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Thread: savings tip?

  1. #1

    savings tip?

    I have a $365/month car loan which I'll pay off in February 2012. I can't wait for that, as this will ease my cash flow every month and free up money I can use on myself, or stocks, or silver, etc.

    I was given this tip: after the car loan has been paid off, to continue to make the $365 monthly payment... to a new savings account. Two benefits:

    1. I'll continue to live within my means, frugally, rather than "splurging" unwisely given I'll have more money every month
    2. If I do this for 3 years, that'd give me $13,140; if for 4, $17,520... which I could use to buy a second car later on.

    This sounds like a nice idea, but I drive a 3.5-year old Japanese make with excellent MPG and I have less than 26k miles on it after 3.5 years. I don't use it to get to work and drive mostly locally on weeknights or weekends.

    Wouldn't it be better for me to take that freed-up $365/month and use it on silver, for example? Or even to throw it into my Roth IRA? After the car loan is paid off, my car will last me a long time and I don't expect any car maintenance headaches.
    Ron Paul - America, you WILL regret not voting for him!

    KNOWLEDGE IS POWER



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  3. #2
    On this forum you are going to be told that by simply saving your money in a bank account or whatever is a bad idea. You will be crushed by inflation. Take that $365 and buy stocks or precious metals.
    What I say is for entertainment purposes only!

    Mark 10:45 The Son of Man did not come to be served, but to serve, and to give His life as a ransom for many.

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  4. #3
    Unless REAL interest rates become positive there's ZERO reason to save money in the bank.

    If your goal is to see long term stability in the best (imho) form of cash, then go physical PM's.

    If you want dividends, higher potential etc, then go into some stocks.

    It's all about your goals, timeframes and risk tolerance to be honest.


    Quote Originally Posted by cubical View Post
    On this forum you are going to be told that by simply saving your money in a bank account or whatever is a bad idea. You will be crushed by inflation. Take that $365 and buy stocks or precious metals.

  5. #4
    Quote Originally Posted by The Freethinker View Post
    Or even to throw it into my Roth IRA?
    Assuming you are young and saving for the long run, your Roth IRA is a good option for long term money. It allows you to buy and sell without any tax complications or worries.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  6. #5
    First step, if you haven't done it already, is to have at least six to nine month (or even a year given the current economy) worth of money in something fairly liquid (like a measly savings account) to be able to cover all of your living expenses during that time- just in case something should happen and you find yourself unable to work or find new work. I ended up out of work for 11 months in a previous downturn and this was incredibly helpful in getting by. That was with a double college degree (two majors- I was two classes away from having two separate degrees). You want safety and liquidity on this portion of your funds. You can take more risk if you like for anything above that.
    Last edited by Zippyjuan; 06-13-2011 at 01:10 PM.

  7. #6
    I would own physical precious metals before I would trust the government with my Roth IRA.

  8. #7
    Forget the ROTH IRA...if you're not retiring within the next few years, it is NOT worth the risk considering inflation and the weakening dollar.

  9. #8
    I have a 6 month emergency fund right now. Would like to push it another 2 or 4 months. However, it makes me feel comfortable to go ahead and save a little less in my savings emergency to invest else where. I also feel fairly secure in my current job so I'm not expecting lay offs anytime soon (I'm in a growing part of the tech economy).

    I'm doing my company's 401(k) match (free money). Next I'm taking $250 a month (roughly the same amount as you) and buying physical silver. If/when I get a raise I'm planning on opening an Roth IRA and putting money into that via EuroPac to get my money out of the US Dollar.

    I feel as a novice this is probably the best that I can do right now. At least it makes me feel better and IMO it's all about how secure you feel and this strategy for me gives me that secure feeling.

    But yes take that money and either roll it into paying off any high interest debt you have (minus mortgage) to get it paid off first then put it into something else.



