Tag Archives: money

I Bonds and TIPS Not Recommended

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I am not recommending the people purchase I Bonds and TIPS anymore. As I continued to study the reason behind inflation and the depth of the corruption of the people who benefit from it, I realized that investing in that system is not a good idea.

My original idea was to hold the government accountable by making them pay me when they print money, but I realized that this is a foolish idea because they also create dollars out of thin air and have no reason to be transparent or honest with me about how things are managed.

I have come to believe that the best way to protect yourself from inflation is to not be a part of the paper currency system at all. That includes not investing in bonds that are delimited in those currencies. That means that I can’t logically justify purchasing and holding I Bonds or TIPS.

Here’s some video clips from a video that helped me see the money world differently.

I am currently using and promoting the purchase of gold and silver to get out of the system that creates inflation and steals our money. I am a member of the United Precious Metals Association (UPMA) that provides solutions that help make it much easer to use gold and silver as money. Here’s one of their videos:

Here’s a good place to get gold and silver

Day 173: An Unusual Illustration of Greed

Jeremiah 43:8-13

Then Yahweh’s word came to Jeremiah in Tahpanhes, saying, “Take great stones in your hand and hide them in mortar in the brick work which is at the entry of Pharaoh’s house in Tahpanhes, in the sight of the men of Judah. Tell them, Yahweh of Armies, the God of Israel, says: ‘Behold, I will send and take Nebuchadnezzar the king of Babylon, my servant, and will set his throne on these stones that I have hidden; and he will spread his royal pavilion over them. He will come, and will strike the land of Egypt; such as are for death will be put to death, and such as are for captivity to captivity, and such as are for the sword to the sword. I will kindle a fire in the houses of the gods of Egypt. He will burn them, and carry them away captive. He will array himself with the land of Egypt, as a shepherd puts on his garment; and he will go out from there in peace. He will also break the pillars of Beth Shemesh that is in the land of Egypt; and he will burn the houses of the gods of Egypt with fire.’ ”

Instead of running to God, the remnant of Judah ran to Egypt. Here we read that Jeremiah was told by God to predict the attack and captivity of Egypt by Nebuchadnezzar, King of Babylon. Once again, God calls Nebuchadnezzar: “my servant.” Let’s consider what has happened here and see if it might apply to us today.

Egypt had been a very strong and large kingdom for a long time. They were definitely larger and stronger than Judah at that time. They had survived many attempts by others to take them over. Wasn’t it logical for a small group of weak people from Judah to seek refuge from a well-situated and strong nation? From an economic perspective, Egypt had more resources too. Wouldn’t it make sense to build yourself up in a place where there were more resources? It would actually go against logic and science to not move to Egypt for a while. I say this because I want to illustrate the limits of science. Just because things have always been a certain way, doesn’t mean that they will continue to be that way in the future. The only basis on which science is allowed to continue to be a guide, is when God indicates that things will continue in the future as they have in the past. In this case, God clearly indicated that the future would be very unlike the past. The times were changing. Babylon was going to take everything over, including Egypt, and the remnant of Judah would have been better off living in the place that they had been assigned by Babylon.

I believe that the Bible indicates that, in this world, our desire to go against God’s guidance is fueled by our desire for money. We begin to trust in our ability to get and keep money instead of believing in the clear words of God. Here’s what we are told in the New Testament:

1 Timothy 6:10

For the love of money is a root of all kinds of evil. Some have been led astray from the faith in their greed, and have pierced themselves through with many sorrows.

Was the remnant of Judah being greedy? They were destitute and in great need. Their cities had been wiped out. They were refugees weren’t they? Perhaps from a worldly perspective they were merely in need, but God had clearly told them what they were supposed to do. I believe that in their own greed for gain, even as poor refugees, they disobeyed God and put themselves into horrible danger. They would now have to see the same destruction that destroyed their own country happen again in Egypt. They “pierced themselves through with many sorrows.” The road to greed doesn’t depend on how rich you are. It only depends on whether you choose money instead of God and that appears to be what the people did.

Stressed about Savings? Divide and Conquer!

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Piggy Banks

JamesCube (Pixabay)

Trying to decide what to do with the money you have can be stressful.  There are plenty of people willing to “help” you invest your money, but they rarely agree on how.  Just leaving it the bank doesn’t seem right, but neither does losing it all in the market.  I have found that dividing my money into two parts reduces the stress and gives me confidence.

Protection vs. Opportunity

There are two very different points-of-view when it comes to investing money.  It’s possible to look at money as something to protect for some point in the future.  It is also possible to look at it as an opportunity for gain.  Both perspectives have benefits, but they require that we invest in different ways.

When we look at money from a protection point of view, we want to make sure that we don’t lose it.  Our concern is not about future gains, but about having something at a specific time.

When we look at money from an opportunity point of view, we are willing to wait in order to get a big gain.  We’re hoping to use money in order to get significantly more, but we can’t really control the timing of it.

These two points of view, are at odds with one another.  Like the old saying goes, you can’t have your cake and eat it too.  We can’t protect something and risk it at the same time.  When we choose opportunity, we also choose to risk not having our money at a specific point in time.

