary occasional losses in its perceived value based upon (however wrong) the consumers confidence is in the dollar it is traded with. I was suggesting cash value life insurance for the money you have for your "emergency fund", or money that is in savings doing nothing for you. The reason we put it in CDs and bank accounts is because it is so liquid. But cash value life insurance (and other insurance) is just as liquid, while providing a nice interest rate, as well as a dividend, in this case.
John James: I don't know of anything that shields you from both inflation and taxation besides cash value life insurance. Gold in an IRA shields you from both inflation and taxation. (This is just one example).
John James: Gold and silver are great at virtually eliminating the long term risks of hyperinflation and inflation in general. But, because they are almost in no way an investment (no risk thus no reward), then in the short term it is impractical to put all your bones in gold and silver. I've never heard of anyone suggesting putting all bones in any one asset class. In fact, not doing that is virtually the one thing everyone, from joe blow know-nothing, to billionaire investment gurus, to pump and dump stock scammers, agree on.
John James: You need a way to keep access to some currency while also shielding it from inflation. For this we turn to investments. That doesn't make any sense. An investment is a purchase of something that is supposed to generate income. (Again, as I said in the link, personally I differentiate purchasing something based on anticipated appreciation, deeming that "speculation".) Unless you are actually going to follow through with the logic I laid out above, and claim that simply saving something is "investing" in it, you cannot claim that "investing" allows you to "keep access to some currency". In other words, the only way to "keep access to some currency" is to hold some currency. If I have to rely on some other party to give me currency in exchange for something else I'm holding, then there is no real assurance of "access" to that currency. It sounds like your argument is that if things go bad and you need cash, you can always cash in your policy. Why is that so different than "cashing in" your gold, or your silver, or your CDs, or your leather hides?
John James: I am trying to expand my network of clients, and so I naturally want to go to my warmest markets. I love austrian economics, I love austrian scholars, such as yourselves, and I love talking about austrian economics with austrian scholars. I feel like I can help them prepare for the worst in ways they may not have considered and I've waited till now, after having established myself on these forums more, to bring it up. If you are interested in learning a bit more, please private message me and we can talk on the phone. I am licensed to do business in all states, so your location (even out of the US) isn't a very big problem. Unfortunately, due to contracts I have signed with my partner company, I cannot tell you over this forum which company I work for unless I am solicited by one of you asking for more info, but I can tell you it is one of the largest mutual companies out there. We took no bailout money of any kind. We have all of the highest financial ratings achievable among all of the ratings agencies, and, finally (I'm sure this will not surprise most of you), our reserves are several multiples of the amount the FDIC has on their books. [...] If for nothing else, contact me and learn about your options. And there it is. This is borderline advertising (i.e. grounds for banning). And simply asking a few questions (and then never responding to the answer) is not exactly "establishing yourself" on the forum. And the fact that you bust out with this entire infomercial out of nowhere, and then actually offer that you were trying to "establish yourself" here before doing so, only leads one to believe this was a major part of your reason for joining all along. Claim that you enjoy talking to Austrians all you want. Claim that you love Austrian econ and Austrian scholars till your heart's content. But don't come in here pretending to be asking for help and advice and then start lecturing the forum and soliciting business for yourself. In my view this is even worse than overt spammers.
John James: I have seen junk bags of silver before. What I wonder: in an apocolyptic setting where fiat money is totally worthless and people move to bartering or trading in commodities, would these junk coins be accepted? what I mean is, if it is a coin like say the silver eagle, americans could easily recognize this and know "yeah, this is probably legit silver" but with some other obscure coin might they say, "look, I've never seen this coin so how the hell am I supposed to know if it really is nearly pure silver?" You're suggesting that someone would recognize and accept a silver eagle (a coin they have very likely never seen before in their life), but they wouldn't recognize and wouldn't accept a dime minted before 1964? You may want to visit that precious metals basics link because once again, it doesn't sound like you have any clue what you're talking about. ...But then again, I'm not even so sure you were ever actually interested in talking silver in the first place.
caulds989:you sure do presume a lot about many of the members on this site.
Would you care to offer some examples?
You know a lot. that is obvious. That doesn't mean you have to be a total ass about everything.
I'm not a total ass about everything. I could provide a very large number of examples of this if you'd like. I could even provide you with plenty of unsolicited compliments and thank yous voluntarily offered to me by various members. Would you like some of these?
Just because you're intelligent doesn't warrant arrogance and contempt.
But trolling, purposeful ignorance, and fraud do.