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  11. #9
    Isn't it better to own shares of a mutual fund than it is to own dollars? If I have 1,000 shares of Mutual Fund A, worth $100,000, and the market tanks due to hyperinflation, I still have 1,000 shares. As the underlying companies regain their footing, the purchasing power of my shares will eventually return. However, if I have $100,000 in cash equivalents, and there's hyperinflation, I'm toast.

  12. #10
    Quote Originally Posted by falconplayer11 View Post
    Forget the ROTH IRA...if you're not retiring within the next few years, it is NOT worth the risk considering inflation and the weakening dollar.
    And how many years of investing experience do you have? Do you know what options you have in a Roth IRA?

    You invest in a Roth IRA when you are young, so that you avoid taxes when you are growing your investments. You never get taxed on the growth. Putting money in an IRA right before you retire defeats the entire purpose. A Roth IRA is just a brokerage account, with all of the investment options that you have anywhere. It is not managed or controlled by the government.
    Last edited by Brian4Liberty; 06-13-2011 at 02:14 PM.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  13. #11
    An IRA? AKKKK! Put all your savings in a place where you need government permission and bank cooperation to get it back? And where government can change the rules at any time? I'm not sure that would be my last choice, but it is close.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  14. #12
    now... when y'all say buying silver and gold. whats that mean? physical silver and gold.... like jewelry and coinage? i'm new to this and any advice would be welcome

  15. #13
    Quote Originally Posted by Luciconsort View Post
    now... when y'all say buying silver and gold. whats that mean? physical silver and gold.... like jewelry and coinage? i'm new to this and any advice would be welcome
    Most mean coinage that you physically own and keep in you house/hiding place ect, not paper. Welcome to the forums!

  16. #14
    Coins and bars. Rings and necklaces aren't investment grade in the sense that you pay a VERY large premium for the craftsmanship and that value is HIGHLY subjective.

    Coins and bars are the most efficient means of physical PM investment.

    Quote Originally Posted by Luciconsort View Post
    now... when y'all say buying silver and gold. whats that mean? physical silver and gold.... like jewelry and coinage? i'm new to this and any advice would be welcome

  17. #15
    I recommend 3 months if single and 6 months if you have a family in dollar savings. It could be in a savings account or money market. You just need to be able to get to it, just in case you need it.

    Save up 3-6 months of food and rotate it in and out if you have the space. Buy a full set of camping supplies including a water filter. Buy a nice set of tools and any power tools you think you would use. After that, yeah, buy silver, gold, 401k at least as much as it takes until you get the full match or a few percent of your income, mutual funds, copper jacketed lead, another firearm, IRA and so on.

    Next time you buy a car, you may want to buy a used car, that way your payments can be 1/2 as much and your insurance will be less too.
    Lifetime member of more than 1 national gun organization and the New Hampshire Liberty Alliance. Part of Young Americans for Liberty and Campaign for Liberty. Free State Project participant and multi-year Free Talk Live AMPlifier.

  18. #16
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  20. #17
    Quote Originally Posted by The Freethinker View Post
    I have a $365/month car loan which I'll pay off in February 2012.
    I would highly recommend that you get out of debt sooner, rather than later.

    You might consider selling your car and buying a new one for the cash you receive. Take a step down in comfort if you have to. That way, you could start saving $365/mo now, rather than almost a year from now.

    I would avoid an IRA. I realize the tax advantages are tempting, but you're also leaving yourself open to the whims of the government. They're already raiding the government employee pension fund. Is it such a stretch to think that they would eventually raid private accounts, too? That's what they did in Argentina when the economy collapsed.
    Working on ending viral disease through development of the world's first broad-spectrum antiviral drug. You can help!

  21. #18
    many good points as usual however I disagree with the IRA and ROTH. As for your “tech” industry its going to be worthless once the next major financial collapse happens. I would bet a silver coin, that there will be major cuts in the tech industry including your job. You may assume that your job is safe, but that might be your downfall of “assuming.” Secondly I would have to agree with most of the members who say to hold on emergency funds; however I would advise not in dollars. It’s pretty much a safe bet to hold Chinese RMB, Australian dollar, and Swiss Francs. I'm not a fan of Canadian dollar but if it comes down to Canadian vs USD hold on Canadian.

