Cal's  Corner

A long-standing principle of properly handling money is to save 10% of what your income is, and then learn how to invest that money wisely, so you will have money set aside for an emergency, and then begin building a retirement nest-egg.  In my case, I was fortunate enough to have belonged to a union that took care of the retirement side of my finances so that I have a steady income; now that I am retired from my longest running employment/career.   For those of you who are non-union workers, or have a business of your own, you need to learn about different investment vehicles, so that you can make an educated decision on how best to plan for you retirement years.   There is an old saying that says, "people don't usually plan to fail, they usually fail to plan".  


Just over a year ago, I entered into a training program that would have led to my becoming a retirement planning consultant.   I will not mention the name of the firm that I was getting involved with in the interest of my desire to stay out of 'hot water'.  At some point in my training, it became clear that there was a major difference in the way this firm approached the topic of 'financial protection' and the knowledge that I had acquired in this area.   Needless to say, I discontinued my relationship with that firm.  

What they were advocating was paying a premium each month to a particular retirement plan that had two parts to it;  life insurance and retirement funds that were invested to generate growth through a higher than conventional level of interest. rate.  Financial protection was a key selling point they used during their presentation and comparisons to the failed model of 401K funds put into mutual funds that lost money due to the market dowturns of the last 15 years was prime example of how they could improve one's financial picture by utilizing a better investment instrument that yields a good percentage rate of return, and insures depositors against a market downturn.  Now it is always wise to learn from the mistakes of the past, but there is the very real probability that we are facing, not only some severe market downturns, but a also a very high rate of inflation as well.   During the last quarter of a century, the powers that be in the USA have been spending a lot more money than they take in, and in order to cover the difference, they have to either borrow the money, or print lots of it; or both.  At present, there is a national debt of about 18 trillion dollars, and that means that the dollar is headed for a financial 'iceburg'.   At worst, the dollar will totally collapse (like the currency in Greece did), or else we are looking at very high inflation.  

       Now what this said firm was touting sounded good to the average low-information US citizen, but what I just mentioned is something that their new investment vehicle is not going to protect against.   What good is it to have a rate of return on investment of 8 to 12 percent, if the rate of inflation is 15 percent or higher. 

I wanted to be able to tell clients that part of the funds they had allocated for their retirement funds should be diversified into tangible assets.   Real estate and precious metals are among the most common things that are hedges against a currency that goes 'south'.  It was not long before I knew that this firm was not going to allow me to tell my clients this while I was working for them.  

But this does not mean that an individual should not choose a typical retirement plan, it only means that it is not enough, by itself, to fully protect one from the type of financial future we face in America. 


Bottom line is this; if you want to protect your financial assets, get some gold and silver that you can use as a means of exchange for a time of currency crisis.  Such a situation may not be that far off.   It is a good idea anyway to have an emergency fund set aside where you can last at least 3 to 6 months of being unemployed or unfunded from conventional means, so why not have a major portion of that emergency fund in a liquid asset that will not only serve you in an emergency, but will also keep up (if not exceed) the rate of inflation.