FISH | Financial Independence Seeking Happiness: Gold

Madness of Housing

Contender 1 Budget, Compound Interest, Dividends, downshifting, Gold, Investing, Mortgage 21:41

<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5zaf6Yvd60334ooDpU0DMdh_R6NUP35DNZV-wRpcmnv0YsmwQh4-I_izC2UwLYN3-YuebvlmVJCvgAjd8mrH1gukqPLBKeNsuk4wAT9p7tNs08TYvHPDgAWbeJ63uPHIAX8lAC_lNjmQP/s1600/Allocation.PNG" imageanchor="1" style=""><img alt="Plan your finances over a lifetime" border="0" height="85" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5zaf6Yvd60334ooDpU0DMdh_R6NUP35DNZV-wRpcmnv0YsmwQh4-I_izC2UwLYN3-YuebvlmVJCvgAjd8mrH1gukqPLBKeNsuk4wAT9p7tNs08TYvHPDgAWbeJ63uPHIAX8lAC_lNjmQP/s280/Allocation.PNG" title="Financial Independence Timeline Planner" width="280" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">How much should we allocate to housing? - Evaluation with the Financial Independence Timeline Planner</td></tr>
</tbody></table>
<ul>
</ul>
 
 
 
 
 
 
 
 
 
 
 
<ul>
<li>Buy or rent your way to financial independence - a tricky choice</li>
<li>Why we rented for so long and why we are now settling down</li>
<li>Creating an asset allocation plan</li>
<li>What does this mean to our asset allocation </li>
<li> What would we ultimately like our asset allocation to look like</li>
<li>What about your dream - have a play with the updated Financial Timeline Planner</li>
</ul>
<h2>
Why is housing so expensive?</h2>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhjh-Pvb4wgal0sAjvjyP6SMDySd4wmQRHjVXgrzu5sG1gUGYDgs52SwVco0n6wo8VscKc5uMyhgpFJgpfKxyhzrdsukbB9iHEZb7CWK11qwb6cJssuHOb8l9521TcOQzw48F1wNYpQso0m/s1600/P1030980.JPG" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img alt="Will it cost the earth" border="0" height="210" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhjh-Pvb4wgal0sAjvjyP6SMDySd4wmQRHjVXgrzu5sG1gUGYDgs52SwVco0n6wo8VscKc5uMyhgpFJgpfKxyhzrdsukbB9iHEZb7CWK11qwb6cJssuHOb8l9521TcOQzw48F1wNYpQso0m/s280/P1030980.JPG" title="A Dream Home?" width="280" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Your Dream Home? - Maison de Graves, Podensac France</td></tr>
</tbody></table>
Housing has been touched upon several times on this blog as it is a very emotive subject. Most likely it will be the biggest purchase and decision you will ever have. Just to make it difficult there is almost infinite choice combined with personal circumstances, desires and needs. 
 
<a class="titlex" href="http://getintheringwithme.blogspot.fr/2013/10/french-living-quelle-difference.html">French Living – Quelle Difference?</a> 
<a class="titlex" href="http://getintheringwithme.blogspot.fr/2012/08/round-5-157s-mortgage-or-rent-and-save.html">Early Retirement with a Mortgage?</a> 
<a class="titlex" href="http://getintheringwithme.blogspot.fr/2013/06/you-cant-take-it-with-you.html">You Can't Take It With You</a> 
<a class="titlex" href="http://getintheringwithme.blogspot.fr/2013/12/maintaining-wealth-ii-we-are-all.html">Maintaining Wealth II - We are all Investors Now</a>   
 
As for the Tribe our choice has been sitting on the fence saving all these years. Or last rental property 
was a three bed terraced house in London paying £1,400 per month for the privilege. 
taking the 25 times rule for the value of the property we come to a value of £420,000 ($700,0000) 
 
This house is now selling for £650,000 a 50% premium to the rental income - go figure. 
 
