Need some advice about investing

[donnygamble]

As I grow older I find myself focusing more on how I intend to prepare for my retirement. The reality is that Social Security is a fantastic pyramid scheme, even if it is legal because the government has created it. Regardless, I know that if I intend to so more than simply survive, I must prepare for my retirement.

This has left me looking at different investment vehicles such as an IRA or 401(k) in order to prepare for my retirement. I have long believed investing in precious metals and gems to be a powerful investment vehicle. I found on wikipedia at http://en.wikipedia.org/wiki/Self-directed_IRA that it is legal to invest in gold and other precious metals in relation to an IRA. This obviously excites me for a number of reasons.

Typical investment vehicles use the stock market for their investments. The past decade or so has proven that these vehicles depend more on luck than anything. My wife had a nice fund stored in her 401(k) only to lose over half of it in less than a week back in 2008 when everything took a turn for the worst. After discussing things with her adviser we learned it could take more than 10 years just to recover what she lost let alone move forward.

I have no doubt that countless people have been in the same place we were when this happened. After watching the value of gold and other precious metals consistently climb, I decided it was time to find a way to use that momentum to invest for our retirement instead of counting on the stock market or social security.

I was looking for some guidance and advice from people to see what all of you have to say about this. I found some awesome information about investing in precious metals and other awesome information about the legal aspects of an IRA and a 401(k) and precious metals.

But I am obviously very hesitant to just throw money at the wall considering our loss with our 401(k) in the past. Before I make any decisions or place my money in anything, I want to take the time to do my research. So here are some questions I have that hopefully some of you can help me with.

1. Do you have any personal experience with any investment companies and if so, what companies have you worked with that are worth their weight in gold, so to speak.
2. I know that an IRA only allows for a certain amount to be invested every year while a 401(k) is virtually limitless in how much can be placed in the account each year. Do you recommend one vehicle over the other and why?
3. Do you know what the advantages are for investing in one compared to the other in relation to precious metals?
4. What are some of the disadvantages of investing in one compared to the other?

I have done some research and learned a lot, but I really want some advice from people who have walked the walk and talked the talk. I trust most of what I have learned online, but many times it can be challenging to know what and who to trust. I know I can count on those of you here who have actually done it yourselves to share good, useful, and valuable information compared to a website who has the goal of converting me into a sale and a commission.

 

[Penn]

I am out of the stock market. I plan to stay out.

I buy physical silver -gold- and stack- I try to grow my stack each month.

Dont get exited about saving taxes- taxes will never be lower then today.

 

[DSAbug]

IMHO...

You are better off following sinclair's advise and getting out of the system the best you can. That means getting physical certificates of the companies you intend to invest in and have as many of your assets in gold and silver as possible. I think the general market is frothy and the chances of a crash are higher than they were in 07.

As for structuring for taxes, IRAs and Sep IRAs are fine but can easily be confiscated since balances constantly have to be reported to the IRS. If you really want to plan for retirement, I'd put your money in a private business and get your hands dirty. You aren't going to be able to retire off someone else's work. It just doesn't happen.

 

[rblong2us]

My original retirement plan was to own enough property to house 4 families, based on the historic number of a family spending .25 to .33 of its income on somewhere to live.

Im over this now as Im either too soft or tenants are basically failed citizens .......

Anyway, a recent divorce and most property sold had me panicked into gold in September '09, just as we were 'off to the races / the last train had just left / the moonshot' in PM's :flail:

Boy what a ride its been since and being 20% down in $/£ terms is a useful lesson in listening to the collective experts

My instinct has always been to avoid all financial products as the only real beneficaries will be the orgs pimping the products.

Property might hold its own if you think we are in for inflation but interest rates would go up too. Property in a deflationary scenario might not be fun either.
Property that offers an off grid lifestyle would work for me though, as its not just about accruing money for retirement

So as DSABug says, create your own operation working in an environmwent you truly understand and stack any surplus in the form of shiny metals.

 

[DoChenRollingBearing]

@ donnygamble

I am no pro, so take this for what it is worth (not much).

1) Be diversified! I love gold more than the next guy (ah, well, outside of pmbug.com...) and I do think you should buy & hold as much as you are comfortable with. But, I am NOT one to suggest that you go "All Inn" on PMs... I would not go All Inn on anything...

