Financial Apathy

[ozarkeagle]

What part of doomed don't you understand?
Forget optimism, I only deal in reality.

[Medieval Man]

Originally Posted by Mr Nice Guy

I see what you are saying. What I was addressing in the OP was i've noticed a lot of people posting news about how the economy is screwed up this way and that way, and other posts like "should I max out my credit card buying preps?" ARE YOU KIDDING ME?

Well im still young and have a lot to learn about finances and the economy. I do know, the more you understand money, and how it works, the more of it you will get. Im not going to lie, I would like more money. I bet everyone would to. Thats what im going for here, just lookin for some sound advice, not some "SHTF Financial Advisor" who's net value is 1000 cases of shrimp ramen noodles.

If you havent already seen the personal financial pyramid, here it is. There a few different varieties of the pyramid, but same concept. This is one piece of good advice I can contribute. Use it to see where you are at, and where you want to be. You should ideally have a stable bottom, not too top heavy. But hey, the world is yours, rock with it

Interesting that you display the pyramid.

I agree with you with some of your points. It would be pretty short sighted at this point to max out your credit cards; likewise, at your age you are able to take a much longer view in investing rather than some of us, especially those of us in our 50s.

On the other hand, take a closer look at your pyramid:

Examine the bottom two rows: Savings for emergencies/opportunities, and Prtotection against loss.

Those of us with a world view that encompasses history as well as possess a realistic view of a society in crisis simply add a couple of bricks to the bottom rows.

For savings/opportunity, we might diversify with PMs, for example, to help preserve our wealth in case of excessive inflation.

For protection against loss, we add a bit to our life insurance, except we call it living insurance. Studying the famines in the past 100 years, being aware of how modern socieites have suffered economic collapse, and realizing the U.S. is not immune to this sort of thing, we also invest (as a form of living insurance) in tangible food stocks as well as other items and means that allow us to make it through tough times.

Interestingly, I really don't spend much more on prepping than I do on life and auto insurance each year...

[haha49]

Hehe I don't mind the sky is falling as long as I can get in on it when it hits the bottom then it can only go up

[FranchiseKid]

That pyramid is based on a system that does not work. That is one of the first concepts of "money" that many need to understand. But they start beyond those simple fundamentals which is the reason so few truly understand this current situation. That entire pyramid is based on a monetary system that has failed now, and throughout history. By definition almost everything in that pyramid will fail or be useless. Look at the simple denomination of all of those "assets" in the pyramid... fiat currency. A mutual fund is worthless unless you can convert those shares into....... fiat currency. If that fiat currency is worthless... so to is your mutual fund.

[Crackshot]

I have a problem with your Pyramid. Having been trained in Insurance I can tell you that insurance is generally a bad deal. Its a hedge not an investment since in most cases you never see a return.

[HowardRoark]

I remember having that pyramid placed in front of me the first time I met with an investment advisor. He used it to show me all the products he advised me to buy.... that he sold. It is a sales tool.

[corndogggy]

Originally Posted by Randall Flagg

age: 22
clue: none

I suppose Winston Churchill was clueless as well. .



"A pessimist sees the difficulty in every opportunity.
An optimist sees the opportunity in every difficulty."
-- Winston Churchill

[Steverino]

1. Gain a reasonable understanding of economics

2. Use that understanding with a dose of skepticism to "read" the market news (hint: its always in their best interest to say things are improving or good)

3. Decide for yourself what is happening. Do not believe what you are told.


Here's some economic reality, I took todays BEA GDP report, reformatted it so its more readable and added "change from previous Quarter column)

LOOK AT THE RATE OF CHANGE...

Focus on the PCE number as that is number indicative of consumer spending... i.e. - confidence...

[Mr Nice Guy]

Originally Posted by HowardRoark

I remember having that pyramid placed in front of me the first time I met with an investment advisor. He used it to show me all the products I need that he sold. It is a sales tool.

That pyramid lacks the precious metals section, which would fall into the higher echelon. Survivalists love gold. Recently, the value of gold has dropped. Surely it will rise, but i show the pyramid to maybe help others understand there are better ways to invest NOW, than when "TSHTF."