Now a a normal mortgage of 3.5X combined salary £650,000/3.5 = £185,000 annual household income. You need to be in (at least) the top ten percent of earners to afford this in the UK: 
<div class="separator" style="clear: both; text-align: center;">
<a href="http://static.guim.co.uk/sys-images/Money/Pix/gallery/2014/3/25/1395752138824/income-figures-treasury-009.jpg" imageanchor="1" style=""><img alt="" border="0" height="168" src="http://static.guim.co.uk/sys-images/Money/Pix/gallery/2014/3/25/1395752138824/income-figures-treasury-009.jpg" title="UK Income Deciles from HMRC" width="280" /></a></div>
Clearly a comfortable Financial Independence in a large city is a costly affair nowadays. 
<blockquote class="tr_bq">
The rule, “thou shalt not spend more than 30% of thy after tax income on
 housing,” has become impossible for the average person. I think we are 
becoming a “mac n cheese” nation. If the squeeze continues on the middle
 and lower classes, I'm afraid we are going to see a revolt of the 
masses. I'm also afraid that we will see blood in the streets. As a 
result the safest place to be will be on a small farm away from large 
populations. - Richard Russel </blockquote>
Should we have spent more than 30% of our net worth on what we considered expensive property - NO 
<h2>
What are we doing?</h2>
Our TRiBe decided we needed to live somewhere cheaper (south of France) where we have been renting for the past year whilst we have looked to finally buy. After a lot of searching around we have purchased a renovation project. Here is why: 
<ol>
<li>In our early years we moved around with work so buying a home at that time was not appropriate. Stamp duty adds up with multiple purchases. The paying off of university and car debt whilst building of savings (for some reason that felt right at the time) were prioritised.  </li>
<li>Renting allowed us to super charge our savings rate due to the following</li>
<ol>
<li>No renovation costs</li>
<li>Rent was lower than the interest ONLY payments on a similar mortgage </li>
<li>No buildings insurance</li>
<li>"Deposit" and "Stamp Duty" invested instead of "Spent"</li>
<li>Freedom to rightsize and right locate the property as our family grew in size and jobs changed <div style="text-align: center;">
 High property prices in the city meant than an interest only mortgage on a property was more expensive than renting  </div>
</li>
</ol>
<li>Our goal has been to gain financial independence through living frugally. We now live in an area where it makes sense to buy because of the following: </li>
<ol>
<li>Rents are higher than a mortgage</li>
<li>Owning the property outright eliminates interest rate issues and rental price increases</li>
<li>We do not need or want to be mobile - we are happy where we live and have a very good school for our children</li>
<li>We are able to buy some land (and water rights) with the property to grow some of our own food. We have the possibility to raise a small cash crop.</li>
<li>It is in a warm climate so heating costs can be brought down through solar installations and good insulation. </li>
<li>We are "giving up / diversifying assets" some income generating assets for a "family home" and "overall lower living costs". We believe this makes us more Anti-fragile (See book by Nicolas Taleb) <div style="text-align: center;">
We can currently reduce our current living costs through owing our property (at the expense of investment income). We are settling for less income but a more varied asset allocation.</div>
</li>
</ol>
</ol>
<h2>
How much should you allocate to housing or just rent?</h2>
My takeaway from 37 years without owning a property (admittedly some of those were in diapers) is that you need to really understand what will suit you and your family at that point in TIME. Just search for asset allocation on the web and you will be told this way or that way is best such as: 
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://www.imoney.ph/articles/assets/s.png" style="margin-left: auto; margin-right: auto;"><img border="0" height="123" src="http://www.imoney.ph/articles/assets/s.png" width="280" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Example from <a href="http://www.marketwatch.com/story/a-portfolio-for-all-seasons-2013-07-19" target="_blank">MarketWatch</a></td><td class="tr-caption" style="text-align: center;"> </td><td class="tr-caption" style="text-align: center;"> </td></tr>
</tbody></table>
What is REALLY best is being in the right asset at the right time whilst hedging risk. 
 
DIVERSIFY and PRIORITISE/GAMBLE. If only it was that easy and we knew what The.FuTuRe was up to! Unfortunately we cannot all be a Warren Buffet or a Geroge Soros but what we can do is make sure we are knowledgeable, why we are accumulating it and the associated risks. 
 
