speaking of gold...again

[RI AL]

Hope everyone is well and enjoying a great day weekend.

 

Now that I am officially a "pensioner" at age 57,.I thought it wise to bump up my wife's and my annual review by our financial planner. I told him that we both felt it was time to become a bit more "conservative". He agreed and since I initially spoke with him about this a few weeks back, he had a new "portfolio" designed for us when we met yesterday. (I LOVE the word portfolio...makes me sound like a zillionaire with corporate jets, houses in the tropics and a spa in every room...then I woke up...as the saying goes.... No spas, don't fly much and I really don't consider the Rhode Island sticks to be the tropics...)

 

Anyway, before we even got down to discussing the changes.I asked if gold should be a part of the new ""conservative" (a polite word for old-fogeyish) investment plan. He had already incorporated it into a small percentage of the new allocations (my goodness...don't the big words just fly), which leads me to believe that there is room for more "upward movement". He is researching if it is possible to actually have possession of gold invested in an IRA. I was so hoping that one of those nifty fifties with the buffalo would look particularly good in my collection...but alas...that doesn't look too likely.

 

Well...so the word on the street is gold might go up. Gee...that with a few bucks can get you a coffee and a really small donut somewhere...maybe...might be day-old stuff though

 

RI Al

[harvey8542]

Good luck with the new portfollio and Enjoy Retirment.

[physics-fan3.14]

Good luck with the new portfolio. This is a bad time to retire with the whole market downturn, but I understand that there are extenuating circumstances in your case. Yes, conservative is the way to go, you should be a bit heavier on the bonds in your case. Don't completely eliminate stocks, though, they will help your portfolio last longer. As for Gold, I know that at least the Eagles can be put in an IRA, I'm not sure about the buffaloes. Foreign gold is usually not allowed in an IRA, for some reason or another.

[jgrinz]

As for Gold, I know that at least the Eagles can be put in an IRA, I'm not sure about the buffalo's

 

That is strange that they weren't automatically included as they are more PURE METAL than the Eagles ..hmmmph

[BULLY]

As for Gold, I know that at least the Eagles can be put in an IRA, I'm not sure about the buffalo's

 

That is strange that they weren't automatically included as they are more PURE METAL than the Eagles ..hmmmph

 

The original law that allowed Americans to add precious metals (coins at least) to their IRAs was specifically written to allow for the American Eagle bullion coins, by name.

 

I have a feeling that the law has just not caught up with the Buffalo, because, as you say, it is guaranteed for purity and content, heck, even it's SOURCE metal must be from the United States!

 

In the meantime though, it's just the American Eagle. If you double check the statute, it may be worth a call/email to your Congressman and Senators, and put them to work on something like that, instead of figuring out party lists of yesteryear for Roger Clemens and friends!

[Mozin]

With inflation coming soon, I hesitate to own much in bonds. Stocks will at least help keep up with inflation.

[RI AL]

Wow...as always, great replies. Physics...you nailed my planner's recommendations on the head. I have never been a "bonds kind of guy", but the new portfolio will be about half. I still want to play a bit in the market so some "excitement" remains in the mix. Of course, I've been after Fidelity and ING to release my retirement accounts through work but they are amazingly slow. Since I can't access the accounts until 59 1/2 (barring a crisis) I have a little time to assess any changes I want to make. RIght now...I'm TIRED of messing with the accounts. Short, sweet, safe and simple is my goal. I will be interested in exactly HOW I will be investing in gold as part of the portfolios. Prefer hands on of course with the gold...but I can understand how it might get confusing in a deferred compensation plan/IRA. Paper, where someone ELSE holds the gold, just doesn't get me too excited...not that I will have that much to worry about anyway....

 

RI AL

[BULLY]

Yes, conservative is the way to go, you should be a bit heavier on the bonds in your case. Don't completely eliminate stocks, though, they will help your portfolio last longer.

