What do you do if an unprecedentedly severe economic disruption means the goods you want to buy aren't available at any price? How can the Permanent Portfolio preserved your wealth?
That is what I mean by "all saving is speculation". Nothing can guarantee the future ability of the economy to produce the goods and services you will want to buy with deferred consumption.
The majority of illnesses in the modern world are both chronic and preventable, so they can be minimized with appropriate lifestyle changes. For the risks that can't be eliminated you can hedge against by having a strong social network.
In the current worldwide fiscal climate the people who are already old are doomed, so there's not much they can do anyway besides speculate and hope. Those who aren't yet old have the opportunity to prepare before they end up in that position.
Topic: Why going all-in is not financially responsible. Capital is your Security. - page 4. (Read 4233 times)
March 11, 2013, 09:29:10 AM
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March 11, 2013, 09:26:38 AM
I think all forms of saving are speculation, and there's nothing with as much upside as Bitcoin.
Then you think wrong. The Permanent Portfolio is not a speculation. It has empirically proven to preserve your purchasing power in different economic climates.
To protect yourself from loss you should invest in your earning potential. Diversify your knowledge, skills, and experience so that no matter what happens in the broader economy you'll be able to earn a living.
And what if you are not able to earn a living due to illness, accident or old age?
March 11, 2013, 09:19:55 AM
I think all forms of saving are speculation, and there's nothing with as much upside as Bitcoin.
To protect yourself from loss you should invest in your earning potential. Diversify your knowledge, skills, and experience so that no matter what happens in the broader economy you'll be able to earn a living.
Learning how to weld is a better investment than buying gold because practical skills allow you to produce wealth, not just trade for it.
To protect yourself from loss you should invest in your earning potential. Diversify your knowledge, skills, and experience so that no matter what happens in the broader economy you'll be able to earn a living.
Learning how to weld is a better investment than buying gold because practical skills allow you to produce wealth, not just trade for it.
sr. member
Activity: 294
Merit: 250
This bull will try to shake you off. Hold tight!
March 11, 2013, 09:19:34 AM
History shows saving in dollars to be foolish since the creation of the federal reserve.
I'll keep dollar cost averaging into sound money, thanks.
I'll keep dollar cost averaging into sound money, thanks.
I agree. I did not advise saving into dollars but in a Permanent Portfolio.
Bitcoin at this point is not sound money. If it works out it will become sound money. Until then it is a speculation.
Hence, you are dollar cost averaging into a speculation.
March 11, 2013, 09:13:56 AM
History shows saving in dollars to be foolish since the creation of the federal reserve.
I'll keep dollar cost averaging into sound money, thanks.
I'll keep dollar cost averaging into sound money, thanks.
sr. member
Activity: 294
Merit: 250
This bull will try to shake you off. Hold tight!
March 11, 2013, 09:10:29 AM
I agree bitcoin is the best speculation ever.
However, your savings, your capital, serves to take care of you when you cannot work anymore. Due to old age, illness or an accident. If you risk it all in bitcoin, even if the chance is only 10% that it fails, this means you have 10% chance to have no savings when you would desperately need them, when you have an accident or when you are old.
We used to live in tribes, where our children and tribe needed to take care of us when we were ill or old. Not much freedom there was in such society. Then capital was invented. People started using special stones, unique shells and later precious metals. These items represented money. In contrast to meat, you could store it for the future, and exchange it in the future for meat. That way you became more independent from your tribe and children and could take care of yourself when you were ill or old.
Today half of society is living as capitalists, saving capital for old age and being independent. The other half are socialist, not really dependent anymore on their children, but for sure very dependent on the tribe (state) to take care of them when they are ill or old.
If you want to be a capitalist that wants to become independent and have capital for old age or illness. This means, you should never risk that capital in speculations. In contrast, you should continually work to build up more savings and protect those savings against any possible economic climate that could destroy them, like the permanent portfolio does.
Sure, you can decide to speculate also, but only with a part of it, and never forget to lock in profits into your 'savings' because if you don't you are not building up any savings but are taking more and more risk and can still end up having nothing when in the end it would fail.
We all need to make money, you can chose to do that via a job, entrepreneurship or speculation. All of them are hard work and come with a lot of risk and uncertainty. Make sure you are building up something that also builds your SECURITY so you can buy meat - always - and will not become dependent on your children or the state!
Am I making sense?
edit: spelling error
However, your savings, your capital, serves to take care of you when you cannot work anymore. Due to old age, illness or an accident. If you risk it all in bitcoin, even if the chance is only 10% that it fails, this means you have 10% chance to have no savings when you would desperately need them, when you have an accident or when you are old.
We used to live in tribes, where our children and tribe needed to take care of us when we were ill or old. Not much freedom there was in such society. Then capital was invented. People started using special stones, unique shells and later precious metals. These items represented money. In contrast to meat, you could store it for the future, and exchange it in the future for meat. That way you became more independent from your tribe and children and could take care of yourself when you were ill or old.
Today half of society is living as capitalists, saving capital for old age and being independent. The other half are socialist, not really dependent anymore on their children, but for sure very dependent on the tribe (state) to take care of them when they are ill or old.
If you want to be a capitalist that wants to become independent and have capital for old age or illness. This means, you should never risk that capital in speculations. In contrast, you should continually work to build up more savings and protect those savings against any possible economic climate that could destroy them, like the permanent portfolio does.
Sure, you can decide to speculate also, but only with a part of it, and never forget to lock in profits into your 'savings' because if you don't you are not building up any savings but are taking more and more risk and can still end up having nothing when in the end it would fail.
We all need to make money, you can chose to do that via a job, entrepreneurship or speculation. All of them are hard work and come with a lot of risk and uncertainty. Make sure you are building up something that also builds your SECURITY so you can buy meat - always - and will not become dependent on your children or the state!
Am I making sense?
edit: spelling error
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