Book Summary: Guide to Investing in Gold and Silver – Written by Michael Maloney

This is a great education book about real money. Mike reviews sound money principles that have lasted throughout human history. One thing is consistent and that is Gold and Silver are real money. In today’s world of fiat currencies, Gold and Silver are tools you can use to preserve and protect your wealth. Mike reviews the differences between currencies, real money and fiat money. Fiat currency is basically paper money not backed by anything. We will go into some detail on why this is dangerous and the average investor should at least understand the significance of debased money and bloated fiat currencies. With the 2008 economic meltdown along with Ireland, Greece and other bankrupt countries, we as small investors need to be educated so we can protect ourselves.

Why is this important to me?

This is important because the greatest wealth transfer is happening right now and that transfer is moving away from America and not toward us. This needs to be a priority if you want to protect yourself and your family.

Several things are happening but 90% of the general public does not truly understand it. This is understandable because of the noise between the political bobble heads on CNN and Fox News diverts the real issues. The real issue is this – The Federal Reserve is a private institution that is not regulated and not audited. They control the financial system. These guys are the quintessential king makers running the country in the background. Thomas Jefferson was admittedly against a central bank in the United States. For more information on this subject, you can listen to Ron Paul. He is the congressmen from Texas that is all over this stuff.

The big swings that we have seen from the Internet boom to the housing bust have been a direct result of the Fed. Not many people know this and some will bitch that this is wrong. The Fed has been keeping the interest rates artificially low which spawned the bloated housing market. The relaxed debt to equity and the financial instruments of mass destruction known as CDO’s & MBS’s and other weapons nearly killed the country. Financial education is needed for us little guys to have a chance. Read this book to get your eyes opened. One thing that is not being said in main stream media and is more potent than Terrorism is the following: If the dollar is lost as the world’s reserve currency then our total standard of living will reduce by a minimum of 25%. Right now it is already tough for 85% of American families. Another wealth transfer could put the last nail in the coffin. Get educated.

There is a ton of information in Mike’s book. The history of currency debasement is outlined from every major empire including Persian, Greek, Roman, British and now American. Currency debasement, inflation and taxation are the wealth stealers. If your money is a candle then taxes and inflation are the flames burning at both ends.

1. Ingenuity – I am not a doom and gloom person. I believe in the strength and resolve of the American people. This still does not hinder the fact that we all need to be educated and the only way to change is from the bottom up. There is no way top down government can benefit the country in this light. It is the iron horse ingenuity of the American people that will solve our financial issues.

2. Gold and Silver – Gold has been money for over 5,000 years. Its redheaded step sister Silver has also been known as money. The ratio between the two has been historically 16-1. I have personally seen that spread in the last year go from 80 to 1 down to 30 to 1 and it is back up to about 40 to 1. What this means is that you can by 40 ounces of silver for 1 ounce of gold. Thus silver is $35 per once and Gold is $1,500 per ounce. Now – reality check. Warren Buffett does not invest in Gold. If you have been following any of my book summaries then you know I am a Buffett fan so let’s look at this. Basically Buffett says that if he owned all the Gold in the world then he would have a 67 foot cube of gold (height, width, length for you beginning math majors). He could polish it and kiss it and sleep on top of it. Instead of the gold cube he could have half of the farm land in the U.S. plus 7 Exxon Mobiles plus a trillion dollars in cash. He would rather take the latter as I would. Basically Buffett is arguing that Gold has NO UTILITY. I agree with him. Silver on the hand is different. Buffett has owned silver in the past and still may own some. Silver does have utility because it is used in Cell phones, computers, smart devices and medical gadgets. This is why I love Silver as a means of savings.

3. Cash Flow vs. Capital Gains – We do not want to fall into the great fool theory and invest in Capital Gains. Well in true contradictory fashion, Silver is a capital gains investment. Anyway you need to look at all of you investments in a synergistic approach. This means that we want investments to spit off cash flow but we also want our savings to increase. Robert Kiyosaki states that savers are losers. Translated this means that if you hold onto dollars then you are losing because of inflation and currency debasement. Thus you can hold your savings in Silver.