A well researched strategy, a good set of rules that you adhere to (such as stop losses and booking gains) and try at all times not to become attached or emotional about investment will go some way to being successful.  
<h2>
Our asset allocation</h2>
<h3 style="text-align: center;">
Before the purchase of the property</h3>
Income Portfolio (29%)   -  Dividend Value Growth Stocks to pay for living costs 
Growth Portfolio (9%)     -  High growth hence risky investments 
Protect Portfolio (26%)    -  Cash and Commodities 
Pensions - Final salary (36%) - Cannot touch until 55 years old (allocation too high)!!! 
<div style="text-align: left;">
 </div>
<div style="text-align: left;">
To put some perspective on this we are living frugally (with 2 kids!) Our current living costs are £1,500 per month (£540 of which is rent). Our estimated living costs after property purchase £1,050 per month (higher costs for insurance of the property and taxes etc.) and we want to reduce this further. 
 
On the flip side we would be better off income wise but worse off diversified by carrying on renting</div>
<h3 style="text-align: center;">
 
After Home Sweet Home purchase</h3>
Income Portfolio (24%)   -  Dividend Value Growth Stocks to pay for living costs 
Growth Portfolio (2%)     -  High growth hence risky investments 
Protect Portfolio (6%)    -  Cash and Commodities 
Pensions - Final salary (36%) - Too high and cannot touch! 
Property / Miscellaneous stuff (32%) - All cost but significant possibility of capital appreciation 
 
...... The pensions are in the stock market and could be considered part growth and income with some fixed income bonds. Ultimately we are aiming for our investment portfolio to mimic the Permanent Portfolio outlined by Harry Browne - 25% Cash, 25% Bonds, 25% Stocks and 25% Commodities so will be focusing on re-building our cash position after the house is done. 
<h2>
Dream </h2>
What would you like to own and when, how do you see The.FuTuRe settled in one place or moving about. Do you want to own a house or your own business..... Will this give you a framework for a goal / challenge and perhaps a straw man plan. These dreams are your long term goal. The are the basis for your final and current personal asset allocation. Work backwards from your goal to work out how to get there. 
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://sites.google.com/site/lifeplanltd/home/TimeLine_Financial_Permanent.xls?attredirects=0&d=1" style="margin-left: auto; margin-right: auto;" target="_blank"><img alt="Click Here To Download" border="0" height="85" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5zaf6Yvd60334ooDpU0DMdh_R6NUP35DNZV-wRpcmnv0YsmwQh4-I_izC2UwLYN3-YuebvlmVJCvgAjd8mrH1gukqPLBKeNsuk4wAT9p7tNs08TYvHPDgAWbeJ63uPHIAX8lAC_lNjmQP/s280/Allocation.PNG" width="280" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><a href="https://sites.google.com/site/lifeplanltd/home/TimeLine_Financial_Permanent.xls?attredirects=0&d=1" target="_blank">Click Here to Download the Financial Independence Timeline Planner</a></td></tr>
</tbody></table>
 
Peace, prosperity and happiness 
 
CoNTeNDeR 
 
Welcome New Readers! Please take a look around.<a href="http://getintheringwithme.blogspot.com/p/about-me.html" target="_blank">Click here</a> to find out more about THE.TriBe and the blog is or perhaps browse the <a href="http://getintheringwithme.blogspot.com/p/all-posts-get-in-ring.html" target="_blank">all posts list</a>, Please feel free to play with the <a href="http://getintheringwithme.blogspot.com/p/muff-tools-and-check-lists.html" target="_blank">planning tools and checklists</a>. If you liked this post can you please spare a few seconds to share it?

Madness of Housing

How much should we allocate to housing? - Evaluation with the Financial Independence Timeline Planner Buy or rent your way...

Learning from THE.PaST

Contender 0 Black Swan, Critical Thinking, Dividends, downshifting, Early Retirement, frugality, Gold, health, Oil, Silver, stock screen, Wheat 19:37

Learning from THE.PaST

A cold start to the year? THE.FuTuRe : "CHUMP you still there? Learn from me and THE.NoW forget THE.PaST he is a has been, now l...

