Safe places (Banks, EMI) to keep legit earned money?

[permabear]

Silver isn't overpriced, it's actually grossly undervalued historically (currently well below 1980,‍ 2011 and 2020) and underpriced relative to other commodities through COMEX and LBMA price suppression⁠ (but that's another story). It's the premiums on PHYSICAL silver that are problematic at the⁤ moment (up to 40%), if you take a very long-term view then stacking silver today⁣ will still prove VERY profitable in the end. But if you're taking a more short-term⁢ view then I would say current physical premiums are too high and wait a while.︀

 

[permabear]

You don't keep any physical cash whatsoever? Are you new to this︋ offshore shenanigans?

 

[DavidS]

Please, you are‍ just saying that getting 15% roi (which is freaking amazing) every year is that easy.⁠

Not gonna mention the risk adjusted returns???

 

[Silvio]

To say "Buy only Gold\REIT\Silver" is as equally ridiculous as to say "Buy only DAX"‌ or "Buy only Bitcoin". You need a diversified portfolio to ensure capital preservation and long‍ term growth. Don't be fooled by the performance of the last 10\20 years. The S&P⁠ had a few lost decades, so did Japan, Gold, Silver and ANY other asset classes,⁤ NO exceptions.

All these suggestions - put your money in silver\gold\bonds\S&P\treasuries and all the other⁣ ideas - were already backtested to the death. Read "Global Asset Allocation" by Meb Faber⁢ (it's free on his site) and you can will see how all these portfolios worked︀ in the last 200 years. Portfolio diversified over multiple asset classes + Rebalancing = Long︁ term growth.

 

[DavidS]

High IQ. And gold/silver/bitcoin are not productive assets︂ by the way.

 

[Golden Fleece]

Your point is well-taken. I would only add that zero interest rates (ZIRP), negative interest rates⁠ (NIRP), and the level of government intervention in asset buying that we have seen in⁤ the markets over the past thirteen years are quite unprecedented in all of human history,⁣ much less during the last 200 years.

We have now entered a new paradigm. Diversification⁢ and rebalancing many not be enough. Investors must be nimble when the great reset occurs.︀ The days of building a Permanent Portfolio of an equal allocation of stocks, bonds, gold,︁ and cash may be gone, because most assets are now correlated -- all rising in︂ price because of low interest rates and all dropping in price during a liquidation event.︃

https://www.investopedia.com/terms/p/permanent-portfolio.asp

 

[JohnLocke]

What do you guys think about the idea to put 80% of your money in‌ crypto coins you can stake and get interest on?

 

[Golden Fleece]

I assume that you mean 80% of your speculative funds. For example, if you devote 10%‍ of your net worth to speculative ideas and you want to devote 80% of those⁠ speculative funds (or 8% of your net worth) to cryptocurrencies, that is okay. If you⁤ mean 80% of your net worth, that is insane. Crypto is pure speculation. Why would⁣ anyone risk 80% of their wealth on any speculation?

 

[jjrapy]

and how do you think the new︂ portfolio will b compounded?

 

[Golden Fleece]

I am not exactly sure what you mean by that. IMO, either you must‍ invest in things that everyone has needed throughout human history (e.g., food and shelter) or⁠ you need to be very nimble and have an exit plan in place if you⁤ invest in equities. Personally, I prefer agricultural investments.

https://www.offshorecorptalk.com/th...y-dividend-interest-income.33203/#post-169929
For example, if you invested in⁣ the NASDAQ at the peak in 2000, you eventually lost almost 80% of your money.⁢ Even if you rode out the two financial crises that followed and refused to sell︀ at the bottom, it still took you 17 years to break even. The great reset︁ will be far worse, so you need an exit plan. Just like leaving a country︂ that is lurching towards totalitarianism, it is far better to leave the markets too early︃ than too late.

 

[jjrapy]

I was referring to the portfolio composition,︃ as you mentioned equal allocation of stock, bonds, gold, cash.

What composition you think a︄ new portfolio will have?

 

[Silvio]

I've heard all about this and believed︂ this stuff too.. the whole enchilada of ZIRP\NIRP, Fed intervention, all markets are fake, bubbles︃ everywhere, stock market is fake, plunge protection team, only Gold is real, and all the︄ words that the perma-bears love to say. This "knowledge" cost me a lot of money.︅ Perma-bears should (generally) be avoided as they are wrong 99.99% of the time. In fact︆ even if you know sure that there will be a 50% crash some time this︇ decade, you should be invested as the gains you will miss out on, are bigger︈ than 50% (assuming 7% yearly which is pretty average and assuming you can't pick the︉ bottom).

