CAN YOUR RETIREMENT
SURVIVE?
A No Nonsense Guide To
Protecting Your Wealth In Retirement
B EN ST EI N
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There are many different forms of happiness in this life–love, health, good looks,
friendship, knowledge–and they are all fine things to have. But none of these
great assets will be possible to enjoy unless you have the highest form of wealth,
namely, peace of mind.
No amount of romance or fitness, or even fame, compares with having a
peaceful, calm heart and soul.
There are many ways to get to that happy state: faith in a higher power, a loving
family and/or friends, and living in a free country under law are just some of
them.
But none of them would mean a serene, peaceful heart if you were worried
about having enough financial security to put food on the table, have a roof over
your head, keep your home cool in the summer and heated in the winter, and
to know you can pay for your car, your insurance and your gasoline, and any
reasonable unforeseen expenses.
“In other words, financial security is not just another nice
thing in life: it’s the platform upon which every other form
of happiness rests.”
But How Do You Get Financial Security?
In these times, most especially in these COVID times, financial security seems
like a mirage, an unattainable mountaintop silhouetted against the horizon that
you cannot ever reach, and that recedes every time you get close to it. You start
to save in one asset and it seems like suddenly it gets hit by a plague.
For example, you invest in a great, well-managed airline and a world-class hotel
chain. They’re doing well and you’re getting a steady flow of capital growth and
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even some dividends. Then, Wham!, along comes the pandemic and your airline
and hotel chain are on the verge of bankruptcy and maybe tipping over that
horrendous edge.
The value of those investments plummets and all of the work you did and
sacrifices you made to buy them are largely or maybe entirely for naught.
Or maybe you get a magazine that recommends a certain biotech company,
“certain” to be the world leader in getting approval for an anti-plague vaccine.
The stock skyrockets. Then a clerk at the FDA notes some anomalies in the tests
for that drug and approval is withdrawn, and the FDA cautions that people have
died taking early versions of the drug. Then, the price plunges.
Or, you buy a duplex and look forward to a steady stream of rentals. Then, there
is a riot and severe looting one block away and you cannot get tenants for love
or money. Life is full of uncertainty.
“Even in a prosperous free society like ours, there is
serious uncertainty about almost everything material.”
The examples I just gave do not even reflect serious nationwide crises like
hyperinflation or depression, not to mention war. Mississippi was one of the
richest states in the USA in 1850. When The War Between The States ended, it
was the poorest and still, 155 years later, it is one of the poorest (although it is a
beautiful state with many wonderful people).
How Then Can You Get To Financial Security?
First, you need a readily marketable skill. It’s not enough to be smart or witty
or good looking. You have to know something, know how to do something,
for which there will always be a high demand. Medicine and dentistry come to
mind immediately, but in today’s world, there is also an extreme shortage of
plumbers, carpenters, and electricians. Their hourly pay shows it. (Think back to
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your most recent electrician’s bill and how stunned you were when you looked
at it.)
Then, you have to develop good habits of work. That means suit up and show
up and do your job without aggravating people and thereby causing “negative
utility” as we economists call it.
And you have to save. You have to save a lot.
Warren Buffett, a long-time friend and one of the five or ten richest men in the
world, always says that it’s wrong to say that you must spend frugally and then
save what’s left.
“Warren Buffet has always said ‘Don’t save what is left
after spending; spend what is left after saving.’”
That is, your first priority should be to save at a rate which, compounded at a
historically reasonable rate of growth, will give you enough savings to live off
in retirement, allowing for the usual possibilities of calamity (or even for the
UNUSUAL possibilities of calamity).
“But how do you do that, considering all of the uncertainty we just talked about?
What do you invest in? There is a surprisingly simple answer: EVERYTHING.”
You invest in stocks, especially highly diversified portfolios of all of the largest,
most historically successful companies. You can get that by buying what are
called “index funds”.
You invest in interest-bearing instruments such as bonds that pay a set amount,
usually called a “coupon,” every quarter or every six months. The most sensible
way to do this, just in my humble opinion, is to buy US Treasury bonds.
These are backed by the “full faith and credit” of the US government, the
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most stable government of a large country in the world.
(A caution here: the US government is running such immense deficits and
building up such an immense national debt that a Treasury default in the future
cannot now be considered unimaginable, as it would have been ten years ago.)
“You can buy real estate. As we say, the Lord is not making
any more of it. Over very long periods of time, it tends to
do better than inflation.”
You can buy collectibles, like stamps or antiques. They tend to keep up with
inflation, and, if carefully chosen, can be wildly successful as investments. They
can also be beautiful to look at.
And in what could be argued as being one of the most underutilized investment
assets, you can buy precious metals, like gold or silver,
Not only do gold & silver have tremendous value due to their industrial uses
(gold is extremely widely used in electronics) but they also have an impressive
ability to be used as a store of wealth and protection against market volatility,
dollar devaluation, and inflation.
For a very long time, the price of gold was fixed by the federal government and
private citizens were not allowed to hold gold. The silver price was fixed too.
That was drastically changed in 1971 by President Nixon, when he took us “...
off the gold standard...”, and allowed the price of gold to fluctuate according to
supply and demand.
“Gold has been a great investment ever since then with
more than a 4,500% increase in value!”
There is an allure to gold which has existed since we know about mankind and
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shows no signs of disappearing.
The same can be said of gold’s sister metal, silver.
“Silver has had explosive gains in value as well, increasing
more than 1,660%!”
There are also spectacularly speculative instruments such as “bitcoins,” which
are a digital currency whose value is computed without regard to government
control and which also have impressive value gains as stores of value and as
a means of payment. Some extremely smart people swear by them and some
swear at them.
The key is having a variety of different kinds of assets.
Historically, this form of investment offers far more stability in price than one
type of asset alone or even two or three, with excellent capital gains.
“Diversity in savings and investment is not just interesting.
It can help with that greatest of earthly rewards: peace of
mind.”
(855) 754-4226 www.goldco.com
There is no assurance that precious metals will achieve their objectives. Return and principal value will fluc-
tuate and your portfolio, when redeemed, may be worth more or less than the original cost. You should never
invest more than you can afford to lose. No statement, presentation, article, or any other communication is to be
construed as a recommendation to purchase or sell a security, or to provide investment, legal, accounting or tax
advice. Customers should consult a financial advisor, attorney or accountant for investment, tax or legal advice.
Customers should carefully read all documents provided, including invoices and agreements, before making pur-
chases. Informational content may contain errors. Precious metals involve risk and are not suitable for everyone.
Endnotes