The Ride of a Lifetime

Contender 0 Black Swan, Critical Thinking, Dividends, Gold, Inflation, Oil, Saving 18:10

The Ride of a Lifetime

Our Fire - A warm fuzzy feeling what about 2013? *CHUMP - Fool, loser, muppet, victim of THE.FuTuRe, loner, weirdo, odd, strange, picked...

Maintaining Wealth II - We are all Investors Now

Contender 0 Black Swan, Critical Thinking, Dividends, Finance, Financial Armageddon, Gold, Inflation, Investing, Saving 16:03

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMT2LXXCUY23luSE5CxLn1XbS9-pqgbFpdkGkAGC9f6iS6tV8ZfI1oRSjy5P8pziPUudmLQ4mba0y1X5t_Cu7Z8fCibTcuEB86odvzRID7Uge_aI4-iLlTjqEswajXX2b_pWMvk9CVdDl6/s1600/InvestmentChoice.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="189" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMT2LXXCUY23luSE5CxLn1XbS9-pqgbFpdkGkAGC9f6iS6tV8ZfI1oRSjy5P8pziPUudmLQ4mba0y1X5t_Cu7Z8fCibTcuEB86odvzRID7Uge_aI4-iLlTjqEswajXX2b_pWMvk9CVdDl6/s280/InvestmentChoice.png" width="280"></a> 
TiMe: "Dring, Dring, TiMe to wake up sheeple" 
 
THE.FuTuRE: "Shussssh! They are sleep walking towards a cliff. We are providing wonderful <strike>distractions</strike> entertainment for them. Just look at all of their happy faces. Everything is great. There is no need to think just enjoy! Until I am ready to claim my pound of flesh MurrrGH HA HA HA" 
 
CoNTeNDeR: "Oi you evil B****** we the people will not stand for your bull****. We are waking up in our droves, turning off the entertainment and thinking about what you are up to. Financial freedom from your tyranny.  We are  lemmings no more and are turning away from the cliff - watch out below FuTuRE" 
 
In <a href="http://getintheringwithme.blogspot.com/2013/12/maintaining-wealth-i-bitcoins-and-real.html" target="_blank">Part 1</a> of this post we had a look at Paper Money, E-currency, Commodities, Real Estate and bonds. Today we are looking at Stocks, Land and investing in oneself as additional wealth preservation options worth considering. 
 
Stocks - Growing Profits? 
 
What
 value can you give to a company, let alone picking the winners in the 
stock market? This issue has flummoxed investors for years. 
 
Owning
 part of a company gives you an interest in that company's profits. 
Provided the profits keep rolling in due to a competitive advantage, the
 company should have some longevity. 
 
Perhaps looking 
for companies that have a distinct brand, product or advantage such as 
extremely difficult barrier to entry are the place to be. Those 
companies will grow in value along with their sales and / or return some
 of that profit back to shareholders through buybacks or dividends. 
 
Companies generate wealth - can you pick the right ones? THE.ConTeNDeR is trying see the <a href="http://getintheringwithme.blogspot.fr/2013/11/screener-for-value-and-dividend-stocks.html">Screener for Value and Dividend Stocks Here</a> 
 
For a seasoned professionals take on stocks for the long term, check out some articles by <a href="http://www.investmentu.com/2013/October/a-near-perfect-portfolio.html" target="_blank">Alex green from InvestmentU</a> and I am a fan of his book <a href="http://www.amazon.co.uk/gp/product/0470598204/ref=as_li_qf_sp_asin_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=0470598204&linkCode=as2&tag=thecontfinain-21" id="static_txt_preview" target="_blank">The Secret of Shelter Island: Money and What Matters</a> 
Warren Buffet even has a <a href="http://www.ivillage.com/warren-buffett-teaches-money-lessons-kids-cartoon/6-a-533797" target="_blank">cartoon series for kids on investing</a>. 
 
Tribe's opinion - Stocks allow the building of a diversified set of businesses. If stocks were not available it would probably be difficult to invest in diverse ideas such as graphene, new drugs and technology companies such as Google. Core holding. 
 
Arable Land 
 
An interesting investment class in THE.CoNTeNDeR's
 opinion. Precious renewable resources can be harvested from arable land
 year after year making it a very profitable investment class.  
 