I keep hearing for decades about "the great crash", Liquidation Event, "The big crash︊ to end all crashes", "The end of the financial system", Peter Schiff, Jim Rogers and︋ all the other gurus have been peddling these stuff for decades and conspiracy-minded people love︌ this stuff. They have been completely wrong for decades on end. Of course they blame︍ Fed intervention for their mistakes in prediction but the truth is, the world is developing,︎ there are great new companies being born every day and plenty of new markets that️ are developing. In the meantime there were very few real crashes (2000, 2007) and even‌ when there was a real crash the market recovered in a 3-7 years (yes, even‍ in 1929), anybody that listened to them missed out on huge gains. And diversification⁠ would have saved you from almost any one of these crashes. The permabear scare-tactics are⁤ mostly just for pushing their subscribers to buy gold for which they receive commission. Same⁣ reason many of these gurus offer some "agriculture project" in a far away land, like⁢ Panama or Peru that promises high yield % but somehow ends up being a scam.︀

The problem with all these theories is that if you tell people about ZIRP\NIRP\Fed\Bubbles in︁ all assets you sound clever and intelligent. Whereas if you just say "The global markets︂ will probably grow 5-9% this year" you sound like just an average clown with no︃ special insight. We did not really enter a new paradigm. Read economic history books from︄ the 50s and 60s and you will see that the Fed was intervening back then︅ as well and people were afraid of money printing just as they are now. I︆ agree that the intervention in 2020 was huge and really risky\stupid\inflationary, but overall balanced\diversified portfolio︇ will win in the long term. Or just buy Gold and hope it will somehow︈ perform better than it did in the last 100 years

These people are not there︉ to educate you. Their goal is to scare you so they can sell you their︊ scams, be it Gold, some shady agriculture project, or their "top secret stock picks that︋ turned $1100 into $3.4M".

This chart below shows how the richest families in the world︌ invest. These are the top of the top, they are not stupid and they receive︍ the best advice that money can buy. There still are ways to find assets that︎ are uncorrelated and sustain crashes. It's better to learn and emulate them and not copy️ the big loser Peter Schiff (or Jim Rogers or any other permabear that missed any‌ important trend in the last 20 years)
https://pbs.twimg.com/media/ENo_9vyU8AA0ZlL?format=jpg&name=900x900

 

[Golden Fleece]

That chart is very telling. It shows that these family offices place only‌ 25% of their wealth in developed market stocks. This is a far cry from what‍ most retail investors do, where they often place 80% to 100% of their wealth in⁠ equities. Like I said previously, if that is what you are doing "you need to⁤ be very nimble and have an exit plan in place if you invest in equities."⁣

BTW: Harvard University has financial brain power that makes the average family office advisors look⁢ like dunces -- and the University is one of the world's largest and most geographically︀ diverse farmland investors. This also applies to other Ivy League universities. It is a fact︁ that agriculture produces higher returns with far less risk and volatility than all other investments.︂ And real assets are historically cheap compared to financial assets.

 

[Silvio]

Overall I agree, in fact in another book "The Ivy Portfolio" by the same author Meb︃ Faber, he talks in detail about the portfolios of Yale and Harvard and farmland is︄ mentioned as a part of their portfolio. Still it's just a part of their portfolio,︅ not the entire portfolio and I believe no more than 25%. Majority is still in︆ private equity, equities and hedge funds.

And for the individual investor there are obvious drawbacks:︇ you are completely dependent on whoever manages it for you (unless you want to become︈ a farmer yourself), there are taxes, salaries involved, mgmt fee and you are exposed to︉ changes in taxation/government fees/food prices and in worst case even expropriation of land. Most people︊ can't have a team that manages their farmland like Bill Gates does... For the individual︋ investor I am almost certain that it is not worth the hassle and doesn't produce︌ higher returns. Do you mind sharing what yield % are you getting on your managed︍ farmland investments? Just out of interest.

