You should have bought gold ten years ago, but you didn’t and you’re kicking yourself. Well if you have any gold sell it now, cause it’s gonna be gone tomorrow or at least ten years from tomorrow.

With gold setting all-time highs on the stock market, and advertisements screaming for your attention to turn to gold, what is the meat and potatoes behind the concept of gold investing and hedging. I am not an expert on gold, but I am going to point out my conclusions I have drawn about gold and silver.

1. Gold Investing

With gold at an all-time high, why would anyone want to buy it? Well most believe since the price of gold is higher it will go higher, making the investor money. If everyone is buying then naturally the price is driven up. I would be a contrarian investor and sell all the gold I had during these high times. The fact is gold has made all the gains of the modern era in the last decade. We are at a historical high, all it can do is go down. If everyone is doing one thing I’m gonna do the exact opposite.

The fact is the value that gold has, it’s buying power, is the same as it was during the renaissance. That one ounce of gold coin could be you a nice ring or suit just as it can today. There is no special value to the metal itself, the hype begins with inflation fears.

2. Gold Hedging against Inflation

Gold is primarily thought of as a tool to hedge one’s investments. To hedge against inflation means as inflation goes up the price of gold goes up. So one would be losing money because the dollar based investments they own would be going down, the value of gold would be going up.

The Federal Reserve’s interest rates are so low that we may be in a period of deflation, as interest rates are increased eventually along with the printing of money which continues to accommodate the US growing debt, inflation is bound to happen.

When the government keeps passing bills to spend money they don’t have they will do two things. They can raise money by increasing taxes and/or by printing more money which is a tax itself because it creates money and reducing the buying power of the money in our pockets.

With gold already up without inflation officially here, the gold gurus would say put your money in gold, the dollar will be worth nothing, hyperinflation is coming. If gold is high today, will it be higher tomorrow? If everyone gets on the bandwagon the yes the demand will drive it higher. Let me tell you the practical conclusions I have learned from gold hedging and it begins and ends with gold hedging and hoarding in hyperinflation.

3. Gold Hoarding for Hyperinflation

Hyperinflation by most economists is generally described as a inflation that reaches over 50% in one month’s time. This most famously happened to Germany after the collapse of Nazi Germany after World War II when the German money became useless.

People think if hyperinflation occurs they will need something to barter with for bread and water. The problem lies in what is the reference point to determine what a loaf of bread costs. If the dollar is dead, and we based our gold’s worth per ounce on the dollar, how do we determine what the value of our gold is.

I began hoarding silver a while back for future bartering purposes, but after watching a video of a man going into a LA mini mart to buy groceries with silver, he still had to convert it into dollar value. The light went on for me, sell my silver while it is high.

The last thing about hyperinflation is that it will likely never happen, as long as we have the strongest military in the world, our dollar is safe.

Be prepared! This is the official motto for the Boy Scouts, but also is a great motto when applied to personal finance. When you are prepared for any financial situation you are more likely to overcome it. Otherwise you may be placing yourself at risk of going into debt and leaving yourself wide open for further calamities.

Carelessness vs. Preparedness

1. Not having an emergency fund

Prepardness

• Find a little bit of money to save
• Put it away in a low-interest bearing money market account with check writing privileges
• Make it automatic, electronic bank transfer every pay period (you won’t miss it)
• Watch this momentum build as you find more money to contribute towards your “rainy day” fund
• Laugh when it “rains” down a crisis, and you have the cash to fix your disaster
• Start with a set amount to strive for, say $1000
• Shoot for a greater amount to replace your expenses if you happen to lose your job

2. Ignoring routine maintenance on your car

Prepardness

• Change oil/oil filter regularly (Use fully synthetic oil to go 5000-7500 miles/ oil change)
• Clean out air filter or replace once a year
• Keep air in tires and rotate on schedule(The tire shop where you purchased the tires should do this at no charge)
• Understand that the routine maintenance schedule is established by the manufacturer (They are in the parts business)
• Find a trusted mechanic to do the regularly scheduled maintenance at a more opportune time for you and your wallet
• Struts are expensive, but don’t need to be replaced every 50,000 miles, try 75000-85000 miles, it will save you cash
• Keep all receipts with auto maintenance for your records of “how much your car actually costs”
• Budget for car repairs and tires in a separate fund within your checking accounts or use a money envelope

3. Being lazy while at work

Preparedness

• Your job is your highest income stream, protect it
• Time killers at work are usually caused by other employees killing time together
• Be valuable to your employer, when that next layoff happens, they will keep you
• Your job is a gift, not a privilege or a right, treat it as such
• Get plenty of rest and exercise and have balanced nutrition, to keep your mind and body fresh and alert
• Treat others with respect always
• Be positive, when your co-workers are being negative and you refuse to participate, they will take notice

4. Engaging in excessive time on TV, computer, or video games

Preparedness

• Time killers like these inhibit our full money-making and life potential
• They are not fulfilling in the end, they only bring momentary pleasure
• Read books to fill your time, education and knowledge lead to practice (Can translate into moneymakers)
• If you must do this activities, set a timer

