Author Topic: Financial Prepping  (Read 2773 times)

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Online TXAZ

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Re: Financial Prepping
« Reply #21 on: October 18, 2017, 09:19:12 PM »
The IRS says otherwise.
https://www.irs.gov/newsroom/irs-announces-2017-pension-plan-limitations-401k-contribution-limit-remains-unchanged-at-18000-for-2017

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits
Technically by the 'literal' interpretation you're correct.  Practically it's not.  There is a backdoor that yields the same result, "Carried Interest" and buying shares in a privately held company for pennies on the dollar that are realized in a year for a dollar per share.

Maybe that's why Mitt Romney and many others have IRA's that are worth over $100M each by setting up and investing like that.
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Offline JohnnyDollar

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Re: Financial Prepping
« Reply #22 on: October 18, 2017, 09:24:13 PM »
The IRS says otherwise.
https://www.irs.gov/newsroom/irs-announces-2017-pension-plan-limitations-401k-contribution-limit-remains-unchanged-at-18000-for-2017

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits
Technically by the 'literal' interpretation you're correct.  Practically it's not.  There is a backdoor that yields the same result, "Carried Interest" and buying shares in a privately held company for pennies on the dollar that are realized in a year for a dollar per share.

Maybe that's why Mitt Romney and many others have IRA's that are worth over $100M each by setting up and investing like that.
Well, rich people usually have tax lawyers to help them get around things.....   
at least till the IRS takes an interest in them.

Online TXAZ

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Re: Financial Prepping
« Reply #23 on: October 18, 2017, 09:45:08 PM »
The IRS says otherwise.
https://www.irs.gov/newsroom/irs-announces-2017-pension-plan-limitations-401k-contribution-limit-remains-unchanged-at-18000-for-2017

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits
Technically by the 'literal' interpretation you're correct.  Practically it's not.  There is a backdoor that yields the same result, "Carried Interest" and buying shares in a privately held company for pennies on the dollar that are realized in a year for a dollar per share.

Maybe that's why Mitt Romney and many others have IRA's that are worth over $100M each by setting up and investing like that.
Well, rich people usually have tax lawyers to help them get around things.....   
at least till the IRS takes an interest in them.

We set up a company for my wife, not with stock (1 of 3 options) but could have been pretty easy to set up a company to do just that with stock valued at pennies on the dollar.  Make a large deposit as equity, take out shares at a low value, put the shares in an IRA at nominal value, bada bing. 
Maybe in my next life..
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Offline Tango

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Re: Financial Prepping
« Reply #24 on: October 19, 2017, 07:06:23 AM »
.
I still disagree about a govt mandated annual cap on the amount that one can contribute to one's 401k - other than this "catch up" thing (which wasn't available when I was contributing)

you may be thinking about this :

"The back way .. is to contribute every year to a traditional tax-deferred IRA and then convert that IRA to a Roth, paying taxes on the converted amount that has not yet been taxed. ... Here is where the reverse rollover helps: You can move all of your old IRA money into your 401(k)"

the FACT remains, however, that there IS a govt cap on the $ amount that one can contribute to one's 401k
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Offline Ochotona

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Re: Financial Prepping
« Reply #25 on: February 24, 2018, 09:03:10 AM »
Even the worst ETFs during the great recession still made 2 to 5% very few lost value on investment. Also, the last time the United States had a deflationary event was 1933. CPI was 0 in 2015 but the core index (index without volatile goods) was a healthy 2.8%. 

No one on this board was old enough to invest the last time deflation struck investments and I'd talk to another financial advisor if they tell you to keep any part of your portfolio in liquid cash. It earns you nothing.

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Sorry to wake up an old topic. I just had to answer this one. Anyone of dozens of stock ETFs lost 50% or more in 2008-2009. The claim that "even the worst still made 2-5%" just isn't true. Sure, maybe they made a 2%-5% dividend, but they lost 50% or more of their value, and it took years to get back to even.

SPY, the big S&P500 stock ETF, drew-down -50.8% from Nov 2007 to Mar 2012. 4 years, 5 months to come back to even. A long time if you were hoping to retire, or were in retirement. Very damaging.

I think we're closer and closer to some kind of financial cliff. I like having less taxes, yes, but the tax bill blew up the deficit. The world is going to lose faith in the US Dollar as the world reserve currency. If that happens, and the gold-backed or oil-backed Yuan takes over, we are toast. It's a life goal of mine to learn Mandarin, I guess we'll all have more impetus to do that!

These days I'm keeping 90 days worth of spending money in my gun safe, small bills, in case the financial system crashes like it almost did in 2008-2009. 10% of everything I have is in physical gold, stored offsite, some at an insured bank safe deposit box, some at a non-bank vault.

Stocks: I guess you could say I'm carrying only about 2/3 of the stock allocation I'd normally carry in good times. I'm only 45% in stock, instead of 70%-ish.

I have lots of cash. Bank interest rates are better. 1.45% at Ally Bank. I have US Treasury I-bonds, which pay 2.38% and adjust up for inflation. We may get some, and people are not expecting it.

Bonds - my bond duration is about 5 years. That has helped curb my losses as interest go up. If I had 30 year bonds, I'd be popping Prozac or looking for windows to jump out of. The TLT long bond ETF has lost about -10% since the middle of 2016, before the election. People think of bonds as "safe". Well...

I guess the point is, I think 2018 is a get-ready-for-something year, I'm prepping financially by being conservative, cash isn't trash, cash gives me options to plant seeds after the forest burns down. And gold. But not out of stocks or bonds either. My only real estate is my house, but it has "performed" great for 25 years, when I look at what young people are paying for housing now, it makes me quite sad for them.


