(A reminder.....I'm a pilot, not a professional financial advisor.
Do your homework and make your own decisions.)
Big news on financial programs last week:
For the first time since "The Great Depression",
the U.S. population had a NEGATIVE savings rate.
Wow, that's terrible news, isn't it?
Surely we are on the verge of economic collapse!
Well, maybe not.
I'm more worried about current political issues than what I consider some egghead's incorrect definition of savings.
How much money did you put into passbook savings accounts last year?
How 'bout a Certificate of Deposit......
most of which earn about 1% right now.
I'm sure you invested a potload in those, didn't ya?
And that is the definition of "savings" economists are using as their yardstick:
Passbook savings, Christmas savings accounts, Certificates of Deposit......
none of those even keep up with inflation, so virtually no one is using them as an investment vehicle.
Since I have had access to one, I have participated fully in my 403b or 401k plan at work. That means a good chunk of my salary goes into a variety of Mutual Funds, and my employer matches a certain percentage on top of that.
Obviously, I'm hopeful those investments will pay dividends in the future.
But none of that is counted as "Savings"in this definition.
Got an I.R.A.?
Nein, negative, nosirree.......that's not "savings".
I'm beginning to think my "virtual/adopted" son
Infinitegtr may have the right idea about putting a portion of your money in assets you can hold in your hand, or bite to check for authenticity.........
I'm talking Gold, dear readers.
(Silver or platinum can also be considered, but take the term "hold in your hand" literally.)
I've been accused before of being alarmist. But I have always subscribed to the adage:
"Hope for the best, plan for the worst."
That way, you have most situations covered.
We are looking at ugly situations in at least two spots on the globe:
Iran and Korea.
Hugo Chavez of Venezuela is also flexing his muscles, currying favor with China, Iran, and Cuba.
If we turn Iran or Korea into a glowing wasteland,
or if Iran or Venezuela shut down their oil contribution to the Western world,
or China decides shocking our economy is more important than serving their #1 market..........
a handful of gold coins will serve you better than a wheelbarrow full of greenbacks.
And the great thing is, even if I am wrong, wrong, wrong about all this,
the coins will always have some value.
I hope that you, like me, have been participating in the current market upswing.
If so, don't be too worried hearing all the screaming about "negative savings"........
That comes from using a strange definition.
But you have probably experienced an increase in portfolio value over the last year.
It might be a good time to take a look at your portfolio and consider covering your "worst case" scenario.