Invest
 in woodland and you get free winter fuel and can sell the excess. 
Farmland can be planted for delicious fresh vegetables to be sold down 
the market. 
 
THE.ConTeNDeR likes the idea of some
 arable land next to his house. From a purely financial independence 
perspective 'free' heating, vegetables and eggs would reduce our living 
costs substantially. 
 
The <a href="http://www.transitionnetwork.org/" target="_blank">Transition network</a>
 are keen on this concept to help preserve the planet and combat 
resource depletion. They do a good bit on supporting communities as 
well. 
 
Tribe's opinion - We really think owing a bit of land even if it is used by someone else is a good idea and something we are looking at for THE.FuTuRe

Maintaining Wealth II - We are all Investors Now

TiMe : "Dring, Dring, TiMe to wake up sheeple" THE.FuTuRE : "Shussssh! They are sleep walking towards a cliff. We are pro...

Maintaining Wealth I - Bitcoins and Real Estate

Contender 2 Black Swan, Critical Thinking, Dividends, Finance, Financial Armageddon, Gold, Inflation, Investing, Saving 20:18

<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMT2LXXCUY23luSE5CxLn1XbS9-pqgbFpdkGkAGC9f6iS6tV8ZfI1oRSjy5P8pziPUudmLQ4mba0y1X5t_Cu7Z8fCibTcuEB86odvzRID7Uge_aI4-iLlTjqEswajXX2b_pWMvk9CVdDl6/s1600/InvestmentChoice.png" imageanchor="1" style=""><img border="0" height="189" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMT2LXXCUY23luSE5CxLn1XbS9-pqgbFpdkGkAGC9f6iS6tV8ZfI1oRSjy5P8pziPUudmLQ4mba0y1X5t_Cu7Z8fCibTcuEB86odvzRID7Uge_aI4-iLlTjqEswajXX2b_pWMvk9CVdDl6/s280/InvestmentChoice.png" width="280"></a></div>
THE.FuTuRE: "Contender you wuss, what is all this talk about income, growth and protection investments. I will take it all from you eventually. I have time on my side" 
 
TiMe: "Tick Tock, Tick Tock" 
 
CoNTeNDeR: "Precisely FuTuRe I have no idea what you are really up to. Heck I had a guess at the outlook for the year and how did that come out.....so I need a bit of diversification because of all of your conniving, plotting and outright corruption!" 
 
We are living in very interesting times especially with regards building and maintaining wealth. 
 
In this post we cover the TRiBe's options for investments in currency, commodities real estate and bonds with examples and opinions on some of the pro's and con's? 
<blockquote class="tr_bq">
 "You have much more opportunity 
to earn money than you do to 'not spend' money, and yet most people spend hours 
upon hours clipping coupons and perusing daily deal sites instead of 
brainstorming how to earn more money and solve 
people's problems." - Susan Fujii</blockquote>
In the second post we will be looking at other investment classes such as stocks and yourself followed by the TRiBe is current thinking. 
 
Paper Money Supply - Blind Faith? 
 
Since 1970 when Nixon took the world off the gold standard there has been no anchor to excessive money / currency creation. Governments have control over the supply of their currencies and they can determine the ultimate value of the currency in circulation depending on the amount in circulation. 
 
Previously if people wanted to save their labour and future buying power through the means of a currency, they could chose a checking account. It earned interest that was enough to offset any excessive increase in the currency supply. This is certainly not the case at the moment, interest rates are artificially low and people are being 'guided' to riskier investments for a return. 
 
One may ask but why is the currency supply increasing above the increase in productive capacity of the economy. Unfortunately this is easy to attribute to governments' fiscal irresponsibility. Excessive overspending is used to buy votes from the electorate. 
 
Alternatively if a country has strong institutions, low spending and fiscal responsibility - holding that countries currency is less of a concern. 
 