Many of the professionals in the financial world are more focused on opportunity than they are on protection.  It’s good to keep that in mind when you seek help.  If your intention is to protect, you probably won’t need professional help.  With a little education, you should do just fine on your own.

Insurance vs. Investments

Those who intend to preserve their money are better off thinking about it like they would insurance.  That’s because when you preserve, you are saving what you’ve already earned.   You’re just making sure that it’s there for you when you need it.  A preservation mentality is helpful when you are saving for specific things.  Those things might include maintaining or buying a car.  Other things include buying a house, paying for college or for paying for retirement.  Preservation is good for those things that you already know that you will probably need.

When you want to use your money to take advantage of growth opportunities, insurance doesn’t really make sense.  That’s because you’ve accepted the risk that your money won’t necessarily be there at a specific point in time.

Promise vs. Potential

When we make a decision about where we put our money, we need to decide whether we care more about having a promise that our money will be available, or that we have the potential to gain when opportunity arises.

These kinds of financial arrangements are at odds with each other but they both have their place.  If there was no potential for gain, there wouldn’t be a way to have something to preserve.  If there was no place to save your money, how could you keep what you have gained for a time that you need it?

Determine Your Timing Related Risk Capacity

When I say “timing related risk,” I mean the kind of risk you expose yourself to by not having money when you need to use it.  Considering your timing related risk capacity is a good way to decide whether you should preserve or speculate.

source: nattanan23 (Pixabay)

If you don’t have any savings at all, then you are at risk whenever something doesn’t go right.  You really don’t have any capacity for timing risk.  If you have no extra money and your car’s transmission fails, you would immediately be in financial trouble.  It’s important to have emergency savings and not having it definitely qualifies a timing related risk.

There are other timing related risks you may have.  Retirement is an important one.  You can calculate the amount of time that remains before you plan to retire and the amount of money you might need for the rest of your life from that point.  These projections expose a risk.  If your retirement money isn’t there when you need it, you will probably suffer.  Other things have timing related risk too, like buying a house, paying for college or paying for family vacations.

When we think about risk, we need to consider what we would feel like if our money wasn’t there when we need it.  If the money you are thinking about isn’t going to be needed for a particular time in the future, then opportunity investing is probably a good idea for you.  If you know what the money is intended for, then preservation investing would probably be a better idea.

A Helpful Separation

I have found it helpful to separate my money into two distinct parts.  One is the part I intend to preserve as savings.  That part includes my emergency savings, the part of my retirement savings that would pay for my basic retirement needs and any other amount of money that I would rather preserve than take risks with.  These may include funds I intend to use as an inheritance or a donation.

The other part is for investments that I believe will eventually be profitable.  For these investments, I accept that I don’t know when they will be profitable and I am willing wait.

Less Stress

By taking your savings and setting it aside as something you intend to preserve, you don’t have to worry about how much money it makes.  As long as it keeps up with inflation, it will still be there for you.  The rest you can use to do some investing.  That’s the part you may want to have an investment professional help you with.  If things don’t go quite as well you expected them to go, you can rest assured that your savings is still intact.

The Effects of Inflation

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Hamburger with fire background

Meditations (Pixabay)

Whether intended or not, one of the bad effects of a government-regulated monetary system, is that it creates a disconnect between money and the real things we need to buy.  Take food for instance. If we were use hamburger gift certificates instead of the money we use today, we would know that we would get the same amount of food for our money today as we would after leaving the certificates in a box for 10 years.  Somehow, we’ve managed to mess up our monetary system such that it is significantly more difficult to depend on it for real needs… like eating or clothing ourselves.

Let’s consider the effects of inflation using terms that we can actually eat.  Let’s assume that you had put a 10 hamburger certificate under your mattress in the year 2000, only let’s also assume that someone has allowed inflation to eat your hamburgers without your permission over time.  How many hamburgers do you think you would be able to buy today with an inflation adjusted 10 hamburger certificate?  By 2017, your 10 hamburger certificate would only buy you about 5.68 hamburgers.  This is quite typical, inflation is usually eating away at our savings.  There’s a website that makes it easy for you to see how the costs of things have changed over time as a result of inflation.  It provides a calculator that allows you to enter your own dates and amounts and see the effect for yourself using the government inflation data.

Try it at:  US Inflation Calculator

The problem is that once money is disconnected from something real, it can change in value quietly over time.  For much of the United States’ history, our money has been buying less and less over time.  There were periods in which inflation went backwards.  Yes, that’s called deflation.  That might sound good at first, but those times are often harmful as well.  One of the most notable times that this happened in our history was the Great Depression.  If deflation is happening to money, it’s likely that it’s because people don’t have jobs or money to pay for things they need.

Whether our problem is inflation or deflation, disconnecting money from something that is real is not a very good savings plan.  In order to plan, you kind of need to know how many hamburgers you will get to eat, shoes you will get to buy or tanks of gas you will be able to fill.  Thankfully, there are still some tools at our disposal that can help us combat the effects of inflation like I Bonds and TIPS.  They’re not quite as easy as putting money under your mattress, but at least they are available.