 

I partially disagree with this statement, and I am not wowed by the advice from your financial planner, in particular, about allocation OUT of stocks at age 57.

 

Where I agree with this statement is that you shouldn't eliminate stocks completely, they are ESSENTIAL to help your portfolio last longer. However, I will add that I think that is actually a tremendous understatement, especially for folks your age.

 

In the PAST, financial "experts" were telling folks approaching retirement age (65ish) to move their retirement funds into more conservative vehicles like bonds and anything basically OUT OF STOCKS.

 

 

However, the rules have changed!

 

The problem is multi-fold:

 

1. People LIVE longer. A LOT longer.

2. The rules, accordingly, that were designed for people to move out of stocks because they were going to retire at 65 and live until age 68, and thus only need their money for 3 years are OUT THE WINDOW.

3. The reality is that people are now commonly living to age 75, 85, even 90 years old and OLDER. Check your families, check the nursing homes, and...

4. People are OUTLIVING THEIR MONEY.

5. What can be done? People (yes, this means retirees) need to start thinking again as though they still have a life to live! You are 57. You can VERY REALISTICALLY have another THIRTY YEARS of life ahead of you (or more!), and thus another THIRTY YEAR time horizon in the stock market ahead of you.

6. Most financial experts would consider a 30 year time horizon MORE than adequate to CONTINUE investing in stocks, substantially.

7. Most financial experts would consider a 20 year time horizon MORE than adequate to CONTINUE investing in stocks, substantially.

8. Most financial experts would consider even a 15 year time horizon MORE than adequate to CONTINUE investing in stocks, substantially.

9. Why have the so-called "experts" not caught up with this when it comes to folks at a young retirement age, when people are living so much longer, and so many people are running out of money that news of poverty-stricken seniors is broadcast daily?

10. So, at 57, even CONSERVATIVELY, let's assume a 15 year time horizon before you should think about getting way less exposure to the stock market.

11. Sometimes, we get second opinions regarding medical advice we are given. When given financial advice, from a so-called "expert" who may or may not have any real credentials, why do we not generally ever seek any second opinions?

 

Ultimately, another big factor that plays into how you invest is not just your time horizon, or POTENTIAL time horizon, but your RISK TOLERANCE. Can you stomach ups and downs in the stock market? Can you handle low risk, high risk, medium risk? How much volatility is TOO much for you, and when (at what age) might the risk tolerance start to change, if ever?

 

Some people just NEVER invest. That's a personal choice, and if the risk tolerance isn't there, then so be it.

 

Some people invest, but "follow the pack" and invest foolishly, they buy high, and sell low. If you ask them how to make money in the stock market, they will tell you "Buy Low, Sell High," but they will do the EXACT OPPOSITE because when it comes right down to it, their GUT gets to them, and they have emotional reactions, and their buying and selling is emotional. Exuberant buying occurs as the stock market is rising, so they buy high. They see their profits going away when the market falls, and see that people are selling, so they too sell (the "pack" mentality) and they respond due to fear and sell low.

 

Suze Orman has a weekly TV show on CNBC. Her advice on subjects like this falls "outside the box" of other so-called "experts" and she can offer some good reasons about why she thinks the way that she does.

 

Clark Howard has a syndicated radio show, and has some good advice as well (www.clarkhoward.com) to check your local listings.

 

The Motley Fools are also contrarians in the advice they offer, with lots of advice on how individuals should take control of their own investing (who better to be responsible for my portfolio than ME)?!?!?!? www.fool.com

 

Both Suze and Clark cover a broad range of topics, not just investing for retirement, so don't be discouraged if you don't find your topic right away. It's a hot topic though, so it comes up frequently!

 

 

 

 

[bsshog40]

Can silver eagles be put in an IRA? I'm having to remove my 401k from my last employer. Don't know much about this stuff but thinking of just moving it to a bank in a Traditional IRA. Would I be able to put my silver in this also? How's that done. I guess I'm asking financial questions now that I am very unfamiliar with. My last 401k I cashed and that was a mistake now that I'm closer to 50 yrs old.