2) I agree that a decent chunk of your long-term assets should be held "outside the system". Physical gold hidden at home, some CA$H also hidden away (deflation could happen), and perhaps other things depending on what you see and what you need (survival preps, etc.).

***

I would talk with several investment pros to find one on your wavelength who is also cautious about the future....

 

[Potemkin]

Right now I wouldn't buy gold, because it doesn't seem to become bullish anytime soon.
I'd go for: silver!

 

[DCFusor]

Neither seems super bullish to me - in fact, gold has beaten the market in the short interval so far in 2014, while silver has gone down for the year. I consider both to be "on sale" - the biggie is, will there be an even better sale soon? Could be.

The usual good advice is to not go all in to anything, but DCA into those things you believe in (or more importantly, the market will believe in when you want to sell). For PMs I'd be strictly in-hand physical at this point. A little now, a little later and so on - so if they become even cheaper, you won't feel bad about it - you'll just get more for the same D in DCA, and do well over the longer haul.

There are good reasons to believe that paper substitutes could fail at some point, perhaps in the not-too-distant future, so I'd stay away from those for anything like the "long game" we are playing here. Those are for short-duration trading at best - and the PM's are not currently in a mode to provide decent profits on short term trades in either direction.

Not all investments need to be in markets. PMs are far from my only "hard" assets. I've been following a plan of changing FRNs into things that last and will improve my life while they do - that's the payback, and "things" are a lot harder to take from you than bucks in some account, where it only takes a cut and paste on someone's computer.

In my case - tools, land (with water, garden, woodlot), buildings (I build my own mostly), books, knowledge (so I am more desired as a guy paid to know stuff and be able to do tricky things), health, and so on - all important parts of any life-plan, and even those are only parts.

For example, I can run my machine shop off my solar panels. Not 24/7, obviously - but enough, and I get the benefit of paid work, and being able to make just about anything I can imagine, versus having to buy it - it's way more than paid for itself. And it's pretty hard to take from me without jailing or killing me, things most governments don't do except as a last resort. Even if the grid goes down - I hardly even notice, and wouldn't know if that didn't result in calls for help from my neighors on-grid. I find that kind of security very pleasing, personally, and I get the payback every day - and every time there isn't a bill in my mailbox for power (which is not since '79).

So my advice, which is maybe worth about what you paid for it - is look at your life from 30,000 feet (at least) and have a plan, some of which should probably be owning some things that others value, as well as things you do. don't buy disposable stuff, don't try to keep up with the Joneses - they've been foreclosed on, they couldn't either. Buy things of quality that last.

My dear old Dad used to say, one reason poor people stay that way is they buy cheap crap.
It either needs frequent replacing or upgrading - and they wind up buying it all over and over, not realizing that getting the right thing in the first place would have been far cheaper. Often they do this due to a serious lack of discipline - not being able to save up money enough for the good stuff...because they spend it all first on cheap stuff they keep having to re-buy as it fails.

 

[mike]

The government plays a role in IRAs and 401Ks, which means you should be just as wary of them as you are social security. What's preventing the government from changing the rules on IRAs? What's preventing them from outright stealing your IRA/401K? They can do whatever they want. They can also make gold possession illegal and ask us us to turn it in, but I have no idea where it is after the boating accident.

 

[DCFusor]

Agree. I've seriously considered pulling my IRA etc out of the system and taking the big tax hit, once, and putting it into things they can't easily reach to confiscate. As I said above, they can take me away from it
(jail) but it's real hard to take it away from me, in some forms. You gotta find it first...They're probably not wanting to get into the car sales or real estate biz, they just want easy cash. Most of my assets weigh a lot and are expensive to move, much less get much money for in an easy sale.

This is somewhat related to the projected exponential increase in "fines" for not joining O'bummer care, which I'll have no part of, willingly.

I haven't yet decided. The tax hit is onerous and certain, while O-care might fail before the bad fines get too high, and I've not run the numbers yet on all the likely cases.

 

[mike]

Yeah, I cashed in my IRA years ago, and I've been urging my brother to do the same. Who knows how long this train wreck will last though? Hopefully we'll all make it with out too much pain.