We're all on the same team here.
And what team might that be? I don't sell insurance, and I certainly don't join forums for the purpose of "establishing myself" so that I might then be able to coax others into asking me about the products I sell (so as to avoid breach of contract for outright telling you who I work for), with the ultimate goal being to garner new customers for myself.
Spend less of your time dishing shit and presuming what you do not know, and more of your time doing what you're good at: teaching what you do know.
Thanks for the life planning, but I'm not sure it would be possible to spend less time "presuming what I do not know", as I spend virtually no time doing that already.
Just keep your assumptions about my motives to yourself because both your opinions and my motives are, in any case, irrelevant.
a) I don't have to assume anything about your motives, as you made them quite clear in your sales pitch.
b) My opinions are not irrelevant because (1) they are on topic of the conversations raised in this thread, and (2) they were the very thing you solicited by creating this thread.
c) Your motives are extremely relevant because I personally have no interest in placating to your salesmanship and actually bothering to answer questions about things that it would appear you care less about than gaining new clients. And I doubt many others here would either.
caulds989:You are right, the latter two are merely vehicles to fund the buying of stocks, bonds, mutual funds, etc with certain tax advantages WITH THE STIPULATION THAT CERTAIN CONDITIONS ARE MET AND CERTAIN LIMITATIONS ARE NOT MET.
You make it sound like they're so restricting that they're too much of a hassle to bother with, or basically useless. Would you care to outline some of these major conditions that must be met and limitations that must not be met?
Today, most IRA's are performing badly. This, of course, is just another way of saying the funds in the Roth are performing badly which is mostly because the stock market is, as of recent history, performing badly overall.
1) An IRA is not necessarily a Roth
2) You're going to have to specify your time horizon, because stocks are doing quite well as of late, and they're only going to get better...at least until after the election.
3) If all you meant was that the stock market wasn't doing well (which, again, over what time period?), then you should say that...because what you did say implies something along the lines of "IRAs are not a good investment"...which I as I said, doesn't even make sense, but could confuse people nonetheless.
And why exactly would you want to do that? Why wouldn't you just come right out and say "the stock market hasn't been doing well"? Why would you go that extra step out of your way to actually single out retirement vehicles like IRAs and 401k's and say they "haven't been doing well" (as if an investment shelter were actually an investment)?
Could it be that life insurance (the very thing you're trying to sell) is one of the only three prohibited investments for a retirement plan? Nah. I'm sure your own financial interest had nothing to do with your poor phraseology.
Most people (not professional investors) would be grateful to see an overall rate of return of 4-5% in these vehicles
And most people don't even have a clue as to what their plans are invested in, either. Most people are ignoramuses, and a good number of them, idiots.
However, all of this assumes that your employer is even matching anything at all anymore, that you have not met your contribution limits, and I'm ignoring the fact that on a Roth and a 401k you pay taxes on that money up front, and the traditional IRA paying taxes after growth.
...because you don't pay any taxes up front on money you use to buy life insurance.
I don't even know where to start with all this. I'll say one thing though, you're definitely an insurance salesman.
..So basically, a bunch of lies, distortions, and misleading statements...all meant to make options other than the one you're selling look less attractive. The only thing that you said that was actually correct was the requirement that you must begin to take the minimum distribution from an IRA after you turn 70.5 (and even that's not a "requirement", it's just that if you don't begin the distribution then, the money will be taxed at a very high rate when you do eventually take it out).
So actually, even the one thing you kind of got correct (just one!) was still technically wrong. I would try to fault you and say something along the lines of "this is your field...this is what you do for a living...how could you be so wrong on all of this?"...but then again, if you were actually right on any of it, it would make your own product look a lot less attractive, wouldn't it?
I guess the phrase "it pays to be wrong" works quite literally in your case.
caulds989:So the question is, would you prefer to put your money in something that guarantees a minimum of somewhere between 3.5-5% tax free
1) Life insurance distributions are no more "tax free" than Roth IRA distributions. "Tax free" is "tax free".
2) How exactly is a return "guaranteed" anyway? You're alleging there is such a thing as a "risk free investment"?
3) A "guaranteed" 3.5%-5% return is a net loss when inflation is pushing 10% (like it is now)
...with no contribution limits, that pays extra money to your heirs when you die, and can be accessed at any time penalty free, and within a short period of time 5-7 years is guaranteed to exceed what you've put in, and cannot be touched by your creditors or be considered income
Again, IRA money can be accessed at any time, penalty free. You are either very incompetent or very deceitful.