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Offline Gilgondorin

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Re: Financial Prepping
« Reply #26 on: February 24, 2018, 10:11:44 AM »
I heard that Bitcoin is in a pickle right now. There was already much discussion about how it was at risk of going tango uniform at any given time for a long while now, and if the value's been frozen like I heard it has been, it would really reinforce the school of thought that Bitcoin hoarding is a poor financial prepping method except as a way to get more money to buy traditional methods of more stable currency.

Online TXAZ

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Re: Financial Prepping
« Reply #27 on: February 24, 2018, 10:23:51 AM »
I heard that Bitcoin is in a pickle right now.

Look at it from a counter-terrorism perspective:  Any financial system that allows covert transfer of funds is an ideal method for terrorist to fund activities.  Stable government don't like that, and would move to close, subvert or secretly monitor transactions (like they currently do with TOR browsers).   Look at the Hawala system.  https://en.wikipedia.org/wiki/Hawala  It's been around for a long time and relies on personal relationships between known members to transfer funds outside normal banking systems.  Why is it still running (on cellphones and text messages)?  Because it can be monitored in real time.

As such, some countries are moving to shut down Bitcoin in their domains.  Others have the technology to track transactions and would rather see bad guys self-identify by engaging in activities they can monitor through subterfuge or finesse.
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Offline Ochotona

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Re: Financial Prepping
« Reply #28 on: February 24, 2018, 12:56:58 PM »
Perth Mint (Australia) is working on a gold backed crypto. So it's not just speculation, you actually own an interest in a piece of metal.
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Offline Alte Schule

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Re: Financial Prepping
« Reply #29 on: February 24, 2018, 01:01:49 PM »
Perth Mint (Australia) is working on a gold backed crypto. So it's not just speculation, you actually own an interest in a piece of metal.
Where can I find information on that?
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Offline Ochotona

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Re: Financial Prepping
« Reply #30 on: February 24, 2018, 01:11:04 PM »
http://mobile.abc.net.au/news/2018-01-24/cryptocurrency-backed-by-gold-being-developed-perth-mint/9352036

I also set up a gold bullion IRA with Goldstar Trust Co, Canyon TX. The fees are low if the IRA is big enough... lower than GLD percentage wise. GoldstarTrust.com

Jim Rickards influences my thinking around gold pretty heavily - yet, he only advises 10% gold allocation for the average investor. 20% if you are really bullish on gold.

https://jimrickards.blogspot.com/2018/02/how-could-central-banks-unwind-qe.html?m=1
« Last Edit: February 24, 2018, 03:06:21 PM by Ochotona »
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Offline JohnnyDollar

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Re: Financial Prepping
« Reply #31 on: February 25, 2018, 09:03:16 AM »
I prefer my gold/silver like my cash...... physical.  :th_thicon_lol:

Offline Ochotona

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Re: Financial Prepping
« Reply #32 on: February 25, 2018, 10:06:47 AM »
I prefer my gold/silver like my cash...... physical.  :th_thicon_lol:

My gold / silver IRA is physical also. 62 gold Maple Leaves, 100 oz silver bar... it's just not in my custody. I didn't want to spend cash to buy the metals, but I had lots of IRA money, so I transferred it over to a metals IRA.
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Offline JohnnyDollar

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Re: Financial Prepping
« Reply #33 on: February 25, 2018, 10:21:39 AM »
I prefer my gold/silver like my cash...... physical.  :th_thicon_lol:

My gold / silver IRA is physical also. 62 gold Maple Leaves, 100 oz silver bar... it's just not in my custody. I didn't want to spend cash to buy the metals, but I had lots of IRA money, so I transferred it over to a metals IRA.
I like to hold it in my hands. (just my preference)
I have a statement that says I have some money in a 401k someplace.

Offline JohnnyDollar

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Re: Financial Prepping
« Reply #34 on: February 25, 2018, 10:36:39 AM »
I will say I have much less than you.

As an aside, I have about a 50/50 split between gold and silver.

I especially like Morgan Dollars (pre-1900)
and being from Texas, I also appreciate the Mexican Gold Pesos. - they good looking coins.

Online TXAZ

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Re: Financial Prepping
« Reply #35 on: February 25, 2018, 01:22:47 PM »
I prefer my gold/silver like my cash...... physical.  :th_thicon_lol:

My gold / silver IRA is physical also. 62 gold Maple Leaves, 100 oz silver bar... it's just not in my custody. I didn't want to spend cash to buy the metals, but I had lots of IRA money, so I transferred it over to a metals IRA.
1 oz or 1/10 oz Maple Leafs? 
Iím guessing the 1/10 spends easier?
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Offline Ochotona

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Re: Financial Prepping
« Reply #36 on: February 25, 2018, 02:57:20 PM »
1 oz or 1/10 oz Maple Leafs? 
Iím guessing the 1/10 spends easier?

1 oz Maple Leafs. Ah, I don't buy fractions of an ounce of gold. The premium is too high. I'd rather buy silver, or lead. :th_thicon_lol:
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Online TXAZ

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Re: Financial Prepping
« Reply #37 on: February 25, 2018, 03:55:13 PM »
1 oz or 1/10 oz Maple Leafs? 
Iím guessing the 1/10 spends easier?

1 oz Maple Leafs. Ah, I don't buy fractions of an ounce of gold. The premium is too high. I'd rather buy silver, or lead. :th_thicon_lol:

If it hits the fan, few commodities are more valuable than lead.   
Letís hope it doesnít.
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Offline Ochotona

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Re: Financial Prepping
« Reply #38 on: February 25, 2018, 05:26:55 PM »
Every once in a while, I surf YouTube looking for recent interviews by Charles Nenner. He thinks the stock market is going to lose 80% of it's value in years to come. If that happens there will be all sorts of economic problems and social unrest. It will be the Second Great Depression.
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