[physics-fan3.14]

Bully, great post. When I said a bit heavier in bonds, notice that I did not include any percentages. I agree 100% with you, however at his age, bonds should play in moreso than a portfolio for someone my age (22). However, I still have 10% allocated in bonds, just because being diversified is a good idea. The fact that he is retiring earlier and going to need that money earlier also has to weigh in to the calculation. I am not a financial expert, so I am not going to give specific or detailed advice to RI AL, just generalities. That being said, I would still keep a healthy percentage of your portfolio in stocks.

 

Whatever I did, however, I would not sell my stocks and try to reallocate right now. You would being taking a big loss. While the idea of being "paper losses" might not be comforting, the fact remains that you haven't actually lost the money until you sell. Give the stocks a couple of years to recover, and then try to reallocate.

 

And getting a second opinion is always a good idea!

[Mozin]

BULLY,

 

Well stated.

[RI AL]

Hey again, Physics, and everyone....

 

Regarding taking a big loss right now, I understand what you are saying but I never understood if I sell now, and buy back shortly thereafter, where is the big loss? I am strictly into no-load funds and my planner is fee only.

 

As a side issue, I was royally miffed (still am) at Fidelity, ING and Ameritrade because the paperwork and length of time to get anyone to MOVE on my request to convert my 403b and 457 to IRA's through National Financial Services and my planner. It took about 2 months and only yesterday did I learn the ING was still holding my assets in the "core account" though I had done EVERYTHING to facilitate the conversion WEEKS earlier. Their excuse... and I quote, "we were waiting for VERBAL CONFIRMATION". BS to that. NO one ever said anything about "verbal confirmation" in my NUMEROUS phone calls to them and papers galore. As it works out, they did me a favor in that my sell orders were implemented before the present slump...ING just SAT on the $ waiting for a "verbal confirmation"?? Yea??? wanna buy a bridge?. Anyway, I was very blessed to catch the market high while ING sat...and sat....

 

BULLY...excellent post and thanks. Because of health stuff...I almost wouldn't be here now (or attached to a dialysis machine) so my expectations for another 30 years are not too realistic. Thank goodness we knew that kidney failure was genetic and we started planning about 25 years ago when I learned I had the disease (non-symptomatic at that time). We had/have a wonderful planner and other assets will remain in the market; Roth IRA stuff our planner also started us in back when the ROTH was a new invention. So I hope that we are as well "covered" as we could be...a few millions would be nice though.

 

I AM concerned about the "state of the world" in general and all the stocks, bonds and stuff won't be a concern. We can't "plan" for that, however. Even gold...as my planner says, "you can't eat it".

 

Well, this is way off the topic of coins and I apologize for boring some of you. It's funny how "getting ripe" changes one's thinking.

 

Have a great evening!1 What a great group y'all are!

 

RI AL

 

 

[World Colonial]

A couple of comments. As far as I know, the comments in this thread about gold ownership in an IRA are correct. However, I am not aware that you are permitted to take physical possession of the metal. If you do, I believe it would be considered a distribution and become taxable. If this is not the case, then someone please let me know so that I can do this and them send it off to Switzerland where there is less envy filled populist demagoguery than in America.

 

As for your portfolio, if you are not comfortable managing your money yourself, then by all means use a financial planner. Like any other profession, there are some good ones and not so good. But for the most part, I would classify most people in this profession as conventional thinkers.

 

There are no rules. The idea of rules (whatever they are) is based upon what worked in the past and not an indication of the future. If we could go back in time from 1979 to 1982, I would expect that the financial services industry was advocating hard assets over financial instruments at the top and bottoms of those markets respectively. At the stock market peak in 2000, they were bullish on stocks and not on hard assets. I know that for a fact because I was paying attention then. Now that all assets have been rising since 2003 because of the credit mania, it does not surprise me that they would advocate a little of everything.