5. Not saving for retirement

Preparedness

• Social security with not cover your expenses
• Social security may not exist
• Keep a retirement tripod: 401(k), IRA, taxable investment vehicles(house, business, other securities)
• Save early, save often (It is never too late to start investing, take that first step)
• Make it automatic (Like the emergency fund, you won’t know it is gone and will adjust your living accordingly)

6. Neglecting your family and friends

Preparedness

• Your family and friends are your biggest network and resources, keep in touch
• Tap into their knowledge and experiences
• See things from their point of view
• Ask them for help, that’s what family is all about, support

7. Ignorance of the transcendent

Preparedness

• A relationship with the transcendent will transform you
• When you rely on powers outside yourself, you will be prepared for anything
• Ask, seek, knock- There are promises behind these words
• Stretch your faith, challenge what you believe, know, and trust
• You are not in control, but you are the most precious of all creation

Freedom and security, these two ideas I want in life for myself and my family. I want to have financial security creating a buffer zone between me and debt.

For me, security eliminates worry in my life at least when it comes to things that money can buy. I want my financial security to lead to my financial independence. This security spawns freedom, to work for myself and travel and have fun.

I have a blessed life now, but financial insecurity and the lack of financial freedom inhibits my life’s aspirations. I don’t believe we were created to be held back and kept captive from our dreams. “The pursuit of happiness” as Thomas Jefferson says means our life and liberty are secure but the happiness part is what we pursue.

All our lives, we may be on this pursuit and for many of us this pursuit is happiness in itself. I am happy in my pursuit of security and freedom but I want to be secure. I want to go forward and quit my day job and start my own business with my wife.

How can we accelerate this process of securing our freedom? Here I offer my suggestions…

1. Establish a “buffer zone” in your checking account, so you don’t overdraw, if your paychecks and bills are alternating and unpredictable
2. Start an emergency fund, putting away a little every paycheck automatically deposited into a low interest bearing account with check-writing or electronic bank transfers as the only means to withdraw funds
3. Organize your debts, put all your focus and energy into the smallest credit card balance, pay the minimums on the rest, then rollover that payment amount onto the next largest debt balance (use debt reduction calculator)
4. Pay yourself first, keeping at least 10% of your income for investing, either retirement accounts or personal investing, automatically transfer funds to investment vehicles
5. Keep living expenses the same when you get a pay increase, and be productive with the difference, either raise your 401(k) contributions by 1%/year or consider automatically transferring that pay increase % into a investment vehicle every paycheck
6. Create multiple income streams with skills you already have, turn a hobby into a business, make the income streams passive

Leave me some of your suggestions on what you are doing to accelerate your security!

Life consists of energy. Balancing all the energies that consist of your life can be difficult or it can be easy.

First you have to recognize what energies you use in your own life. Here are examples of what I am talking about.

Work
Exercise
Relationships
Leisure
Spirituality
Money
Time

I limited the list to these 7. Establish this as your life energy family. All 7 of these energies relate, depend, and influence the others.

Work

• usually a predictable time amount
• produces money
• costs physical energy
• relationships are made
• affects the psyche

Exercise

• improves mood
• expends energy
• can be a group social activity
• fun

Relationships

• commitment of time to others
• nourishment of spirit and mind
• brings entertainment and humor
• creates connections and networks for opportunity

Leisure

• relaxation
• uniquely yours
• separation from stresses
• free of cost, optional

Spirituality

• timeless
• weekly occurrence, for some
• social interaction
• important aspect of mental health, for most
• freedom to believe whatever you want

Time

• limited amount per day
• daily activities divided by it
• never enough, thought by most
• compounds money interests

Money

• energy- life revolves around it
• “creates more time”
• the LOVE of money affects people
• end result of work, for many

This list was made for reference when you create a budget of your life energies.

How well are you balancing your family life with your work life. Maybe you could pay someone to do a task for you that would free up time. Use it to take a vacation, spend another hour per week with your sick friend, or just read a book. How great would it be knowing that you could pay someone to do your housecleaning every week and do whatever you want with the time saved!

With a life energy budget you allocate how you are going to spend your life, rather than your money. reevaluate every two weeks just like your money budget. This should be a simple process that lets you analyze and judge yourself to see how you’re functioning. A tool to see your life on how it is, what you’re doing with it, and where you want it to go. You may be able to “buy” time to decrease this and increase that, but our time will be used at the end of the day and with it our energies.

How did you use yours?

Right now I need an increase in the spirituality, exercise, and relationship energies. A decrease in work energy would treat my body better and an increase in money energy is always a goal of mine, whether by interest earned or by knowledge of personal finance.

If you know any good investing strategies that have worked for you and would like to share them,

or need some coaching,

leave me a comment or shoot me an email.

How do you want to live?

Do you want to live your life or let your life control you?

These ideas are the beginnings of sound money management.

Top Ten Ideas of Personal Money Management

1. Pay yourself first
2. Live within your budget. A pay raise stimulates investing not spending
3. Establish starter emergency fund
4. Pay down debt
5. Always pay cash for a car
6. Home buyers warning, leverage BAD, equity GOOD
7. Set goals, Reevaluate, Set goals, Reach Goals
8. Reward yourself
9. Give back, it will always come back to you
10. Reach Higher