[FoRK] Re: [silk] The Demise Of The Dollar

Stephen D. Williams <sdw at lig.net> on Wed Jun 20 15:06:02 PDT 2007

Eugen Leitl wrote:
> On Wed, Jun 20, 2007 at 03:28:40PM -0400, Jeffrey Winter wrote:
>   
>>> You're asking when to prepare, and the answer to that is 
>>> to always be prepared.
>>>       
>> How do you prepare exactly?   
>>     
>
> Do not have any debt, build multiple other areas of life support other than your
> job, have an active social network, have items and skills of intrinsic 
> value, diversified investments (1/3rd of metal (not dead tree, bars and coins),
> some cash in diverse stable currencies, 1/3rd real estate which was not bought 
> in a bubble, and 1/3rd stock in real items (mineral/energy, known to be not a 
> scam etc).
>
> Roughly. Other people no doubt have much better suggestions.
>   
Different perhaps, not necessarily better.

Definitely be able to be fairly self-sufficient skills wise and have a 
wide range of capabilities to handle whatever is needed and advantageous.
The best investment, until you are a ways along the downhill slide, is 
in skills, knowledge, and capability.  Adding $100,000 to your savings 
gives a bit of an annuity, adding $100,000 to your education, formally 
or informally, can produce an extra $100,000 for every year after, a 
somewhat better rate of return.  Avoid stagnation, even if it means 
avoiding a nice middle-management salary.  That way leads to madness and 
mediocrity (unless you are running the company).

Use debt wisely.  Sometimes that means avoiding it, other times it means 
embracing it to leverage various situations (education, starting certain 
types of businesses, kids being young, rare opportunities).  This 
depends on many factors, including interest rates, lifetime 
discontinuities (children, education, starting a business, etc.).

Keep your options open.  Be ready to restructure your life if needed.  
Few disasters are the end of the world.  (Probably just one in fact. 
;-)  )  Learn how to live cheaply, even if you choose not to most of the 
time.

Every sure thing has it's weak spot.  Energy is a good bet only until 
energy becomes dirt cheap and easy to produce, at which point all kinds 
of things could change, in addition to energy stocks.  The details are 
totally unpredictable.

Save (and pay down debt) when the marginal value of money is low (older, 
when you are making much more) not when it is high (younger, with 
children, when there is little or no discretionary income).  All of the 
financial people who benefit from you investing and encourage this are 
simple minded or dishonest on this point.  Saving all through life only 
makes sense when you have only a low-paying job for your whole life. 

I made very little in my first professional IT-related job, 
semi-consciously trading doing what I wanted and exposure for what I 
could have made driving UPS trucks or something.  I make, with a W2 in a 
conservative situation, about 75 times that first technical job.  For 
some contracts in the past, I earned at a rate of over 221 times that 
amount early.  I ignorantly chose to bootstrap and self-teach myself 
instead of going to Ohio State, when I would have certainly received 
lots of aid, and possibly had a scholarship, because I didn't want to go 
into debt...

sdw


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