Or....put your money in something that may or may not even pay that interest rate before tax, much less the after tax equivalent, with the above contribution limits, does not pay anything extra to your heirs other than its current monetary value, and can only be accessed after a certain date, and cannot be left alone to grow after a certain later date, then when you die, that money may be subject to debt, as well as estate taxes as it is considered a taxable asset?
Most of these false characterizations were addressed above, but you've introduced a new one so I'll address that. It is entirely possible for retirement plans to avoid estate tax as well as inheritance tax. Naming beneficiaries properly will also completely avoid probate.
And even aside from all the lies and misleading statements you spout, the largest thing you neglect to mention is the biggest "limit" of all...the fact that the 3.5%-5% is a limit on investment earnings. As in, that's the most you'll make. Ever.
I'm sorry, but the average return on the S&P is well over 10%. Even if you take it back to 1871. And hell, 3-5% is what an average mutual fund might do. Monkeys throwing darts at the WSJ end up picking stock portfolios that perform better than that. Not kidding.
So even if I know nothing about the market, I could still do at least twice as good as your "guaranteed" insurance product by just picking a few stocks at random. And what's more, suppose I'm not interested in the stock market or that risk. Why the hell wouldn't I invest in something I know? How about I use my retirement plan to buy a couple of good-performing rental properties? Or, hell, I know a lot about auto mechanics...how about an autoshop? How about I use my retirement plan to be a hard money lender? Then I could guarantee myself returns upwards of 60% in 6 months (i.e., 120% annual)...backed by collateral that I would receive title to should I not get paid.
Yeah, I think I'm going to stick with my self-directed retirement plans.
I am in no way saying that using your 401k or IRA to fund your riskier investments is a bad thing! It is not. They can be very useful. But, as I've shown, their usefulness is quite limited due to certain laws as well as the nature of their workings.
No, you've done your best to paint them that way by spouting lies, half-truths, and nonsense.
What happens when you make millions of dollars and you have met your limits? Where do you put that money.
In the same places you directed the money from your retirement plans to.
Even if your Roth and 401k are performing handsomely, as they have before, many people who are not millionaires meet their limits and I think it is obvious right now that CD's as well as checking and savings accounts are just loosing you money.
You mean because the dollars that they are denominated in are losing value at a higher rate than the returns they are earning? Kind of like...a 3-5% life insurance policy?
Why not place part of the rest of your money in something that beats those options by A LONG SHOT?
You mean like, the stock market? Or something that would preserve your purchasing power, like precious metals and commodities? Certainly you couldn't mean a lower-than inflation-yielding insurance policy...right?
If you buy a coke, you have, in a sense, invested in that coke.
And if I hit someone with my car, I have, in a sense, gotten a new hood ornament.
I think this is mostly a semantic argument, but today, I would not say putting your earned fiat money in a bank account is really much of a savings. Today its more of a loss.
Because the rate of interest paid to you on that money is lower than the rate of inflation, right? Kind of like a 3-5% return insurance policy...right?
caulds989:Those tax shelters can be very beneficial. However, the problem with offshore bank accounts (as i understand them) is that, unless you plan to move to the country you have placed these funds, then you are merely delaying your tax obligation to the point at which you use the money domestically. I could be wrong about that. I am unaware of how to get around this problem. As for the third party interest rate system laid out in the wiki you posted, it seems that there is a fairly good chance of this causing an audit, which would essentially ruin your plan. but wealthy people do get away with this all the time, and I think thats a great thing. Again, I dont think these are necessarily bad ideas if you can position them correctly, but I imagine it takes a great deal of time and expertise (which means money if you dont know what you are doing) to arrange these things.
There were more than at least half a dozen things mentioned on that page, and you pick out 2 that you know almost nothing about, and attempt to pretend your attempts to discount them are even relevant.
The entire reason I included that link was just to give support to my point that there are a myriad of tax shelters. (I.e. despite your implications, buying life insurance from you is not the only way for a person to avoid the tax man.)
As for the cash value payout, it is not the payout that shields you from inflation.
So, you mean, it doesn't shield you from inflation.
What I meant by shielding from inflation was that the guaranteed interest rate alone is higher than the current rate of inflation.
No, it isn't. And if you weren't here to peddle insurance, I would actually be surprised that someone who claims to "love Austrian economics" would actually claim something like that.
And that's just the guaranteed rate. Its currently about 1.5% higher than the current inflation rate, plus you are given dividends every year, due to our being a mutual company. So, in that sense, you are shielded from inflation.
