CASH, Gold, Silver, Platinum, IRA’s, Stocks, Investments, Banking, and Privacy….from the Prepper Perspective!
Cash, Credit Cards, Debit Cards, IRA’s, Stocks, Banking, Investments, Ughh……we have to know so much about finances these days. Especially when our economy is so affected by the rest of the world. In fact, finances, can get quite confusing, even so confusing at times, we just throw up our hands and stop asking questions and thinking about the important aspects of how we use our hard earned money. Folks, IM sorry, but this is gonna be a long one, but one you all really need to read and memorize if your going to survive the financial mess that has fallen upon us!
Im 41, and my parents are in their 70’s. I can say that things were not that complicated for them during their prime years in life. Back in the 50’s and 60’s, finances were relatively simple. You pretty much paid for everything with the cash you got from your paycheck. Few people had auto loans, and at best, the most debt people had were a small mortgage owed on their house that was surely paid off in their lifetime. They saved money in the bank, and most banks actually paid you interest to keep your money there! I remember even in the 70’s getting 5% on my savings account! These days, life just isnt that simple. Banks, businessmen, brokers, loan officers have all made things look pretty but have found millions of ways to weasel their way into your pocket, and sadly, most people either just dont see it, dont understand it, or just figure “thats the way things are”. Millions of people in this country make a living figuring out ways to get a few more dollars out of your pocket each month. My grandfather tought me at a young age that “you’ll never get ahead by paying interest or borrowing money”. He was right.
Lets face it, we live in a society where just about everyone has debt, and what we’re not paying in some sort of tax, we’re likely paying in some sort of interest! Nor are we rewarded by most institutions for being fiscally responsible! They WANT us to be in debt, because theyre making a fortune on the interest! Some mortgage companies will actually penalize you if you pay off your home early. Many people in this country right now are STRAPPED to paying off high interest on their purchases and loads of taxes, so much so that they cant possibly carry any more. Theyre also keeping very little of the money they actually make. Folks, this has to change. This is why our economy is bordering on collapse, and in the event it does, there a LOT of people in this country who are going to be seriously screwed! Both rich and poor!
My wife is from Russia. She grew up when it was the Soviet Union. Twice in her lifetime, the USSR went bankrupt. If you were a politician, or a banker, or were generally “in the know”, when bankruptcy approached, these people went out and spent all of their money on “things”. The idea was not to get stuck holding onto the “old” money as it became worthless literally overnight. It was like a bad game of “hot potato”. Many Russians became rich overnight, and many went broke. In fact, if you know any Russians, you’ll notice they live financially VERY differant from Americans. Many of them dont believe in saving money after having been screwed twice previously. Many go into debt in the HOPE the government goes bankrupt again so their debt becomes technically worthless. However, thats unlikely to happen again as the USSR is now defunct, and the American Dollar and the Euro are welcomed all over in Russia. In fact, when I was there, I actually found my American money went further then Russian Rubles. Merchants loved it because they thought the US would never go bankrupt. Interestingly, there was a time when I thought we’d never go bankrupt either, but that possibility seems to be looming closer. Imagine the rioting in this country if Obama went on the news tomorrow and told the American public, “the dollar is now worth one 20th of what it was worth yesterday”. Perhaps, this is the real reason our government wishes to “disarm us”. China after all, is thrilled at the thought of Americans being stripped of their 2nd ammendment rights………hmmm…..
As preppers, or survivalists, or patriots, or whatever you choose to call yourself these days, we all share on thing in common….we pride ourselves in being as self sufficient as possible. We prepare for disasters that inevitably come wether they be a tornado, a hurricane, an earth quake, civil unrest (rioting and looting), EMP’s, terrorist attacks, and a myriad of other catastrophe’s. Some people might think we’re a bit crazy, but when the proverbial shite “hits the fan”, we’re the ones that are prepared and can survive, even thrive. So ask yourself, if the economy took a huge dump tomorrow, would you be prepared? I think its safe to say that our debt wouldnt go away. You’d just be paying it back (likely in differant currency) to some place like maybe China (I cringe at the thought), and you might find yourself further in debt then you ever realized you could be. Feel like a slave yet? Keep reading……..
Now that Ive shared with you that background, here is my road map of financial rules to survive economic disaster, and maintain your privacy at the same time.
Rule #1 – Cash is no longer “King”, but its still a Queen with a bad attitude! And we all know who runs the castle!