 

I am not a financial wizard by any means but, though I do not believe it is as prevelant as during the 1990's stock mania (we can thank the 2000-2003 bear market for that), I do not believe that there is a full appreciation out there for how difficult it is to make money in the financial markets.

 

In case you did not know, the stock market has returned essentially zero since the January/March 2000 peak, possibly a very small amount if the pathetic dividend yield is included. For the individual, it would depend upon what they owned of course but I am talking about the major averages. But since most individuals do worse than the averages, they have probably lost money since then. Of course, the time period I selected was arbitrary and the numbers would change substantially if I were to pick (for example) 1995, but eight years is still a long time with no net gain.

 

And given the fact that the median net worth in the United States is only about $100,000, eight years of treadmill walking can be disastrous as well. And the reason why this is a problem is because the United States has a NEGATIVE personal savings rate and tries to make it up through asset appreciation.

[BULLY]

Can silver eagles be put in an IRA? I'm having to remove my 401k from my last employer. Don't know much about this stuff but thinking of just moving it to a bank in a Traditional IRA. Would I be able to put my silver in this also? How's that done. I guess I'm asking financial questions now that I am very unfamiliar with. My last 401k I cashed and that was a mistake now that I'm closer to 50 yrs old.

 

Here's a link with some VERY general information about how to invest in American Eagle coins in your IRA, and how to make that happen, in a rollover situation for instance, how to choose a custodian, etc.

 

http://www.americaeagle.com/IRA-rollover.html

 

I do NOT believe they are the only game in town, by any means. It was just one of the first that came up on a Google search, with reasonably credible information in an easy-to-follow format.

 

On this site: http://www.universalcoin.com/

about in the middle, there is a link to request a free kit about how to "Buy Gold, Silver & Platinum Through Your IRA"

 

THEN, if this is true, I found this article the MOST INTERESTING. It indicates that the original law only allowed for American Eagles, but then Congress changed the law to allow for bullion investors of foreign coins IF they met certain purity standards, and gave examples, some of which I collect:

 

http://www.silvermonthly.com/201/putting-bullion-in-iras/

 

It also mentions FUND investing within a retirement account, rather than holding physical coins.

 

A couple of rules of note:

 

1. It’s also important to note that you cannot store your IRA bullion yourself — it must be stored by an IRS-approved depository.

 

2. It’s important that gold and silver investors know that they cannot put bullion they already own into their IRAs. Blame the IRS for this seemingly arbitrary rule!

 

Anyway, some info to read and more to look into if you wish to explore it further.

 

I've also read some info about investing in Gold and Silver Exchange Traded Funds (ETFs) recently in The Motley Fool Newsletter -- www.fool.com

So you may want to avail yourself of the FREE parts of that web site. It is a WEALTH of information, no pun intended.

 

Aside from that, plain old buying coins may be the easiest way to invest in gold and silver (or even platinum) for many of us, but for those who wish to pursue it, the option exists, with its various caveats.

 

 

[BULLY]

With inflation coming soon, I hesitate to own much in bonds. Stocks will at least help keep up with inflation.

 

And like I said, it really depends a lot on an individual's risk tolerance.

 

However, if you have a time horizon, expecting inflation or not, the stock market has outperformed other investments steadily, historically.

 

Heck, even a basic S&P 500 Index Fund can do that for you, ultra low expense ratio, and reasonable performance over time. Supplement it with some dividend earning stocks to pump up your earnings.

 

If you have the stomach for it though, and you have the time horizon as I mentioned in my previous post, I'm with you here: Stocks are the way to go!

[EZ_E]

Al, I had read an article about how proof gold Buffaloes are not allowed into an IRA. This suggests to me that maybe uncirculated Buffaloes are allowed.

 

Good luck with the renals, buddy! (thumbs u

[just-john]

Most Anerican' could retire now if you were willing to move to Bolivia per capita of $2817.00

per year rants 125 compared to USA's $43.594.00 per year ranks 9th just don't get sick

in Bolivia .The way to not out live your retirement money is simple smoke more.Life style and where you live are a big factor California verses Wyoming to consider.