    I would advise against PMs right now per say because QE2 is about to end and we don’t know when QE3 is going to start. If QE3 starts right away then buy silver right away. But if QE3 has a 1-3 month delay, silver is going to have a very wild ride.
    Last edited by psi2941; 06-13-2011 at 07:48 PM.
    Rand Benedict Paul.
    Not only did he sell us out, this douche bag did it to his own father! I'm more upset him selling his father out. I don't care who i think is going to win i would never sell my father out. If his willing to sell his father out what else is for sale?

  22. #19
    One last time: an IRA is your money. It is in your brokerage. If the government goes after that, they will also go after your Euro-Pacific Capital account or your bank account. There are two major risks: tax code changes and inflation, and those apply to any account. There is nothing different about an IRA. Yes, all "accounts" are different than hiding coins under your mattress. That should be obvious.

    You can buy almost anything in your IRA, but it is not physical. Your bank or Credit Union account is not physical either.

    As for other advice given here, yes, don't hold debt. Yes, save liquid money for a rainy day (or better yet, a "rainy" year).
    Last edited by Brian4Liberty; 06-13-2011 at 08:41 PM.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  23. #20
    Quote Originally Posted by Keith and stuff View Post
    I recommend 3 months if single and 6 months if you have a family in dollar savings. It could be in a savings account or money market. You just need to be able to get to it, just in case you need it.

    Save up 3-6 months of food and rotate it in and out if you have the space. Buy a full set of camping supplies including a water filter. Buy a nice set of tools and any power tools you think you would use. After that, yeah, buy silver, gold, 401k at least as much as it takes until you get the full match or a few percent of your income, mutual funds, copper jacketed lead, another firearm, IRA and so on.

    Next time you buy a car, you may want to buy a used car, that way your payments can be 1/2 as much and your insurance will be less too.
    I have about 2 months of food, 6 months of living expenses, a Katadyn walter filter which cost me over $200 and which has never been used. I have gold, silver, a multitool, a handgun, ammo, a survival fire starter, paper towels & toilet paper galore, lots of moist wipes, flashlights, waterproof matches, a power drill, a huge box of bandages, tons of batteries, a first aid kit for the car, lots of thick clothes for winter weather, a crapload of bottled water... I have a 401k and a Roth IRA.

    For the prepping supplies I'm still building... I am gonna mylar-bucket more grains, get more bandages, and other stuff. I live alone, so the supplies of bottled water, napkins, paper towels, toilet paper, moist towels (really good stuff that can be used to disinfect surfaces and to clean appliances) are rather decent. I took a break in buying these cleaning items because I have so much already. I should consider supplies which aren't for cleaning...
    Ron Paul - America, you WILL regret not voting for him!

    KNOWLEDGE IS POWER

  24. #21
    Quote Originally Posted by psi2941 View Post
    many good points as usual however I disagree with the IRA and ROTH. As for your “tech” industry its going to be worthless once the next major financial collapse happens. I would bet a silver coin, that there will be major cuts in the tech industry including your job. You may assume that your job is safe, but that might be your downfall of “assuming.” Secondly I would have to agree with most of the members who say to hold on emergency funds; however I would advise not in dollars. It’s pretty much a safe bet to hold Chinese RMB, Australian dollar, and Swiss Francs. I'm not a fan of Canadian dollar but if it comes down to Canadian vs USD hold on Canadian.

    I would advise against PMs right now per say because QE2 is about to end and we don’t know when QE3 is going to start. If QE3 starts right away then buy silver right away. But if QE3 has a 1-3 month delay, silver is going to have a very wild ride.
    Agreed on the QE2, QE3 thing. I'm waiting to see whether there will be a delay before QE3 starts and if so, if silver drops. If it drops considerably, I will gladly raid some of my savings to buy. If the drop is big enough, I might "stretch" and buy a lot at once. If the drop's not that big, I may get 50 ounces at the most.
    Ron Paul - America, you WILL regret not voting for him!