Now let’s chat about holding “real money” as a wealth life preserver. Note: Get educated, I am not saying go out and invest in silver and gold today. I am saying get educated. I do personally invest in Silver and will continue to do so but it is a very volatile so you need to educate yourself. Also, I am not a financial planner and don’t give advice so please do your own homework. My goal is to simply help you with that homework.

1. Mountain of Debt – This book was written in 2007 BEFORE the subprime crash. Even then the U.S. was buried in a mountain of debt. Since then, the money supply has been TRIPLED by the Fed. Thus that Mountain just became Mount Everest. This happened in the last 3 years and that is why the dollar is at an all-time low in 2011.

2. Unfunded Liabilities – Social Security, Medicare, Medicaid……… These unfunded liabilities along with the mountain of debt just magnify the problem. When you give something to somebody and then try to take it away, all hell breaks loose. Take a look at GM. They had to go into bankruptcy, get a government bailout and renege on all their unfunded liabilities in order to survive. They are now doing pretty well but the little guy lost their pensions and medical care. Get educated my friends. Do not let other people manage your money… The same will happen to the U.S. with the unfunded liabilities. Start planning NOW.

3. Derivatives – We touched on this earlier but in a nutshell here is what happened in the subprime meltdown. Around 100 people sat in rooms and decided to sell MBS (Mortgage backed securities) to investors. The problem was they wrapped up crap and sprayed it with perfume and sold it as triple A rated instruments. The ratings agencies and the leadership of these companies should be prosecuted. What happened was that a 1-2% move in values could wipe out the companies because the Leverage was so deep. These guys were leveraging billions to make tens of millions. There are too many zeros for that to work in the long run. As we know now, it didn’t.

To summarize, what does all this mean? This book and others like it will help you take control of your own destiny. It is recommended that you should hold 10% of your assets outside the financial system. This means that there is no counter party risk. When you put all your money in the bank and there is a run on the bank and it fails, the bank is the counter party. Holding physical gold and silver as real money eliminates the counter party risk.

I hope you have found this short summary useful. The key to any new idea is to work it into your daily routine until it becomes habit. Habits form in as little as 21 days.

One thing you can take away from this book is GET EDUCATED. Please open your eyes and spend a few minutes per day educating yourself. You will be happy you did.

How to Save Beaucoup Money When Investing in Fixer-Upper Houses! 5 Tips on Learning to Make Repairs

Let your knowledge of how to repair investment properties grow like plants in a garden. Follow my tips and you will be prepared to respond to any problem.

Here is how I learn new skills:

Stick to Experts like Glue

Always be there to help when the handyman or contractors do work on the house. Ask questions. Make mental notes of how things work. For example, every time a technician works on my air conditioner, I am right there on the roof with them, I see how they analyze the problems, I asked them what the different components and parts are called, and I ask how to identify other types of A/C problems. Now I know what to look for, and I can do what he did, if the same problem arises.

Take Community College Classes

Community colleges offer a smorgasbord of useful classes for the fixer-upper investor. I have mostly taken classes in electrical wiring, but done some plumbing and woodwork too. The classes are at night to accommodate working persons schedules. No snoozing at the back of class during boring lectures because the classes are focused on hand-on learning.

Start a Library

Take to heart the old saying “A house without a library is like a body without a soul.” I own least 100 books related to real estate buying, selling, repair, taxes, and tenant management, as well as several how-to videos. Every time I am at a book sale, I always cruise the aisle with the real estate books and the aisle with the house repair books.

I have more house repair books than any other kind of book. Before I start a new project, I consult a book to show how the professionals demonstrate how to do it. During a project, when I get stuck, I refer to a book to find the answer to my problem.

Sometimes, when I’m not working on a project, I like to browse though my repair books to get ideas for the future.

Ask Help at Hardware Stores

I have always had better luck getting answers to my questions at smaller hardware stores, like ACE, rather than at the big box stores, like Home Depot. When I was learning to lay carpet, I got some good advise on how to secure the carpet to the floor from a sales person. The people who work there generally seem to have the hands-on experience to offer useful advice.

Internet

This is an area that I often overlook, yet it is potentially the most useful tool to find repair information.