Its time to go back to using cash if you dont already. You should be purchasing groceries, gas, medecines, all of your daily necessities like lunch coffee and maybe cigarettes, and absolutely make EVERY effort to pay for guns and ammo with cash. Cash talks too. Many small merchants and businesses will give you a cash discount if you ask. A penny saved is a penny earned. Cash also leaves no paper trail. This is why I say purchase any guns or ammo with cash in hand. Youre credit card companies not only keep track of what your spending habbits are but also of everything you buy. Some even send you a nice breakdown at the end of the year of how much money you spent on groceries, gas, etc. Doesnt seem very private, does it? In fact, lets say you just went out to the local gun store and bought yourself a nice new AR15 and 2000 rounds of ammo. Assuming you live in a ‘free state” (unlike NY, NJ or CA) where you dont have to register that gun, no one actually knows who you are or what you bought. But if you paid with your credit card, the bank knows what you bought! And dont think its impossible for one day the bank to share that information with the Federal Government in the even of an assault weapons ban. How about that Obamacare? Did you know if youre a smoker, you stand to pay up to 4500 bucks a year more for health insurance? If youre in the local convenience store buying a pack of cigarettes every day on your credit card or debit card, its kind of hard to deny being a smoker. You could always lie and say you quit a few months ago though if you had been paying cash. See where Im going with this? Avoid the paper trail, USE CASH! For security reasons, if you carry more then $100, keep about $100 in your front pocket as “bait money” in case you get robbed, and keep larger amounts in your shoe!
Rule #2 – Take that damn debit card out of your wallet and cut it up!
You pay cash for most things now. If you have $200 in cash in your pocket, thats all you can spend. You cant see something in a store and be tempted to drain your bank account to buy it. This is important if youre an impulse buyer. If you have $200, and you spend 20 on lunch, you can always go back and count your money realizing you now have $180. You dont have to keep a record of all those damned ATM receipts, and constantly subtract them from your checkbook making your checkbook easier to manage (more on that later). I know people who pay for a $150 cup of coffee with their debit cards, then complain why it costs $1.50. What they dont realize is that the credit and debit card processing companies charge the merchant around fifty cents per debit transaction. You think the convenience store is going to eat fifty cents on a $1 cup of coffee? Of course theyre not! So they raise the price of coffee and we all suffer for it. If you have $100 in your pocket, Its also all anyone can rob from you in the event youre mugged. I have one friend who got robbed at gun point where the guy made my friend drive him to the ATM, and withdraw the max amount of $500.00. Because the guy never got out of the car, the cameras at the bank didnt catch him, and he was never cought. The bank of course never gave my friend his money back either. He was out $500 bucks. Period. Had he not had a debit card and only say $100 on him, he would have never been kidnapped and would have only lost $100. Almost not even worth reporting to the police, right? And one last note about debit cards and ATM cards, is it just me, or does anyone else find it offensive that a bank would charge you a dollar to withdraw YOUR OWN money from a machine? Especially when theyre not giving you any money for keeping it there in the first place!
Rule #3 – Credit Cards are a necessary evil, but can be used to your benefit.
You should hopefully have some good credit cards. Have at least a Mastercard, a Visa, and a Discover. Pay them off every month. Try to get your credit limit high on at least 2 of them. Take those two high credit cards and keep them in a safe place in your home; preferrably locked away in a safe somewhere. These are your emergency cards. Lets face it, things pop up in your life you cant always plan for or afford. Your heating system could go south one day and cost you thousands you may not have to fix, and we all need heat in the winter. What if you had to flee the US one day? Pull those cards out, and rack em up! Worry about paying them back later if ever in that type of scenario! My wife knew a girl from Russia living in PA. She really didnt like it here and had always dreamed of moving to Moscow. She worked hard, had great credit, and loads of credit cards. When she finally had it within her means to move back to Moscow, she racked up all those credit cards somewhere to the tune of over 100 grand. While they are starting to accept credit cards in Russia these days, they never found my wifes friend as she changed her name, and Russia doesnt have SS numbers to track people down by. While I dont endorse stealing, it obviously benefitted her greatly. Having too many credit cards will actually hurt your credit score, so keep it to 3 cards. Avoid American Express as they charge the merchants 3% of the sale as a fee, and they drive up the cost of goods to all of us. Many places dont accept Amex for this reason. Visa and Mastercard are around 1.5%. This does drive up costs, but not as bad as Amex. Keep your smallest credit card in your wallet. Make the smallest credit card the one that gives you the most “points”. Points turn into cash rebate checks and account credits. Use this card as your every day use card for the times when you must use a credit card, and cant use cash. I recently went on a cruise through the Carribean. It was a Carnival ship, and they did NOT accept cash. They issued you a ship card which you had to either roll over onto your normal credit card or pay cash for at the end of the trip. The cruise was all inclusive (or so we thought) except for alcohol, soda, gifts, day care, and “gratuity”; all of which got charged to your ship account. The idea here is to make you spend MORE then you planned on. I hate to admit it, but it works. You quickly lose track of how many drinks you had, or where you had them, or wether or not, all of your friends drinks wound up on your card. We also were not told what “gratuities” would be. They turned out to be around $50 a day for 5 days. I was reasonably frugal about how I used my card, and when I got off the ship, I had a $764 balance waiting for me! I estimated around $550, and I was off over $200! They got me in knowing I couldnt keep track of all my expenses, especially the hidden ones. One couple we know went to Atlantis on Paradise Island in the Bahamas for a week. Same story, no cash, Atlantis Vacation card only; even at the gift shop. At the end of their stay, the bill was over 10 grand! This is a form of predatory lending you dont want to fall victim to. The creditors are banking that you either wont be able to keep track of your money, will get too drunk to remember, and you never realize what little “fees” or gratuities theyre putting on your account without your knowledge, and the truth of the matter is you simply cant keep track. DO use your credit card when you can use it to save yourself some money. Internet shopping tends to be cheaper then local shopping and you can live a better quality of life saving money shopping on the internet. My Tag Heuer in Macy’s is $1800. But it was only $550 on Ebay. Hell of a markup right? However let me throw another bad scenario at you…We all know Mayor Bloomberg in NYC is at war with “soda”. Lets say you lived in NYC, and like most NY’ers, you charge everything you buy….including all of your groceries. What if Mr Bloomberg really went bananas one day and decided to pull the census statistics and audit the credit cards of all parents in NYC to see how much soda they purchased for their families? I wonder what Department of Family Services would do to a family who “they deem” feeds their kids too much soda? Granted, its far fetched, but if I can think up a way to invade your privacy and trample your freedom that easily, so can a vicious politician! Even that scenario isnt as scary as the whole concept of the NDAA! So, tread carefully with your cards!