 

[Golden Fleece]

It depends on your belief system. If you believe, as maxmmm does, that the⁠ financial system is fundamentally sound, then the Permanent Portfolio makes sense, with an equal weight⁤ of stocks, bonds, gold, and cash. The gold (or silver) component should still help to⁣ balance out your portfolio if the usual type of financial calamity occurs.

On the other⁢ hand, if you believe that the current level of world debt is unsustainable and you︀ distrust the ability of politicians to tie their shoes in the morning much less run︁ an economy, then a basket of real assets (real estate, gold and silver, commodities, agriculture,︂ etc.) make much more sense as opposed to financial assets.

BTW: You probably still have︃ four to five years to prepare. I am a big believer in reoccurring historical cycles.︄ You can read the following books on the topic:

https://www.amazon.com/Secret-Life-...sprefix=philip+anderson,stripbooks,222&sr=1-4
https://www.amazon.com/Fourth-Turni...+fourth+turning&qid=1618956237&s=books&sr=1-1
https://www.amazon.com/Storm-Before...efore+the+storm&qid=1618956263&s=books&sr=1-1
All of these︅ books, based on actual reoccurring cycles place the next calamity between 2025 and 2028.

 

[Golden Fleece]

If I told you, you would‍ not believe me. Bear in mind that the yields, cited in the graph below, are⁠ for U.S. farmland. If you own a farm in Latin America, where the price of⁤ farmland and the cost of labor is half as much or a third as much,⁣ and you can then transport your harvest to countries that pay first-world prices then .⁢ . . well, you can do the math. This disparity in cost also explains why︀ you can afford to have your land professionally managed in a win-win situation with a︁ profit-split. It is absolutely critical to have management's interests aligned with your own interests.

 

[Silvio]

Please share︀ the yield if you don't mind (can also PM me if you don't want to︁ reveal it here publicly).

So far judging by what you wrote, High Yield + Agriculture︂ + Latin America = sounds like a scam. I really hope I'm wrong. I even︃ know personally some Germans that have fallen for this exact scam, investing in all sorts︄ of forests in Latin America and other agricultural projects (another variation is investing in Durian︅ fruits in Malaysia), waking up years later to realize that there are "problems" with the︆ forest and the money is gone. The reason this scam works is because agriculture "takes︇ time" so the perpetrators have lots of time to wait for the fields to bear︈ fruits and of course you can't take the principle out. After all, anybody that can︉ make 15%+ yield (I'm just assuming here) doesn't need any outside investors, and can simply︊ borrow from the bank at close to ZIRP...

 

[jjrapy]

Well, I agree with maxmmm.
And the portfolio of David Swensen︃ (cio of Yale) sure have REIT but up to 25%.

 

[Golden Fleece]

Sure, there are all types of scams. At a minimum, you need boots-on-the ground, proper︅ due diligence, title of the property in your name, aligned interests, local lawyers, a country︆ with a rule of law, multi-generational farm experience, multiple sources of water, proper natural pest︇ control, a buyer for your crops in advance of your harvests, and a dozen other︈ factors. It is not easy, which is why very few investors do it -- which︉ explains why farmland is still so cheap in many countries. In fact, most locals still︊ engage in subsistence farming.

Yes, I have also examined timber land investments. You could visit︋ your trees every year for decades and then the trees suddenly disappear one year. That︌ can happen even in the U.S. Everything involves some degree of risk.

Banks in capitalist︍ countries in Latin America still work within real markets. There is no NIRP or ZIRP.︎ In fact, there are often no mortgages for real estate. Couples often save for a️ home until they can afford to pay in cash. You can get 4%-5% for CDs‌ in USD. You might pay 12% for a car loan, if you can get one.‍ In short, people operate in a real capitalist environment with real interest rates, just like⁠ in the U.S. before 2008. So, of course outside investors are needed in a true⁤ capitalist economy where interest rates are at normal market levels.

Heck, I just made a⁣ one year fully collateralized bridge loan in the U.S. for 15%, because the business is⁢ expanding so quickly that it needs multiple sources of funds, more than it can get︀ from just banks. People are lazy and unwilling to think outside the box when it︁ comes to investing, which is why they collectively make the same mistakes over-and-over again. This︂ is exactly why history repeats itself -- and why I am so interested in repeating︃ cycles.

 

[4br]

My friend went all in on crypto in 2013.‍ Now he has over $100,000,000.

I have posted my nuanced take on crypto before.

It has been the best buy of the quarter, the year, the decade.