Im about surviving in THIS era, not SOME (see preparedness section for a million and one scenarios) SHTF era. Took me awhile to realize whats more important. Lets be realistic, chicks dig dudes with large quantities of liquid moo-lah, not large quantities of 230 gr .45 FMJs. Can there be a balance? sure. Do I see a lot of people preaching having a balance here, no. I guess I answered my own questions.

Try living life for a week not being scared of every event, and thinking every person is going to rob you when you go to the grocery store packing 5 full magazines and a MBR in your trunk. Takes a lot of weight off the old shoulders. Keep the sixth sense though. Take care guys God bless

[WSierra]

Ahhhh... to be 22 years old again, and know everything... about everything.
but alas, at 60.. I've seen and experienced too much to have retained such wisdom.
I seemed to have lost my innocence at 20. Overseas. Pessimistic.. No. Realistic.. yeah.
"Visualize whirled peas"
I don't know if the sky will fall, but there will storms and drought. Always have been.

Best wishes, Mr Nice Guy. I really do mean that. I'm hoping/praying for the best too.

;-)

[Steverino]

Originally Posted by Mr Nice Guy

That pyramid lacks the precious metals section, which would fall into the higher echelon. Survivalists love gold. Recently, the value of gold has dropped. Surely it will rise, but i show the pyramid to maybe help others understand there are better ways to invest NOW, than when "TSHTF."

Im about surviving in THIS era, not SOME (see preparedness section for a million and one scenarios) SHTF era. Took me awhile to realize whats more important. Lets be realistic, chicks dig dudes with large quantities of liquid moo-lah, not large quantities of 230 gr .45 FMJs. Can there be a balance? sure. Do I see a lot of people preaching having a balance here, no. I guess I answered my own questions.

Try living life for a week not being scared of every event, and thinking every person is going to rob you when you go to the grocery store packing 5 full magazines and a MBR in your trunk. Takes a lot of weight off the old shoulders. Keep the sixth sense though. Take care guys God bless

IMHO yer paying way too much attention to the hype.. and way to little attention to the facts...

But... that's exactly how I was at 22...

As I said earlier:


1. Gain a reasonable understanding of economics

2. Use that understanding with a dose of skepticism to "read" the market news (hint: its always in their best interest to say things are improving or good)

3. Decide for yourself what is happening. Do not believe what you are told.

Literally everything in our society happens as a consequence of what does, or does not happen in the economy... learn to read those "tea leaves" and make up your own mind... (Once you have children you'll learn that the one thing you want for them most is that they learn to think for themselves...)

You appear to have made your choice... now you just have to live with the consequences... Best of luck to ya

[FranchiseKid]

Originally Posted by Mr Nice Guy

That pyramid lacks the precious metals section, which would fall into the higher echelon. Survivalists love gold. Recently, the value of gold has dropped. Surely it will rise, but i show the pyramid to maybe help others understand there are better ways to invest NOW, than when "TSHTF."

Im about surviving in THIS era, not SOME (see preparedness section for a million and one scenarios) SHTF era. Took me awhile to realize whats more important. Lets be realistic, chicks dig dudes with large quantities of liquid moo-lah, not large quantities of 230 gr .45 FMJs. Can there be a balance? sure. Do I see a lot of people preaching having a balance here, no. I guess I answered my own questions.

Try living life for a week not being scared of every event, and thinking every person is going to rob you when you go to the grocery store packing 5 full magazines and a MBR in your trunk. Takes a lot of weight off the old shoulders. Keep the sixth sense though. Take care guys God bless

"Recently the value of gold has dropped".... what is "recently", "value", and "dropped". As you will learn in your studies, those are all very relative terms that mean different things to different people. Remember, gold demands bids for dollars, not the other way around. If you do not understand that sentence, I would encourage you to keep researching and learning. There is a wild world out there, one that is shaping how you think at 22.... and this can be best seen in your next paragraph regarding "surviving in THIS era".... that is the same thing real estate speculators said as they bought up condos in 2007 and top ticked the market. How are they surviving now?

