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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].

That Gold Advice Spectrum seems pretty reasonable.

@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.)


#reply via reblog #adventures in human capitalism #101 Uses for Infrastructureless Computers #apocalypse cw?

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