To find out how answers to repair problems, I just type in what it is that I want to do on Google. For example, “I want to change a washer on a kitchen faucet”. Usually several good links pop up that offer solutions to my problem.

When you need help repairing your fixer-upper houses, don’t get frustrated, get prepared!

CNBC Investing – News on Business

CNBC investing could be interpreted in many ways; it could be that you are involved in trading using CNBC stocks. Well, it is a media entity and you are probably investing your time watching their updates from time to time relative to your business because it is naturally a business oriented news media. Having CNBC investing is a having a guide at which you will be making a decision in your business. CNBC investing almost covers all business entities around the world.

Source for Business Information

The network is a good source on a daily basis on business, they are very informative and you could have smart decisions using their guidance and publications. They are not biased that is why they are entrusted to inform business enthusiast ahead of time the things or scenarios on a particular country where status of that countries stocks are known and the trending of their markets. CNBC investing is purely of business concerns, with less of the other side of the news being of second priority as their slogan would say “first in world business”. Practically CNBC investing is a good source of business news.

People who gets bored with watching business news are people who do not have much concern about business, they may even say it’s none of their business where in fact, business news is suppose to be everybody’s business. Just take a look at what happened to the economy the recent years, the business community went down and it dragged a lot of people affected much of the living conditions. A lot of people didn’t saw that coming, not even some of the speculators in the stock market. A lot of businesses needed to close down, mass lay-offs of various companies took effect it was one of the worst conditions experienced not just in the business world but the whole country and eventually the whole world particularly economies that are tied with the economy of the United States.

Our Involvement

Now, what can we do to contribute to the development of the economy, this would rather be something that many people would say “leave it to the economists” but we are actually a part of it. This does not suggest that you watch CNBC investing news regularly or any other news media pertaining to business. What I am trying to tell you is that we can contribute by spending on what we need and save more for tomorrow; if you can think of something that you can earn from aside from employment, the better. There are times when your country would need you more than you need it, the successes of the individual in a country is also its success, it will not have many money if you don’t patronize what it offers. And how can you buy if you have nothing? Do you have to rely on your country to give you something all the time, think out of the box and improvise on how you would earn more than what employment can offer, CNBC investing may help.

5 Tips to Find Home Builders That Are Worth Investing

When planning to build your dream home, one of the first consideration is working with a qualified and experienced contractor. Choosing a home builder may be one of the most important decisions of the building process. Basically, there are three most popular types – the high-end custom home builder, the production builder, and the small builder. The trick lies in identifying which one is the perfect match for your requirements.

Here are a few tips designed to help you find best contractors to build your dream home:

1. Plan in Advance: To get the results of your choice, planning beforehand and knowing what exactly you want may help a lot. It may also involve deciding on whether you need a specialist or just a general contractor. This will also help you communicate with your builder in the best possible way as you know your requirements as well as limitations. Also planning on what services you expect from your builder such as the warranty period, record of dealings, and post delivery services can help getting the best results.

2. Research for Reputed Firms: Once you are aware of what exactly you want, you may consider going through the newspapers, journals, advertisements and online portals for more information. Searching for reliable home building companies through surfing online and registering for electronic messages can be of great help. You may also consider visiting seminars and home shows to get to know about some experienced as well as new home builders.

3. Ask Questions: After finalizing on certain home builders, assessing them to make sure they meet your specific needs can prove very beneficial. In order to assess them, you may consider asking a few questions such as how many years have they been in business, are they licensed and insured, what unique features they offer, can they custom build or change current designs, what type of material they use, how long the entire process will take and prices etc.

4. Do A Quality Check: Looking beyond the photographs and checking the quality of materials can help you make sure that it is worth investing. This may also require both research and site visits to have a clear idea whether or not the home builder holds a good previous record. You may also consider showing interest for any awards or recognition the company has got for providing outstanding quality to its clients.

5. Be Specific: Having things finished on time and within budget sometimes requires you to be specific. Keeping everything clear with your builder and having the structural calculations done by an experienced engineer can prove beneficial. Keeping an eye on who is going to supply the things like hardware, faucets, tiles, and other accessories, is good for your project. Being specific regarding what you need and how you want things to be done helps in long run.

Last but not the least, take the time to do your homework when it comes to choosing a home builder as every extra second spent will pay off in the long run.

