controversial personal finance opinion: if you have enough wealth you should own some physical gold
financialized gold has most of the downside of real gold and also none of its special upside, so not that
gold does not, as a rule, gain in value, and it’s vulnerable to theft, but it also does not, as a rule, lose in value, and also the rest of your assets are vulnerable to theft too. gold might have a higher risk but diversification is still valuable
in the event you lose access to your financials and have to leave – maybe not likely, but not impossible, apparently something like 1% of humans in 2021 are or have been refugees – gold jewelry particularly is both portable enough you can take it and universally recognized as valuable enough you can trade it. just don’t get it in your teeth
*Is* this controversial, even in the broad form stated here?
I kind of figured that there was broad agreement that there exists *some* level of wealth at which diversification into gold is worth pursuing (for the reasons you give), but that different people’s estimates of what that wealth level is vary by orders of magnitude, and some people would put enough forms of philanthropy above gold on the to-do list that in practice no one would ever reach the gold stage given our world’s current amount of philanthropic fruit to be picked.
(I’m not sure where I would place the threshold: I think it’s probably somewhere feasible to reach, but far enough beyond where I am now that it’s not urgent for me to figure out the specifics.)
a lot of people would argue that you should at some point diversify into financial instruments which abstractly reflect the value of gold, but I think many of those people would say you should not buy actual physical gold.
to pin myself down a bit while still leaving a lot of wiggle room, here’s some points on my Gold Advice Spectrum:
- if you need your money to be liquid in a normal economy any time soon, don’t buy gold
- if you have enough money to retire indefinitely on, I think it’s worth having something like a month’s money or so in precious metals
- if you’re bill gates you should actually should have buried a chest of treasure somewhere
What…what reasons do *they* give for wanting to diversify into gold? You can’t hedge against the collapse of your financial system by buying things that *depend on said financial system*.
I mean, okay, I guess you can hedge against *certain, partial* collapses that way, but it’s far more limited.
I should mention here that I literally wrote a post once titled “Diversification is an important part of building an investment portfolio” [link], in which I frame prepping as being essentially a way of shorting your civilisation: since almost everyone is very long civilisation pretty much by necessity, being also somewhat short civilisation is a good hedge (though I think you should still be net long). I also wrote a comment on a different post in which I called [maintaining stockpiles of soap and canned food and air filters] “pandemic insurance” [link].
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That Gold Advice Spectrum seems pretty reasonable.
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@cthulhubert replied: @brin-bellway there’s a certain degree of over-correction against physical gold buying because Alex Jones and some other right wing conspiracy nuts flogged buying real gold for ‘when the degenerate modern economy collapses’.
I mean, that’s traditionally how it works, right? If you think something is going to collapse, you short it and then write a report laying out your evidence and reasoning to try to convince others to do the same. Yeah, I disagree that one should be net short civilisation and think people who do that are setting themselves up for failure and pain, but short sellers are very often wrong and their existence is nevertheless a useful corrective.
(…yes, I think I *did* just draw a connection between the hate that Crazy Prepper People™ get and the hate that short sellers get.)
I think if you were genuinely going to short-sell civilization, gold’s a ridiculous thing to have. Like money itself, the value of gold is a social construct.
What you should be investing in is booze and pharmaceuticals. Set up a greenhouse that does not run on any electricity, or that gets all of its energy from solar panels, and grow food there year-round; you’ll have something to eat, something to trade, and if you are legally able to, maintain, like, one marijuana plant, so if civilization collapses you can go whole hog into growing marijuana. Once the pharmaceutical industry collapses, alcohol and marijuana will be incredibly valuable as painkillers again. And because drugs expire much more slowly than they claim on the label, keep a huge supply of ibuprofen, acetominophen, allergy meds, and so on… they’ll still be good ten years from now. Birth control, if you live in a place where it can be obtained OTC.
Hard liquor and wine are probably your best investment – they are commonly considered to improve as they age, and in a post apocalyptic world, everyone will want to get drunk. (I mean, not literally everyone. I wouldn’t drink alcohol after the apocalypse because it tastes disgusting and has no benefits I want. But most people.)
Me, I’d also get, like, a million solar chargers for phones and Raspberry Pis, and a whole lot of USB stick drives with adapters. Then I’d download Wikipedia every several months, and any medical database that allows me to download the whole thing, and as much info as I can get about maintaining phones and Raspberry Pis. Probably ebooks and databases on carpentry, plumbing, electricity, electrical generation, making wine and beer, etc, etc… I’d have a few hundred of the Pis in boxes, in a climate controlled room, probably with the boxes sealed in a plastic bin with a lid, and I’d have USB sticks with image files to put on the Pis. I’d use phones and tablets as monitors, or tiny monitors with low power requirements, so that I’d have a place to read my stored downloads. Then when the internet crashes I’d have huge amounts of information I could share with my neighbors so we could restore the amenities of civilization as quickly as possible, as many of them as possible. There won’t be making any new computers for a very long time- clean room tech is very complex – but keeping existing machines that use very little power in good repair, unused and protected from the elements, will help a lot.
Physical books are also very good but are heavy, not very portable, and easily destroyed by any kind of extreme weather – weather applies to computers too, but you can store vastly more information on 1 small computer than you can on 20 books, and then you put 20 replacements for your small computer in there. Still, if you’ve got space for a library and you don’t live somewhere it is likely to flood or burn, stockpile books. Nonfiction that give you information about how to survive, of course, but also, languages, books on cultures, history, and include a lot of fiction. People will trade a lot for escapism, and DVDs have a much shorter shelf life than books do.
All of these are more valuable trading goods than gold. You can’t eat gold, you can’t use it for anything but making things pretty (and making high-tech things you can’t make if civilization collapses.) I might buy silver and copper for antimicrobial purposes (and then I’d have to figure out how to keep them from tarnishing), but gold is overpriced and is only of use to a civilization – I mean it can be one with much lower tech levels, but you still have to have, like, blacksmiths.
You know what else would be valuable? Blade sharpeners and the knowledge of how to use them. Also, blades. Guns will be very useful for a while but modern guns require far too much technology to remain supplied with ammo, and all you can use them for is hunting and killing. But blades can be used for hunting and killing, and preparing food, and gardening, and so on and so forth. Knives, axes, scythes, machetes, and yeah, swords. Mostly because people think swords are sexy. They’d make good trade goods.
The only circumstance where gold is useful is where your specific country’s financial system has collapsed, but everyone else is okay. If you’re American, that’s not gonna happen. We’re too intertwined with the world’s financial systems. If we go down, so does most of the world. (This is not a good thing.)
…yes? Both/and, and gold is certainly one of the lowest-priority items for the reasons you give.
However, it’s important to note that people think gold jewellery is sexy and trade-good-y too, and also I am not American (well, okay, I pay the Americans tribute in exchange for right of return, but that just makes it easier to become a refugee there: it doesn’t mean never becoming a refugee in the first place).
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You either got the idea of solar-powered phones and downloading Wikipedia *from me*, or else it is *very* strange that people in your apocalypse stories aren’t doing this: I once commented on one of said stories remarking on its absence and doing a special-interest infodump about it.
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>>keep a huge supply of ibuprofen, acetominophen, allergy meds, and so on… they’ll still be good ten years from now.
Naproxen doesn’t just suppress the pain of menstrual cramps: at higher doses, it actually *makes periods lighter*. I would go with naproxen over ibuprofen, though acetominophen still has its place.
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