    KNOWLEDGE IS POWER

  25. #22
    Quote Originally Posted by Brian4Liberty View Post
    One last time: an IRA is your money. It is in your brokerage. If the government goes after that, they will also go after your Euro-Pacific Capital account or your bank account. There are two major risks: tax code changes and inflation, and those apply to any account. There is nothing different about an IRA. Yes, all "accounts" are different than hiding coins under your mattress. That should be obvious.

    You can buy almost anything in your IRA, but it is not physical. Your bank or Credit Union account is not physical either.

    As for other advice given here, yes, don't hold debt. Yes, save liquid money for a rainy day (or better yet, a "rainy" year).
    I disagree with holding debt. if its variable rate then its another story.

    I'm just recommending not to have documented savings. I really do see the government doing crazy stuff when pushed against the wall.

    Quote Originally Posted by The Freethinker View Post
    Agreed on the QE2, QE3 thing. I'm waiting to see whether there will be a delay before QE3 starts and if so, if silver drops. If it drops considerably, I will gladly raid some of my savings to buy. If the drop is big enough, I might "stretch" and buy a lot at once. If the drop's not that big, I may get 50 ounces at the most.
    just one thing i forgot to add is they might not call it QE3 but some other bs.

    and if you have no care for our pathetic county and just want to make the most money vote for obama cuz thats what i'm doing.
    Rand Benedict Paul.
    Not only did he sell us out, this douche bag did it to his own father! I'm more upset him selling his father out. I don't care who i think is going to win i would never sell my father out. If his willing to sell his father out what else is for sale?

  26. #23
    Jim Rogers is rarely wrong, and I happen to believe he is correct. If you go the stock route, dig into agriculture, mining, commodities & tangible goods that are high demand in bad and good times. These are your safe bets. Also, hold PM's instead of paper. (Though I hold about 5-6 months in FRN's, as a just in case sort of thing..) I've been contemplating about going into FOREX, but I don't know much in that arena, but I'd like to swap some of my FRN's for Franc's or possibly RMB. There really isn't anything out there in the fiat world that is worth any salt, but its better to hold something which has less risk than more risk for wealth preservation.

    While this isn't exactly investing advice per se, I recommend that you stock up on a few weapons and lots of ammunition along with a store of food and water. You do not want to be one of the folks caught with their pants down -- being prepared means survival. All of us need to survive. It will get bad, and we need to be the ones who come out of it in the best shape to determine our future. Just imagine if instead of Soros holding all that wealth, Glen Bradely did, or B.J. Lawson, or Bob Murphy, or any other Classical Liberal / Libertarian. Something to think about -- in any event.
    School of Salamanca - School of Austrian Economics - Liberty, Private Property, Free-Markets, Voluntaryist, Agorist. le monde va de lui même

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  27. #24
    It sounds like you are already doing well. I recommend another firearm, still, though
    Lifetime member of more than 1 national gun organization and the New Hampshire Liberty Alliance. Part of Young Americans for Liberty and Campaign for Liberty. Free State Project participant and multi-year Free Talk Live AMPlifier.



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  29. #25
    Quote Originally Posted by The Freethinker View Post
    Agreed on the QE2, QE3 thing. I'm waiting to see whether there will be a delay before QE3 starts and if so, if silver drops. If it drops considerably, I will gladly raid some of my savings to buy. If the drop is big enough, I might "stretch" and buy a lot at once. If the drop's not that big, I may get 50 ounces at the most.
    The end of QE2 this month is expected and investors are already taking that into account. I would not expect anything to happen in any of the markets when the end actually comes. If it was suddenly announced that it was not ending, that would impact markets because it would be unexpected. If ending QE2 will cause metals (or any other investments) to drop sharply, the declines should be already underway.