[RI AL]

Hey, Just John.

 

Back in our 6 overseas work years, we did visit Bolivia for about 5 days. BEAUTIFUL country but the altitude was a bit tough to take. I believe that the LaPaz airport is about 12000' up. We lived at 9,000 in Peru...but landing in LaPaz during a heavy rain made the run to the terminal a bit of a challenge.

 

The open markets in LaPaz were loaded with coins and like always, I am kicking myself for not buying more. Oh well...on school teacher budgets I guess I did ok.

 

RI Al

[RI AL]

Hey, Bully. Just curious...

 

I wonder what an "IRA approved depository" would be. Here in RI...we call them politicians.

[World Colonial]

My father's family is from Bolivia and I agree with the point of your comment, sort of. He lives in Cochabamba in a three bedroom house and rents it for $350 per month.

 

However, since the median net worth in the United States is only about $100,000, I would say that most Americans are not in a position to retire anywhere unless they have some other income source such as Social Security if they are eligible to collect it.

 

And just to be clear, this $100,000 is not financial assets but consists of home equity (currently going nowhere but lower) and the supposed value of their personal possessions, which would probably sell for a fraction of their stated value in the open market. Most Americans have few financial or other investment assets (such as our coin collections). In my opinion, the future financial outlook in the US is nowhere near as tranquil as most people seem to believe, and that is even sssuming that the current economic environment remains more or less the way it is.

 

The only way the median US household could retire even to Bolivia or a similar place (they are unlike to be able or choose to work there) would be to take the kinds of risks that many or most Americans have been taking up until now, almost entirely uninformed speculation. Many Americans have been using financial speculation as a substitute for savings. I consider this behaviour typical of the financially desperate which for those who are financially marginal is more likely than not to end badly, just as we saw in the 2000-2003 stock bear market.

[World Colonial]

I collect Bolivian Republic from 1864-1909 and Spanish colonial but only in high grade, I would be interested in knowing where you saw these coins. I never really have had the time to look on my trips. But all I have seen is low grade material that I did not want to buy.

 

My assumption is that most of the high quality Bolivian and Spanish colonial coins left the country a long time ago. They are probably located in foreign museums and collections in Europe and the United States.

 

Though these coins in high grade are much scarcer than those who do not collect them might believe, there certainly are not very many local collectors. By US coin standards, the coins are dirt cheap but few locals can afford to buy them.

[RI AL]

I am really enjoying this conversation, and hope it isn't too far off "coins" so as to get bumped.

 

All in all...my wife and I have been in about 20 countries, fell in love with several (including Bolivia) but we;re most grateful to be home. We saw a lot of sadness, sickness, poverty as well as great beauty, many wonderful people, places and memories. The U.S has problems to be sure, but I wish everyone could experience life in some of the places that we worked/visited. There would be a lot more stars and stripes on people's porches.

 

My financial planner, who also has a young coin collector son that I have helped out a bit, tells us at each visit about the low savings rate among Americans...probably in the negative. My wife and I were were fortunate to have to pay our own way through college, have to work overseas (which was quite an education) to get ahead and save enough for a down payment on a modest home and very early in our careers learned the importance of saving for a goal. I wouldn't change a thing.That is missing in "this generation". My planner calls it "hunter gatherer generation" or the "I want it now" crowd.

 

My planner also is quite concerned about how very little people are putting away for retirement. It isn't always easy...but we took his advice early in our careers and my wife and I both have worked hard at reaching a goal. I am retired now and I thank my planner every day in my mind.