Rule #4 – Savings and Checking accounts
First off, unless youre getting 3-4% interest on your savings account, (which 99.9% of you are not getting ANY interest), roll it over into your checking account for easier access. In fact, Cash every pay check you get at your bank, and only deposit enough money to pay your bills and keep whatever the minimum balance is to keep a free checking account. Buy yourself a nice safe, like this one from Harbor Freight Tools (which I personally own and can say is a great safe especially for the $$$)http://www.harborfreight.com/
Rule #5 – stocks, bonds and IRA’s
Unless youve got some insider info or are positive about a stock, I say avoid it. The stock market is a bunch of whores just like the banks making money off of “speculation”. If youre going to do it, I reccomend getting in and getting out quickly. Dont leave your money there, there are far better investments then the stock market, and a business that was doing great yesterday can collapse the next day in this economy. In a good economy invest in things people “want”. People like to spend money on things they “want”, not things they need. In a poor economy invest in necessary items, as those wont be skimped on, and will invariably rise in a bad economy. As for IRA’s, well, personally, Id rather have my loot in my safe in the form of something that appreciates with inflation as we all know inflation is inevitable. If you invest say 100 grand in retirement now, that might seem like a lot of money based on what things cost. But in 20 years, 100 grand is likely going to buy half of what it does today. Just ask you relatives what they paid for gas in the 60’s (im puking now) IRA’s actually roll over into my next rule……..
Rule #6 – Gold, Silver, Platinum, Diamonds
The time to buy gold was really 5-10 years ago. If you did, you made a lot of money. But its still not too late to jump into it. When I was 16 I bought my first gold chain. This was back in the 80’s when gold was “in”. I remember I paid $80 for it. That same gold chain is worth about 3-4 times that now. When I was a kid, my aunt tought me how to identify and collect silver coins. Anything before 1964 was silver (except for nickels and pennies). In 1965 when the federal reserve changed coins into whatever it is they are now, and did away with silver, MANy people began hoarding the silver coins. My aunt and grandmother were two of those people. As the 70’s set in, most of the vaule of silver coins more then doubled. Now today, I even heard on the radio, the local silver and gold crook was paying $5 for a silver quarter (and I know he is making money off of that too!). Folks, prescious metals will never go down. They might dip and rise a little from day to day and month to month, but in the course of 10 years, theyre going to double (at least) again as they always have. Is your IRA going to double in 10 years? How about that Sony stock in your portfolio? How about that Bond you bought for your friends kid on their birthday? Youd have dont better to buy them a couple of ounces of silver! Platinum is going to be way higher then gold in 10-20 years as it is extremely difficult to mine, and there are far less platinum reserves then gold reserves. While gold is used a lot in electronics as its a great conductor, Platinum is use a lot in aerospace engineering, and will blow gold away in the long run. Silver is great because its easy to buy small quantities of it at around $33 – 35 an ounce at the moment. These sizes are ideal for trading or bartering in an economic meltdown. Also, some of you may remember what silver and gold certificates from way back when were. At one point, the federal reserve recalled all its gold and silver coins and made it illegal to own silver or gold US currency. They then issued you these silver and gold certificates in their place. These were 1’s, 5’s 10’s 20’s etc that “certified that a deposit had been made in the us treasury”. This was “the gold standard” where all printed money was backed by prescious metals. This is what made the dollar so powerful once………once. God only knows how much printed money we have that is no longer backed by gold. At any rate, during that time, it was “illegal to own gold”. So if any of you choose to invest in gold, silver, or platinum, I strongly advise you to purchase foreign coins and not American ones. If American coins are ever recalled as they were not even 100 years ago, the US govt has no right to recall other nations coins, thus securing your investment. When hyperinflation hits, and Obama tells me he’ll issue gold certificates for my gold, I think I’ll pass! I’ll keep my gold in my safe so I can rebuild my wealth if this country ever does go bankrupt. Moreover, precious metals know no boundaries. You could go to any country in the world and cash in on them. Keep your investment in your safe along with any cash in a sachel ready to go at a moments notice.
Well, I’ll end this here. Thank you all for taking the time to read this, and I hope my knowledge and experiences will benefit all of you in this financial mess we’re all in! Stay well!