  30. #26
    Quote Originally Posted by Zippyjuan View Post
    The end of QE2 this month is expected and investors are already taking that into account. I would not expect anything to happen in any of the markets when the end actually comes. If it was suddenly announced that it was not ending, that would impact markets because it would be unexpected. If ending QE2 will cause metals (or any other investments) to drop sharply, the declines should be already underway.
    in principle, agreed but "the markets" thought we were doing fine in 2006-2007. the markets should be able to account for QE2 ending but it doesn't mean the markets are smart and always correct.

    I know what your trying to say, what i'm trying to say is there are sooo many clueless people out there that can effect the markets.
    Last edited by psi2941; 06-14-2011 at 12:05 PM.
    Rand Benedict Paul.
    Not only did he sell us out, this douche bag did it to his own father! I'm more upset him selling his father out. I don't care who i think is going to win i would never sell my father out. If his willing to sell his father out what else is for sale?

  31. #27
    Quote Originally Posted by Brian4Liberty View Post
    One last time: an IRA is your money. It is in your brokerage. If the government goes after that, they will also go after your Euro-Pacific Capital account or your bank account. There are two major risks: tax code changes and inflation, and those apply to any account. There is nothing different about an IRA. Yes, all "accounts" are different than hiding coins under your mattress. That should be obvious.

    You can buy almost anything in your IRA, but it is not physical. Your bank or Credit Union account is not physical either.

    As for other advice given here, yes, don't hold debt. Yes, save liquid money for a rainy day (or better yet, a "rainy" year).
    There is a HUGE difference between an IRA and a bank account: I can withdraw money from my bank account whenever I want for whatever reason and the IRS is not involved. You can't withdraw money from your IRA except under particular circumstances or with a penalty and the IRS is always involved.

    Furthermore, money in IRA's can be presumed to be savings for retirement and the government is far more likely to "borrow" that by force than money out of your bank account or brokerage account, which can not be presumed to be long-term savings.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  32. #28
    Quote Originally Posted by Acala View Post
    There is a HUGE difference between an IRA and a bank account: I can withdraw money from my bank account whenever I want for whatever reason and the IRS is not involved. You can't withdraw money from your IRA except under particular circumstances or with a penalty and the IRS is always involved.

    Furthermore, money in IRA's can be presumed to be savings for retirement and the government is far more likely to "borrow" that by force than money out of your bank account or brokerage account, which can not be presumed to be long-term savings.
    I believe he means a Roth IRA.

  33. #29
    Quote Originally Posted by psi2941 View Post
    I disagree with holding debt. if its variable rate then its another story.
    Yeah, considering today's rates, long term fixed rate debt could turn out good in the long run.

    The OP didn't seem to be talking about that kind of money though (like purchasing a house).
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  34. #30
    Quote Originally Posted by Acala View Post
    There is a HUGE difference between an IRA and a bank account: I can withdraw money from my bank account whenever I want for whatever reason and the IRS is not involved. You can't withdraw money from your IRA except under particular circumstances or with a penalty and the IRS is always involved.
    Yes, that is a big difference. The OP already has a Roth IRA, so I assumed he knew about those restrictions. I also used the term "long-term" money, not liquid emergency funds.

    Quote Originally Posted by Brian4Liberty View Post
    Assuming you are young and saving for the long run, your Roth IRA is a good option for long term money. It allows you to buy and sell without any tax complications or worries.
    Quote Originally Posted by Acala View Post
    Furthermore, money in IRA's can be presumed to be savings for retirement and the government is far more likely to "borrow" that by force than money out of your bank account or brokerage account, which can not be presumed to be long-term savings.
    Why would my regular brokerage account be any different from my tax-sheltered brokerage account when it comes to the government "borrowing" my assets? Are they going to go into my Roth IRA Brokerage account and take all of my IBM shares?
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

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