It appears that the knowledge you have garnered thus far is very, very surface level. Which is OKAY, seriously, that is not a shot at all. You have to start somewhere. But the point is, do not stop where you start. If you think you are the only one out there that has this mentality, realize you do not. You are part of the herd. Part of the very same psychological investor class that bought into condos. Think about, 99% of that chart you put up derives its real (not nominal) value from the rate of inflation. Most investors are all mixed up thinking cap. gains are a birthrite. They are not. Keep up the studies from all viewpoints and do not simply dismiss the "survivalist mentality" as an outlier. What you will find is that many of "us" have walked the path you have. Everyone needs to walk their own path though because experience trumps almost everything, and it is far better to "know" risk, than "study" it.

Again, you make the statement about people walking around scared of the next event... how about all those walking around scared of the next paycheck because their life savings is gone due to current market conditions? If you do not see people preaching balance here, you are not looking hard enough. You will find many of us here are the most laid back individuals with some of the higher level of peace of mind. If you think that peace of mind comes from a mutual fund, that declares outperformance as only going down 40% when the S&P was down 45%, you are wrong.

It comes from not needing the system to cut the path for us. Your pyramid makes you a slave to the system, it does not free you from it, as many would have you think.

[aramchek]

Well, it appears that the pyramid is based on things that try to out-pace inflation at rates higher/lower to other things (investments and how they measure up to one another).

I note that it leaves out my own favorite investments -- antiques, rare books, collectibles, vintage clothing, military memorabilia and other physical commodities (I'm not including PM's here). The value here is based on luck at finding something, a good day at the auction, more knowledge than other bidders (and the seller himself), the inherent scarcity/uniqueness of the item, whether something is currently "in", finding the right buyer when you want to unload it, etc.

That's why I chuckle when I look at the whole Ponzi system the econo-speak people put together. The whole thing is fiat-based, funny money, speculation, debt=money, big shell game. It's worse, though. Their analytical system or framework only works within that illusory realm. So we're left with an imperfect language. Trying to use their terminology outside of their system doesn't make much sense. "Aggregate money supply". If their system is B.S., even their terminology may be relatively useless outside of that epistemology. We live in uncertain times, to be sure.

Originally Posted by FranchiseKid

That pyramid is based on a system that does not work. That is one of the first concepts of "money" that many need to understand. But they start beyond those simple fundamentals which is the reason so few truly understand this current situation. That entire pyramid is based on a monetary system that has failed now, and throughout history. By definition almost everything in that pyramid will fail or be useless. Look at the simple denomination of all of those "assets" in the pyramid... fiat currency. A mutual fund is worthless unless you can convert those shares into....... fiat currency. If that fiat currency is worthless... so to is your mutual fund.

[Randall Flagg]

Originally Posted by corndogggy

I suppose Winston Churchill was clueless as well. .



"A pessimist sees the difficulty in every opportunity.
An optimist sees the opportunity in every difficulty."
-- Winston Churchill

Right, i see your point, mr. nice guy is the next winston churchhill

The problem with mr nice guy is that he comes here not to learn, but for confirmation of what he "thinks" he already knows.

http://youarenotsosmart.com/2010/06/...irmation-bias/

but fret not, 99.9% of the worlds population live life just like he does.You see, many men/women are smart, very few are intelligent.

The difference being that only a person with no belief system or preconcieved notion on any given subject can understand and learn from new research on any topic, the other 99% just look for info that backs up what they already "know".

and since we are closing with quotes, i'll leave you with one of my favorites.


Mark Twain said:

It ain’t what you don’t know that gets you into trouble.
It’s what you know for sure that just ain’t so.

[Deadmeat99]

Originally Posted by FranchiseKid

Remember, gold demands bids for dollars, not the other way around. If you do not understand that sentence, I would encourage you to keep researching and learning.

Can we just cut to the chase and post the info for this instead of treating it like some secret Jedi knowledge?

Red Alert: Gold Backwardation!!!

[FranchiseKid]

Originally Posted by Deadmeat99

Can we just cut to the chase and post the info for this instead of treating it like some secret Jedi knowledge?

Red Alert: Gold Backwardation!!!

It's been discussed and I posted it in another thread already... the chase has been cut.