Cash Is Not King
Part of being successful in business is making money.
Another part is keeping it.
And while there are many business people who have high earning power, far fewer have high saving power.
(Gary Halbert was famous for making large sums of money, then promptly spending it all. He once wrote: “Here’s the real truth: I have made, in my lifetime, zillions of dollars. However, I am not prudent with money. I have very little of it left.”)
But even prudent savers don’t have it made because of the relentless wealth-destroying power of inflation…
- Inflation is a consequence of fiat currency.
- Inflation erodes your purchasing power every year.
- Inflation a disincentive to saving and a destroyer of wealth.
Here’s the thing: Inflation is at work all the time, but it often goes into overdrive during times of war.
War with Iran has been planned for many years. It has been delayed for at least four years due to political disagreements in Washington. Now, it may finally happen. Official reports indicate that war with Iran may begin as early as spring 2012.
What will happen if the U.S. or Israel starts a preemptive war with Iran?
Gonzalo Lira predicts a sharp increase in the price of oil, which is to be expected. He also predicts temporary price deflation in precious metals (two weeks max) followed by a rapid rise in value.
Dollar inflation and euro inflation is in the offing, in the weeks and months following a war with Iran. The assets that will rise drastically in price will be precious metals, especially silver; agricultural commodities; and oil – obviously. The assets that will collapse in price will be sovereign bonds, corporate bonds, and equities, in that order.
Saving some cash in a bank is probably a better strategy than blowing it all on lifestyle, but leaving it in the bank (or even the stock market) is still risky, especially with another war on the horizon.
Personally, I’ve been investing in both silver and gold for the last two and a half years. By converting cash into precious metals, I’m gaining some protection from price inflation. As the dollar loses value, the value of my silver and gold goes up.
I’ve already doubled my money once. And if silver cracks $50/oz (as I expect it will), I will double my money again.
I recommend two sources for buying gold and silver if you are interested. I have purchased from both sources.
One is Colorado Gold. Their commissions are low because they don’t spend money on advertising and they have high minimum purchases. You will need to have a few thousand dollars ready to invest if you want to do business with Colorado Gold.
The other source I’m using now is Silver Saver, a unique service that lets you invest in small amounts over time.
You can make one-off purchases or set up regular recurring purchases either weekly or monthly. This puts your investing on autopilot and takes advantage of dollar cost averaging.
Silver Saver works like a savings account — except all your “money” is in silver and gold. You can convert your purchases back into dollars whenever you’d like (and have it deposited directly into your bank account). Or you can take delivery of your gold and silver at some point.
Either way, I think it’s an excellent way to invest and preserve a portion of your wealth — and get off the feast/famine cycle that’s so common among freelance types.
-Ryan M. Healy
P.S. Just like PayPal, you will need to link your bank account to Silver Saver when you sign up. You should be able to start scheduling purchases within 48-72 hours.