...too bad inflation is 2 to 3 times your guaranteed rate. Then buying what you're selling it might actually start to make sense.
With Gold, you are essentially equalizing with inflation because the value of Gold is pretty much relative to the money supply.
No, it isn't.
And if we are truly realistic, you will initially lose some of your money on Gold because of the fees in buying it, as well as temporary occasional losses in its perceived value based upon (however wrong) the consumers confidence is in the dollar it is traded with.
"Fees"? You mean, a small premium over spot price? Yes, I'm so sure an average OTC bullion premium is astronomical compared to the commissions on your policies.
caulds989:I was suggesting cash value life insurance for the money you have for your "emergency fund", or money that is in savings doing nothing for you. The reason we put it in CDs and bank accounts is because it is so liquid. But cash value life insurance (and other insurance) is just as liquid, while providing a nice interest rate, as well as a dividend, in this case.
Money contributed to an IRA is just as liquid as any of the other things you mentioned. Gold and silver are essentially just as liquid.
In a Roth, you still have the disadvantage of paying the taxes up front.
...because you completely avoid paying taxes up front on money you use to pay for life insurance policies.
no roth is better than another. It all depends on what you think your tax bracket will be, as well as what the tax rates will be for each bracket, when you decide to pull the money out.
That doesn't even make sense. It makes absolutely no difference what your tax bracket is with a Roth. As long as you've had the Roth for at least 5 years, if you start taking distributions after age 59.5, you pay zero taxes on those distributions. Period. I have no clue why you're even mentioning tax brackets.
So we agree? Again, I stated this to say that it might be wise to put (some of) your conservative funds into cash value life insurance.
You stated it as if anyone was talking about putting all their investment dollars into gold and silver, which, as I stated, not even scammers suggest. You're saying "hey, you need to diversify...you can't just put everything in gold...you should buy what I'm selling." And my point is, no one is talking about putting everything into gold. As in, there is already diversification. No one needs your product to be diversified.
For instance, lets say your annual premium on a whole life insurance policy is $100. Every year you pay that $100
...after you pay taxes on it, of course...right?
caulds989:The company invests that money and guarantees a minimum annual return every year.
"Guaranteed" huh? So you mean, like, even if the company invests the money poorly, and actually ends up posting losses...I'll still earn a positive return? And even if the company ends up not being able to pay all it's operating costs and ends up going bankrupt...I'll still be earning income?
Wow. That's awesome. I must learn more.
The first few years, the money is used to pay for the cost of insuring you. So at year one, you might have 0 cash vlaue.
Sounds pretty liquid. I'm definitely seeing how this is better than gold or silver already.
But come year three, you have paid in $300 total, but your cash value might be $350.
Might be? You mean, it would probably be more like $335? You know, cuz that's a lot closer to 3-5% than $350.
Every year you are also paid a dividend
Oh great! What's a typical dividend yield? I'm dying to know.
if you were willing to wait 3-5 years, you will have at least profited.
In nominal terms, maybe. (3-5%, of course).
My point being, if you are going to use some of your money for long term investments, and some for safe, conservative investments, yet you want access to the money, then cash value life insurance does all of that.
And my point is no, it doesn't. If you consider losing overall purchasing power every year "safe" "investing", fine. But I call it money down the toilet.
Yes, there is an initial "charge" up front.
Oh you mean like a "fee" one might incur when buying gold?
caulds989:If you can live a few years, then you will see all that money back, and the interest you paid to the insurer up front will be paid back to you.
Wow. There's just no downside!
If you die, say in year three, then you have really made a good move with a profit of $99,700.
Yes, dying is such a great move. Very profitable. I'm not sure why more people don't do it.
Again, my motives are irrelevant.
No, they really aren't. It's incredibly relevant why exactly someone is being nice to me or joining conversations or pretending to like the same things I do. If the person is geniunely interested in me, or learning about what I'm talking about, that's one thing. If the person is more interested in selling me something and is simply being nice and "interested" in what I'm talking about so that I might be more willing to buy, that's another.
Your motives for participating in this forum are quite the opposite of irrelevant.
I didn't give the name of my company.
Because if you did, you'd be in breach of contract. You already told us this.
I didn't pitch any particular product (we have many kinds of cash value life insurance),
Now that's irrelevant.
I wonder if it would be considered advertising if someone had responded to my thread saying that he sells gold and silver.
Yes, it would.
caulds989:I didn't even bring it up until you had responded and I mentioned insurance because I wanted to know what you all would think about it as an opportunity vs gold or silver.
