September 11, 2010
ON WEALTH
Blogson Peter of Shakey Pete's Shootin' Shack has some good advice on creating wealth.
I'll add a little to that.
Pay yourself first - cash your paycheck, put away 10% for saving/investing. Use another 10% to pay down whatever outstanding debts you have, and do whatever it takes to live off the other 80%.
What to invest in? Well, personally, I think civilization will continue for a while, so I like stocks. Which are kinda pricey. So, put the money in a savings account until you have enough to invest. I recommend a stock index mutual fund. You'll never BEAT the stock market average return, but you'll never come in under it, either.
If you're less optimistic about the future of civilization, then invest in inflation-proof assets. I'm partial to the advice from the book "The Alpha Strategy". His two most important things:
Education - learn how to grow stuff, make stuff, and fix stuff. Your best investment is a marketable skill. Secondarily, hit a book sale and find some guides on carpentry, home repair, gardening, hunting and camping. At the very least, get a Boy Scount Manual. Keep 'em handy just in case.
Tools - good, solid, reliable hand-tools. And not just the electric ones.
As for Pete's advice about buying gold & silver, it's sensible, but I'll add this: don't bother with fancy collectable coins or bullion bars. Go to a pawn shop & get rings, chains, and beat-up coins with no collectable premium. They're smaller, and easier to sell, trade or barter if the need arises.
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