Investing, Business, Stocks, Money, Metals, Land
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How much investing have i done? Not much. I have studied and thought a lot about it however which qualifies me to talk about it. Investing and gambling what's the difference? Both are gambling, so one might say risk. However some investing is not much different than placing a bet on the roulette wheel at the casino. In reality we all gamble in this money game to some extent. Even farmers on a self sufficient homestead are not immune to gambling. I don't invest my money at casino's however because I gamble enough in life without them.
I'd say that the average person's investments are wild ass guesses without the scientific part (SWAG) or in that case (WAG). Their returns are a complete gamble and the losses are written off as expenses. I'm talking about daily living. Most people play the money game as if they were at a casino to have a gaming experience. They expect to loose all their money in month to month living. All income comes in and and goes out with nothing remaining. I've spent the last 20 years doing a wonderful job in supporting our economy, but little in supporting my future (with money). Though I have been working to build skills, education and career training as time invested.
Wealth as money isn't easy to obtain. This is because we are all in a friendly competition for it. Income creates wealth, expenses and debt do not. Money is a hard worker. When you look at investing and you see small gains over long periods of time you think its not much. But you didn't have to give up your time and energy to produce the returns. It even worked for you while you were sleeping. Then when we reinvest the interest this creates a compounding situation or snowball effect. It takes time for the snowball to build however so patience is necessary.
Business is where we earn money. Business is income. Even if you work for someone else, then your "Business" is your home or family. In a marriage its a partnership. We haven't seen incorporated families yet but that sounds like something that's coming (pun). I suppose there are incorporated family run businesses. In the past up until about 1900 we had Sole Proprietorships and Partnerships for businesses. Some were called companies. Maybe there were privately traded shares at that time. But after 1900 the stock markets were born which were and are publicly traded shares. Anyone can be a partner if they purchase a share.
What is a stock? When they begin a stock there must be some basis for a price. I'd assume they base it on the equity of the corporation at the time, or what its book net worth is. Finally when the company sells and is liquidated its final net worth would be what the stock value is worth. At any point in between the value of a stock is based on speculation and trading alone. Its value goes up and down and has little to do with the companies actual net worth. It merely represents what the people trading feel it is worth or will be worth. And it reflects the popular opinion of that corporation. Its value reflects the confidence that people hold in the organization. To be honest buying stock literally is not a lot more than placing a bet.
Mutual funds? Someone puts together a list of companies that are proven to be consistently good investments over years. When you invest in the fund you invest equally in all companies in that fund. This minimizes the risk and levels out the ups and downs since all eggs are not in one basket. Mutual funds have averaged around 12% returns over the years beating USA inflation by 8%.
Money acts in a similar way as a stock in that its like stock in a country. Some people play the money investing game, buying up a foreign currency and hoping the exchange rate will change in their favor. Let say you buy 1000 Canadian dollars today and the exchange rate is 1USD = 2 Canadian dollars. You paid $500 USD for $1000 Canadian. Next month something major happens in the world and the exchange rate changes to 1:1. Now you can exchange back to USD and have $1000 USD. You just turned $500 USD into $1000 USD in a month. This scenario is not real but you get the picture. This is an old “stock market” that has been around for a very very long time.
The bad thing about money is that just like stocks it can become worthless. We all play this game because we all use money. The only way to not play it is to well, not use money. There are ways to limit your reliance on the monetary system. This might be called becoming more self-sufficient or self-reliant. There is a lot to talk about on the money subject. Fiat money for example is an imaginary money the government makes and loans. Money can be based on something such as silver and gold, but in our case ours is not as of the great depression in the 1930’s. What is our money based on? Nothing really, its more like stock than gold based money. This means its value is highly susceptible to popular opinions about the money and country and economy itself.
Metals are a worthy investment. Gold and Silver as most of us know were the first money. I noticed after looking on ebay and the net that one may get bullion in quit a few metals that you would not ordinarily think of. Apparently bars and ingots are marked with purity. 99% is 99%, .9 is 99.9%, .99 is 99.99% and .9999 is 99.9999% pure.
In the chart below I show a value for rarity of metals on earth taken from scientific estimates just to give you a frame of reference. For each type of metal we have grams of that metal for every 100 grams of iron. Iron being the most abundant. However most of the Iron is in the core. Aluminum is the most widely available. And these values show gold to be more abundant that silver. However silver is more available than gold and therefore cheaper.
I’m trying to find info on how widely available one metal is vs another. This is difficult to find. I’m sure there are web sites and magazines that report on individual metals sometimes. Especially Gold and Silver. I’m also looking at using price history to get a general comparison value. The precious metals pricing is based on 5 year history. Other metals I found from online sales sites. Take the values with a grain of salt. Though they are helpful in comparing the value of one metal or alloy to another.