Right, you already admitted you were trying to "establish yourself", and I already addressed the fact that this OP full of questions about silver was a bait and switch.
I would be willing to run numbers for you all day and tell you exactly what this stuff could do for you
I'm sure you would, Mr. Insurance Salesman.
you might LEARN something.
Based on what you've shared so far, I think I'd be more likely to be fed a bunch of lies and half truths.
It doesn't mean you have to do it, or even if you did, do it with me or even the company I work for. Jesus, it was a choice I offered. Isn't that one thing we all love about what capitalism is supposed to be, choices? Anyone on this forum is free to contact me or not. I gave info, not a pitch.
I say again. One thing you're definitely not lying about is being a salesman.
I've been on these forums for years. I have never said a word about what i do.
Years? You started your account a year ago.
Never said a word? Perhaps that's because you only started working at the insurance company less than 3 months ago? How do I know that? Oh, because you said a few words about what you do about two months ago.
You are paranoid if you think spending all of that time on here, writing out responses, learning the material, asking questions, would make it worth it for me for the SMALL POTENTIAL that MAYBE someone MIGHT take me up on it.
All that time? You mean all the time it's taken you to write 58 posts in over a year? Yeah I'd say the commissions on life insurance policies are well worth that. If I had no ethical or decorum issues with participating in a forum so as to "establish myself" (with 58 posts over fourteen months) so that I might be able to claim the forum members are my "warm market" and then bait and switch them into a thread by asking about precious metals and then go off into a sales pitch, I might do the same thing.
Then after i talked to one person, that they would follow through with it. Then I have t get an appointment (by law) from your state, fill out the application, for the average amount of money I would make off of it of $600.
...Unless of course you can get me to buy an overfunded policy, right? And then of course we'd have to calculate your trails. And again, we're talking about a forum with thousands of readers every day. And you're "establishing yourself" as one of them...an in-member in a very targeted market.
Yes, again, if I had no sense of decorum, I'd probably do the same thing.
caulds989:If all I wanted was to make money, there would be much more effective ways than joining an online community of a largely with maybe 10 members who are active hourly, and respond to every thread.
Maybe that's why you instead joined an online community that has over a thousand active members and receives 40,000 views a day, and only responded to maybe a dozen or so threads.
Add to that that the austrian school is BY FAR the smallest political philosphy out there,
Another good point...the perfect type of community to try to "establish yourself" in. (As, of course, the smaller the community, the closer-knit it would tend to be, which would imply that if one were to become accepted and recognized in such a community, one would be much more likely to be trusted...and therefore could much more easily sell products to the members.) Not that I'm saying any of this would work here, I'm just saying it makes logical sense.
and it is a group economically and financially sound enough to poke holes in any of my arguments or "advertisments".
You mean kind of like what's going on right now?
If this was my strategy, why wouldn't I go on some larger forum out there, with many more ignorant, gullible people where all I would have to say is "free money" and hordes might come charging.
Because if that's really how it worked, and all you had to do was go to an Internet forum and say "free money" and hordes came charging, there'd be a lot more rich people surfing Internet forums.
What's next? That i only talk to my parents because I want them to buy insurance from me. Think about what you are saying.
You should take your own advise. You're comparing random unknowns on an Internet forum to your own parents...and I should think about what I'm saying?
But your debate performance on this thread is lacking seriously.
How so? My guess is there's no real substance to that and you wouldn't say if if I went easier on you.
You could be an even better asset to liberty is you weren't so damn smug all the time.
Damn shame, ain't it?
Good thing you are knowledgable, I guess. I'm sorry if anybody thought my post was in bad taste. My intentions were meant in the best way possible, but, as I said before, Intentions are irrelevant in almost anything anyway.
And as I said, intentions are quite relevant. I don't know about you, but if someone offers to give some kid a ride to the park in his unmarked van, I'd certainly like to know his intentions.
But hey, maybe I'm wrong. Uncle Harry's intentions with the young boy may very well be completely irrelevant, and knowing them would make absolutely no difference whatsoever in whether I allow that kid to get in that seat. No difference. Harry's intentions: completely irrelevant. My decision to intervene would much more likely be based on something like the quality of the seatbelt buckle and the condition of his tires.
Insurance for hyperinflation thats a good idea. If you're still investing in silver visit this site. I'm sure it can help you.
While youre at it you should also get some skills in silversmithing, then you can mint your own coins and startup a business like that? I think that would be a great idea.
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