Gold & Findependence

silver-and-gold-bullionSince the price of gold crashed a few weeks ago, I’ve twice blogged on the topic over at MoneySense.ca, as you can read here. I’ve also done a bit of radio and TV commentary on the topic. As noted at MoneySense, personally I’m somewhere between the 5% “gold as insurance” camp and the “gold bug” camp that allocates upwards of 15 to 25% of a total portfolio to the yellow metal as a permanent strategic allocation in a well balanced portfolio.

My second MoneySense blog looks at Nick Barisheff’s just-released book, $10,000 Gold, a prediction which if it came true would mean a seven-bagger from the most recent post-correction price of $1460 or so. Of course, gold has started to recover from the shocking drop that grabbed the media’s attention earlier this month.

So how does gold fit in with the concept of financial independence? Historically, it has held its own in providing a degree of capital preservation. Anyone who experienced the hyperinflation of Weimar Germany or more recently Zimbabwe can attest to the value of “real money” when contrasted with mere pieces of paper that once promised to pay the underlying metal “to the bearer on demand,” but today are no more real than digits in a computer somewhere.

Bricks & Mortar are another tangible investment I like

So the question isn’t so much whether gold could possibly rise seven fold or ten fold from here, although that’s roughly what it DID accomplish over the past decade. The question is whether paper money backed only by governments with unlimited access to printing presses can continue to be perceived as having value. Just as real estate investors see value in bricks and mortar and the assured streams of income known as “rent,” so too do some investors feel comfortable having at least some of their wealth in tangible precious metals or comparable financial derivatives they hope will retain value if mere paper money falls in value (i.e. ETFs like GLD or SLV). As readers of Findependence Day know, a major subplot of the book is the conflict between Sheena’s desire for tangible bricks and mortar and Jamie’s preference for paper/electronic assets like stocks and bonds.

I’m a Capital Preservation Asset Allocation Bug

Does all this make me a gold bug? No, it makes me a capital preservation asset allocation bug: SOME gold, some cash, some bonds, some stocks and some real estate. And of course, that’s just the investment part of the equation. To this we should add employer pensions and Government pensions like Social Security or the Canada Pension Plan. If someone came to me saying they believed ONLY in their employer pension plan or ONLY in their Social Security or CPP pensions, I’d be just as worried on their behalf as I would be if they told me they had only paper money or — for that matter — only gold coins.

Together, this is my recipe for financial independence.

The vinyl records subplot in Findependence Day

vinylrecordsAs noted on Twitter, there have been a fair number of stories in the press lately about the resurgence of vinyl records: as recently as Friday morning on BBC World News.

When I tell people vinyl actually plays a big role in the subplot of Findependence Day, I usually get some blank stares. So I’ll summarize it here. The Jamie character is 28 years old when the action begins, which makes him an echo boomer or member of Generation Y. He carries an iPhone everywhere he goes and, like most of his generation, listens to music mostly via MP3s, although he also frequents traditional music stores to buy physical CDs and DVDs.

After he meets a financial planner (Theo) on the financial reality TV show, Jamie “gets religion” about guerrilla frugality, and starts brown-bagging it and visiting a vinyl record store in Boston. Ostensibly this is to save money but also because the proprietor is  a fee-only financial planner on the side, and recommended highly by Theo.

Will cloud-based music eventually vanish?

Jamie returns frequently for vinyl bargains and financial advice and ends up creating a hobby web site and selling vinyl through the site around the world. He starts blogging about the future of digital music, taking a bit of a “retro” approach as he champions the superior audio quality of the Boomers’ old vinyl records. He starts to fret that all the music held on the cloud and in mobile devices will eventually vanish. When a blog he writes entitled “The day the music died,” goes viral, his web site starts attracting interest from big social media sites, which spins the plot in another direction.

The other recurring theme in Findependence Day is real estate. This ties in to the vinyl subplot when Jamie decides to venture into commercial real estate, living in an apartment above a commercial unit that eventually becomes a vinyl-themed Internet cafe. When it too attracts attention for its franchising potential, the plot again advances. On top of all this, there are romantic complications, as Jamie’s marriage with Sheena encounters turbulence triggered — as is so often the case with modern couples — over disagreements about money.

You can read the first two chapters free at Amazon.com, which includes the very beginning of the vinyl subplot midway through chapter two, when Theo suggests Jamie should visit his friend Bobby at the Vinyl Cave.

Findependence Day USA now available on the Nook

product-device-nook-hdIn addition to the various e-book formats found at Trafford.com (see previous post), Barnes & Noble is now making the new US edition of Findependence Day available on the Nook, and at a slight discount to the regular e-book price of $3.99. Details here. Note that you can also peek at the first two chapters, table of contents and new foreword by Sheryl Garrett without having to commit to purchase.

P.S. I sometimes refer to the new American edition as Findependence Day USA to distinguish it from the original Canadian edition. However, the actual title in both versions is simply Findependence Day.

Findependence Day now available on iPad, iPhone, Kobo, Sony, iBooks, PCs

ipad-3-concept.pngThe new U.S. edition of Findependence Day is now available in e-book format for $3.99 in the major tablet formats:

Sony e-reader, Kobo, iBooks, iPad, iPhone, Stanza, Bluefire (OS & Android), Kindle and in PDF format for various Personal Computers. Go to Trafford.com here to order. Kindle version is from Amazon.com here.

Amazon Kindle reviews

Amazon-Kindle1Wanted to share a nice review on the Amazon Kindle site today about the new US edition of Findependence Day.

Here’s what Rob has to say:

A unique and well-written book that is doing something important….. it is teaching you more about becoming financially independent than anything else out there. The narrative story is easy to follow for those who would never read a financial book and a nice format change for those who would. Well worth it – enjoy. 

 

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