Explaining Investing to Kids – Stocks, Proxy Statements

For my nephew’s 13th birthday, I transferred some shares of stock into a UTMA account for him under a dividend reinvestment plan (DRIP), and I’ve been using the investment as a teaching opportunity. Every time I get a statement or other correspondence about the investment, I forward it to him with a brief note explaining what it is and what it means to him and his investment. As I was crafting my latest email to him about the proxy statement we received, I realized that others trying to teach children about investing might appreciate reading my notes, too. So I lightly editted it to make a bit more cohesive for people without a knowledge of the background, and I offer it to you…

I got a message from Fortune Brands (Ticker: FO) and since you’re an owner, too, I wanted to share it with you.

In a small corporation like mine (I own an IT consultancy), I’m the sole owner, president, and most of the workforce. However, public companies like Fortune Brands are owned by thousands or even millions of individual investors like you and me. As owners, we get to control the company, but there are too many of us for everyone to be involved in the day-to-day operations – that would be crazy. Instead, we exercise our control by electing a board of directors to provide direction and guidance for the company. The board of directors hires a CEO for the company, and some of the other top officers, and those officers handle the day-to-day operations of the business.

You and I don’t participate in decisions about manufacturing, sales, shipping/receiving, hiring/firing of employees, payroll & benefits, business hours, or office locations – we leave that to the company’s officers, who are selected by the board of directors you and I elect. Since we don’t get involved in the daily grind, the company produces annual and quarterly status reports for us about its activities, successes, and failures. An annual Proxy Statement asks for our votes for the board of directors and for our input on a limited few additional important issues. We can submit our votes by mail or over the Internet, or we may attend the meeting in person in Illinois at the end of April.

I’ve attached the company’s 2010 Proxy Statement (omitted from this article), containing information about their upcoming shareholders’ meeting. It’s going to seem very confusing, but don’t worry – I don’t need you to read the whole thing – I just wanted to show you something on one page of it…

Board members have a limited term, so we’re voting to replace the ones who are expiring this year. Knowing who to vote for can sometimes be a difficult matter. Different people approach this different ways. All of the candidates being offered to us have been selected by our existing board of directors, so they are people that our board thinks we’ll like and will be a good fit with the other board members. For many owners, that’s good enough, and they just go with the board’s recommendation, especially if they’re happy with the way the company has been running. Other owners may do some research into the resumes and past experiences of the various candidates before deciding.

I approach it a different way: I want the board members to have my interest at heart, and that is that I want my investment to increase in value. To be sure that they have the same interest, I look for candidates who, themselves, have large investments in the company’s stock. If you open the attached PDF file and flip to page 60 (sorry, readers – just imagine it), you’ll find a table entitled “Certain Information Regarding Security Holdings” that reveals this information. The table shows the number of shares owned by each officer and director of the company, and by multiplying these numbers by the share price, I know how much money each of them has invested in the company. I only vote for those with sizable investments. Today, it was all of them, but I always check because I’ve occasionally seen candidates who own few or even no shares of the company.

Besides the election of directors, the proxy statement goes on to ask for our votes on several other items, such as approving an auditor, approving a change in voting requirements, and approving a plan to pay directors with additional stock. I like the way the board has been handling things, so I voted in favor of all of their requests.

There’s one last special item on the list, too. As owners of the company, you and I have a right to propose our own issues to be put forth to vote upon by the other shareholders. The last item on the list is one such proposal from another shareholder. He wants us to make a rule that anytime 10% of the shareholders feel strongly about something they may call a “special meeting” of all of the shareholders, rather than wait for this once-a-year regular meeting to discuss and vote on the matter. It’s the sort of thing you’d like to be able to do yourself, but it could start to get expensive and disruptive for the company to have to send out announcements, reserve auditoriums, and arrange flights and lodging for executives every time a vocal minority wanted to talk about an insignificant issue. I voted against it.

As the custodian for your shares, they sent me a single proxy statement for the total of both your and my shares, so I’ve already voted for both of us. In the future, when you’re old enough to control your own investments, the responsibility of voting on these issues will rest with you. If you have questions, I’m always happy to help.