 

RI AL

 

[RI AL]

Good evening, "World Colonial"

 

Well...not always "high grade", but when we lived in Peru, I was a bit of an adventurer and my wife and I liked to explore the back streets, little market places (I believe they were called ferias) and an occasional suggestion from a taxi driver. There was a large "smugglers market" very close to the border with Arica, Chile that we had lots of fun at. Cheese, car parts, chicken heads and feet, llama fetuses, every herb and spice you could imagine and an occasional vendor with some coins or paper money. My best opportunity, however, was at a little jewelry store in Tacna, Peru (about 2 hours south of where we lived in the mountains as part of an American Copper Mining Corporation). It was called Inca de Oro and in his display cases he had, must be, hundreds of pounds of silver coins, mainly Bolivian and Peruvian jammed in there in heaps. My wife, loving an occasional pair of gold earrings or what not, would make a purchase and he would let me pick out a small handful of coins and would weigh them and charge me a bit over the silver price. This was, back in the mid-late 70's, about $2-$3 an ounce if I remember right. Now back then, I had no catalogs or anything, I just picked what looked interesting and old. Made some good choices but I SO wish I knew then what I know now.

 

In LaPaz, I found coins offered by street vendors seated on the side streets on those colorful blankets with fruit, vegetables, every type of potato you could imagine and an occasional small group of coins. I'm sure times are different now...but back then...it was the joy of the hunt, and tremendous fun bickering in my butchered Spanish. Then again, I would ask people in shops (or taxis) where I could find coins and occasionally that worked out well.

 

I hope your next trip is productive. We have wonderful memories of our South America days.

 

Someday, if anyone is interested, I had a scary little adventure trying to get a gold coin I purchased from the bank in Arica, Chile back across the border into Peru on New Year's eve. Bad idea. Talk about close call...and being S T U P I D! But I got it in safely and was SO glad to pay the duty on it when returning to the U.S.. Darned thing nearly cost me my life.

 

RI Al

[Just Bob]

I am really enjoying this conversation, and hope it isn't too far off "coins" so as to get bumped.

 

All in all...my wife and I have been in about 20 countries, fell in love with several (including Bolivia) but we;re most grateful to be home. We saw a lot of sadness, sickness, poverty as well as great beauty, many wonderful people, places and memories. The U.S has problems to be sure, but I wish everyone could experience life in some of the places that we worked/visited. There would be a lot more stars and stripes on people's porches.

 

My financial planner, who also has a young coin collector son that I have helped out a bit, tells us at each visit about the low savings rate among Americans...probably in the negative. My wife and I were were fortunate to have to pay our own way through college, have to work overseas (which was quite an education) to get ahead and save enough for a down payment on a modest home and very early in our careers learned the importance of saving for a goal. I wouldn't change a thing.That is missing in "this generation". My planner calls it "hunter gatherer generation" or the "I want it now" crowd.

 

My planner also is quite concerned about how very little people are putting away for retirement. It isn't always easy...but we took his advice early in our careers and my wife and I both have worked hard at reaching a goal. I am retired now and I thank my planner every day in my mind.

 

RI AL

 

Are all of you young guys out there paying attention? This man is right on the money! I wish that I had done what you did when I was young, Al. When I think about all of the thousands of dollars that I wasted, with nothing to show for it, it makes me want to scream "SAVE!" to every teenager that I see. Now, in my late forty's, I'm having to play catch-up, and believe me, it isn't easy. Hopefully all of the preaching that I direct at my kids will take root, and they will prepare better than I have.

[RI AL]

Good evening again.

 

Thank you for the kind words. When I was still teaching, I made it my personal mission to grab every new teacher (who thought that they would teach for 30 years in the same job and then have a great Massachusetts State pension and have it easy) to tell them of the 403b and 457 retirement plans that the school offered (but kept a deep dark secret because the business office didn't know how to do the paperwork). Anyway, it took hold with a few and I feel really good about that. Reality was, teacher burn out was high, job instability was higher and most of them never stayed in long enough to be vested. I LOVED my job...and if it weren't for the darned old kidneys, I's still be there.