|Type||Images||Rarity On Earth||Value per Troy Ounce|
|Gold (Element Precious Metal)||50 Micro||$1240|
|Brass (Alloy 6:4 Copper/Zink)||N/A||$1-$4|
|Bronze (Alloy 9:1 Copper/Tin)||N/A||$7-$13|
|Copper (Element Base Metal)||1.9 Centi||20cents-$2|
|Rhodium (Platinum group Element Precious Metal)||75 Micro||$5500 Most expensive metal|
|Platinum (Element Precious Metal)||600 Micro||$1500|
|Silver (Element Precious Metal)||16 Micro||$30|
|Stainless Steel (Alloy of steel, chromium and nickel)||N/A||$8|
|Titanium (Element Base Metal)||2.5 Deci||$7.5|
|Pewter (Alloy 9:1 Tin/(copper, antimony, bismuth, and sometimes lead or silver)||N/A||$7-$10|
|Chromium (Element Alloy Metal)||1.5 Grams||$25|
|Nickel (Element Base Metal)||6 Grams||70 cents|
|Aluminum (Element Base Metal)||5 Grams||Most Available 7 cents|
|Tin (Element Base Metal)||78 Micro||70 cents|
|Iron (Element Base Metal)||100 Grams||10 cents 2nd Most Available|
|Lead (Element Base Metal)||72 Micro||7 cents|
|Magnesium (Element Minor Metal)||48 Grams||60 cents|
|Zink (Element Alloy Metal)||1.3 Centi||7 cents|
|Indium (Element)||280 Micro||$83|
|Molybdenum (Element Minor Metal)||5.3 Milli||$50|
|Palladium (Platinum group Element Precious Metal)||300 Micro||$500|
|Tantalum (Element)||9 Micro||$61|
|Vanadium (Element Alloy Metal)||3.3 Centi||$57|
|Tungsten(Element Alloy Metal)||52 Micro||$25||Mercury(Element)||52 Micro||$43|
Bullion comes in ingots(thick bars), bars(thin bars), rounds(coins) and even shot(balls or beads) and maybe flakes, pellets or foil. Metal can also be bought in wire, rods, plates, bars, tubes(pipe) etc. and in the case of mercury a liquid. What sets bullion apart from scrap metal and stock metal is that it is supposed to be certified with a given purity between 99% and 99.99999999…%. A good scientific scale will tell you if the bullion is real. Volume might be checked with some type of water displacement method. This is a good start on checking the purity however counterfeit bullion has been produced in the past. The best assurance is in getting it from a reputable source. Bullion has an image and information embossed or engraved on its surface usually. Bullion is usually polished as well. A given bullion will have a given mass per volume. It cost more to make bullion than to make stock metals. This means bullion goes for a much higher price as in 5 to 10 times higher than scrap prices. Bullion should always be traded at bullion prices.
If you are going to keep metals around the house I’d say they need to be kept in a nice heavy gun safe that has been bolted down to a concrete base. I guess it might depend on how much of it you have as to what lengths you go to to protect it. We shouldn’t invest too much in things that rust and that thieves steal as the good biblical spiritual and financial advice goes.
Gold as an investment doesn’t really appear to be that great as it’s gain is about 4% over the years. That’s the same as the US average national inflation rate. Inflation in the USA doubles the cost of living about every 20 years. My grandfather saw the cost of living double, then quadruple then finally 8 times what it was when he was young. Gold and Silver are good indicators for the value of the USD and the economy as a whole. When gold is going up the value of the dollar is going down. Another way to look at precious metals is that they are a much better place to keep your money than a savings account. They might be a way to hold your money’s value in place. Silver I’d say is the better investment for the average person right now.
How about investing in element collections? You can collect elements. Metals are elements, some are alloys. Most of the elemental chart is metals. On the left we have Alkali Metals, and Alkali Earth Metals. The majority in the middle are Transitional Metals. Then on the right side of the middle Ordinary Metals and Metalloids. We have Non Metals, Noble Gasses, Halogens, Lanthanides and Actinides as elements as well. There are over 4000 minerals on earth and counting. Chem Search is a site where you can enter element name and it will list all the minerals that contain that element. All gasses and liquids could be found in solid form as part of a mineral. For example the sandstone beneath your feet is more gas than metal. Yes Silicon is a metal and when combined with 2 parts oxygen forms a grain of sand. So I add the collection of elements and minerals to the metals for investment purposes. Might as well throw in fossils too. Now all we need is a vault.
Land is the single best investment in my opinion. I’m not talking about land with structures either. I don’t believe structures are typically a very good investment myself, though if careful they can be. Land is the one thing that they are not making any more of. As long as you have a stable government that can protect your rights from foreign invasion land is the way to go. Sure there is the forceful taking of your land by government with eminent domain but what are the odds? If you are worried about that then buy land in multiple locations. Have you ever seen any land go down in value? Sure houses do, but the land doesn’t usually. There are some situations where pollution or crime activity could reduce the value of land temporarily. My grandfather bought 100 acres in the Dallas area 20 years ago at $1000 an acre which wasn’t cheap then. He sold it 5 years ago for $5000 an acre earning $400,000 profit on it. That’s $26,000 per year in interest which is an average low income for an individual over that time. That money was a hard worker indeed.
I want to talk a bit about the national deficit from what I understand. This is money loaned to our government. States and cities have deficits as well. They are supposed to repay this with interest same as individuals. One way our national government can handle paying this back is in printing more money. But if they printed one dollar for every dollar in circulation guess what happens? It will soon cost you double for everything making your dollars worth what 50 cents was worth prior to the money printing.
Countries have a couple of ways to handle bad money value situations. One they can revalue as Kuwait did in the 90’s after they got back on their feet from the invasion and gulf war. Internally I’m not sure how the revalue affects things. But what it does is to create a different exchange rate. In Kuwait’s example they went from around 1 USD for over 1000 Dinar to 3USD for 1 Dinar. That’s quit a jump. I think the USA revalued the USD once in our history back in the 1930’s maybe.
Another is to simply create a new money as Mexico did in the early 90’s. When I was in high school the exchange rate for Mexican Peso was about 600 peso to 1 USD. They created a new peso and lately its been around 10 peso to 1 USD. I think when they create a new currency they say the old one may be turned in and replaced with the new. For example lets say the USD gets replaced and they say you can trade in 100 old USD for one new USD. I mean this is something they might do when you are having to spend $100 at a vending machine for a Coke Cola.
In the end invest in things you know about and like. Learn about the things you invest in and don’t trust anyone to manager your money for you but only to handle the business and answer questions. Your property and money are your responsibility.
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