 

Don't be too hard on yourself. You sound pretty normal to me...we all did the "hunter-gatherer" thing back in our youth...but I was blessed with college loans, rent and grocery bills. You learn fast when you have to eat canned beef stew and Uncle Bens Converted rice several nights a week. Also...hamburger helper was a big hit though I had to cook it in the shower room at FSU. No hotplates allowed back then ...and microwaves were unknown.

 

You got me smiling now. RI Al

[just-john]

RI-AL- LaPaz the altitude was ruff on me at the time I was a 3 pack a day smokes. Was doing some work for the Bolivian Air force's with UH-1 Iroquois long story. -World Colonial --For $350 thats I'm guessing is a very nice house.Last time I was in Cochabamba my hotel which was nice not fancy was $10.00 PER NIGHT. Prices are significantly lower outside La Paz. For example, a one-bedroom apartment in Santa Cruz can rent for US$80 per month, while a two-bedroom apartment with gallery and large patio can go for US$130 per month and a three-bedroom apartment with two bathrooms and a garage for US$170 per month. A chalet in the California district, with three bedrooms, maid's quarters, garden and large garage, can be rented for US$350 per month.

 

You can buy a three-bedroom chalet in Santa Cruz, centrally located in the 2nd/3rd anillos (ring roads), with two bathrooms, garden and garage for two cars, for US$47,500. If you are prepared to move out slightly further, to the 4th/5th anillos, a similar investment will get you a four-bedroom, three-bathroom house with patio and garage. And if location close to the city center is not that important to you, a three-bedroom chalet in one of the outer anillos can cost as little as US$13,000.

 

As for anticréticos, US$5,500 can get you a two-bedroom apartment with a small patio right in the center in the 1st anillo. A little further out in the 4th anillo, a pretty, two-bedroom house with large rooms and garage can be found for US$9,000.

[RI AL]

Hey, Just John.

[RI AL]

Hey, Just John.

 

Hope you've given up the smokes!!

Bad ^*@*%&$&^@$^!

 

Gee...maybe we will buy a "summer home" out there. We loved the llamas, alpacas, vicuna and that small rat looking thing that lived in the altiplano. The Flamingos at 14000 feet were a complete surprise! Of course my favorite memories are the coin bickerings and trying get chicken soup without the feet and heads floating in it. ....oh...and beef or chicken that didn't taste like fish....and the squishy reed islands on Lake Titicaca.

 

RI Al

[World Colonial]

The numbers you cite for housing costs in Bolivia sound right, though I have never looked for a home myself there. My father lives in one of the better areas of town; that is what I understand from him anyway as he would not live in a dive.

 

I am familiar with Anticredico and forgot about that, I am not familiar with the specifics but that $5500 sounds really low for any kind of place that any American would want to live in or find acceptable. The first time Iived there (from 1967-1970 when I was really young) we had this arrangement but the anticredico was (I believe) $2500 even back then. The house was nice - but hardly a mansion - though the yard seemed real big.

 

As for Santa Cruz, I visited it for the first time this past visit and spent the New Year there. I was not impressed at all. I would describe it as a large town (largest population in Bolivia now I understand) but not cosmopolitan at all. I would also like to know what those chalets actually look like. My uncle and some of my cousins live in a house that doubles as a shop. It is supposedly in the most expensive part of town (that seems hard to believe to me) in the second ring. They can only afford to live there because they run the shop for the owner. But I doubt that most Americans would find it acceptable even though it is not a dump.

 

Basically what I mean is that, using something like Anticretico, its true that many Americans could retire there or a similar place if they had to or really wanted to, but because of their weak finances, they would not find it to their liking and would still have limited financial flexibility. They would find little to do (unless they liked the outdoors) and would not be able to afford to travel back to the US often. Also, even though living there is cheap, over time, the disaster we call the USD would impact them badly because their purchasing power would go down, down, down.

 

Eventually, I plan to spend more time there but before I do, I plan to be in a better financial position. I know how my uncle and cousins live and that making a living there is difficult. Its not something any of us would want to have to do.

[BULLY]

Hey again, Physics, and everyone....

 

Regarding taking a big loss right now, I understand what you are saying but I never understood if I sell now, and buy back shortly thereafter, where is the big loss? I am strictly into no-load funds and my planner is fee only.

 

As a side issue, I was royally miffed (still am) at Fidelity, ING and Ameritrade because the paperwork and length of time to get anyone to MOVE on my request to convert my 403b and 457 to IRA's through National Financial Services and my planner. It took about 2 months and only yesterday did I learn the ING was still holding my assets in the "core account" though I had done EVERYTHING to facilitate the conversion WEEKS earlier. Their excuse... and I quote, "we were waiting for VERBAL CONFIRMATION". BS to that. NO one ever said anything about "verbal confirmation" in my NUMEROUS phone calls to them and papers galore. As it works out, they did me a favor in that my sell orders were implemented before the present slump...ING just SAT on the $ waiting for a "verbal confirmation"?? Yea??? wanna buy a bridge?. Anyway, I was very blessed to catch the market high while ING sat...and sat....

 

BULLY...excellent post and thanks. Because of health stuff...I almost wouldn't be here now (or attached to a dialysis machine) so my expectations for another 30 years are not too realistic. Thank goodness we knew that kidney failure was genetic and we started planning about 25 years ago when I learned I had the disease (non-symptomatic at that time). We had/have a wonderful planner and other assets will remain in the market; Roth IRA stuff our planner also started us in back when the ROTH was a new invention. So I hope that we are as well "covered" as we could be...a few millions would be nice though.

 

I AM concerned about the "state of the world" in general and all the stocks, bonds and stuff won't be a concern. We can't "plan" for that, however. Even gold...as my planner says, "you can't eat it".

 

Well, this is way off the topic of coins and I apologize for boring some of you. It's funny how "getting ripe" changes one's thinking.

 

Have a great evening!1 What a great group y'all are!

 

RI AL

 

 

 

Ok, while we're off topic, it's important stuff, so I'm running with it.

 

If you sell now (at a loss or even a gain) and buy back shortly thereafter, the big loss comes in the form of whatever percentage goes to the brokerage house (even if the financial planner is working for a flat fee).

 

So, let's a assume you're working with $200,000, sell, nice commission on the sale, loss or gain aside. Buy again, nice commission again, even in a no-load fund. That is likely to cost YOU, and your long term return.

 

The whole mess you described with ING and Fidelity sounds NIGHTMARISH! I might start looking into filing some complaints there, about them sitting on your money. Verbal orders? Who are we, Martha Stewart selling Enron? People go to prison for stuff like that. Spare me. If they are a member of NASD, they could be in trouble, and you may have some recourse. Fidelity, on the other hand, despite some low fee funds, is a company with whom I will NEVER do business or put any of my money, and there is a reason: They are a PRIVATELY HELD company. This means, not being publicly traded, they do NOT need to open their books and records like other brokerage houses, and they are NOT subjected to the same level of scrutiny accordingly. Does that mean that they are necessarily doing things that aren't above board? Of course not, but does it mean that it could give the appearance of impropriety? You betcha. After some business dealings with them of another nature, I decided once and for all I'd never invest with them as long as they remained a private company.

 

I don't even want to THINK about how you mention your time horizon. But we must all face our own mortality, whether we are faced with it or not.

 

In all cases, the right thing to do is to plan for all eventualities. This means preparing with the following:

 

1. A will for you and your spouse and/or significant other

but because a will is VERY insufficient....see number 2

2. A Living Revocable Trust (with an incapacity clause) for you and/or your significant other. A lawyer who tells you that you don't need this, or that they are ONLY for the VERY wealthy, is probably ill-informed, or lying to make money on your estate after you die.

3. A Living Will, Durable Power of Attorney for Health Care and an Advance Directive (forms and terminology may vary by state/commonwealth).

4. Guardianship (if you have any minor children)