Fiat Money is covered by <a href="http://www.amazon.co.uk/gp/product/B005GSYZRA/ref=as_li_qf_sp_asin_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=B005GSYZRA&linkCode=as2&tag=thecontfinain-21" id="static_txt_preview" target="_blank">Currency Wars: The Making of the Next Global Crisis</a> by James Rickards, and <a href="http://www.amazon.co.uk/gp/product/0718192141/ref=as_li_qf_sp_asin_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=0718192141&linkCode=as2&tag=thecontfinain-21" id="static_txt_preview" target="_blank">Paper Promises: Money, Debt and the New World Order</a> by Phillip Coggan. There is also a good video to watch by Warren Buffet highlights how <a href="http://www.youtube.com/watch?v=5DvuyvuHmJI" target="_blank">countries get into trouble in the first place</a>. 
 
See the video series <a href="http://www.youtube.com/watch?v=DyV0OfU3-FU" target="_blank">Hidden Secrets of Money</a> by Mike Maloney 
 
Tribes opinion - it is so easy to transact in paper money and in the governments interest to keep them in place we will always keep some in our portfolio. 
 
Electronic Currencies - How Many? 
 
We now have alternative currencies such as Bitcoin and Litecoin hitting the news wires for their massive gain in relative value to reference currencies such as the US dollar. 
 
Firstly there are many people in favour to the inbuilt scarcity of the digital coins. Secondly they are not issued by any government and they are scattered globally that make them uniquely difficult to manipulate. 
 
One thing that is a red flag to THE.ConTENdER is what stops an unlimited amount of new versions of electronic currencies being created? 
 
Will the herd just jump from e-currency to e-currency chasing gains - see a list of them <a href="http://en.wikipedia.org/wiki/List_of_cryptocurrencies" target="_blank">here (10 listed)</a>? THE.CoNTeNDeR thinks this is highly likely until the number of e-currency options goes to infinity or faith in them is destroyed. Their value will go the same way as fiat currencies trending towards their intrinsic production value of close to zero. 
 
What may save them is if the herd all commit to ONE e-currency. 
 
One thing preventing this e-currency utopia is ... human nature. We are opportunistic and after an easy meal / fast buck. Our prehistoric past moulded us that way. When we were being chased by sabre toothed tigers whilst eeking out an existence coming across a free lunch in the form of a dead Mammoth. 
 
Will everyone commit to one e-currency? I would like to think it could happen but who can tame  human nature. Will we have to live in a dystopian future where we all take the happy pill to keep us controlled? 
 
Zero hedge recently <a href="http://www.zerohedge.com/news/2013-11-27/presenting-bitkillers-these-are-richest-holders-bitcoin" target="_blank">reported that 100 people hold 20% </a>of the bitcoin currency - a new type of Ponzi scheme in the making? Create a new e-currency holding a large percentage of the issue then cash in and move on as the perceived value burns. Who is left holding the proverbial handbag - the new entrants - good luck or what a good SUCKER!- THE.FuTuRe would be impressed! 
 
See this <a href="http://www.youtube.com/watch?v=T_hBhymFfm8" target="_blank">utube documentary on bitcoin</a> 
 
Tribes opinion - Speculative and almost impossible to value - mine some coins by all means* but only purchase if you have some spare gambling money :) 
 
* THE.CoNTeNDeR has had a go at mining. The setup is a pain, it is geeky, based on lots of technical know how. To mine alot of coins and to really exceed requires specialise mining rigs - a currency for the people - you must be joking! 
 
Next up commodities

Maintaining Wealth I - Bitcoins and Real Estate

THE.FuTuRE : "Contender you wuss, what is all this talk about income, growth and protection investments. I will take it all from you ...

Get Real

Contender 0 Compound Interest, Early Retirement, financial freedom, financial independence, Gold, Investing, Oil, Schiller PE10, Silver, Wheat 14:40

<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="http://www.munknee.com/wp-content/uploads/2009/10/commodities.jpg" imageanchor="1" style=""><img border="0" height="145" src="http://www.munknee.com/wp-content/uploads/2009/10/commodities.jpg" width="200"></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Real Stuff (munkee.com)</td></tr>
</tbody></table>
 PLAN.AHEAD: "Where have you been CONTENDER we need to get on with your training?" 
 THE.CONTENDER: "THE FUTURE caught our little tribe out with the evil flu but we are back in the game now" 
PLAN.AHEAD: "Right C your NEW training program is called LEARN.SOMETHING.USEFUL" 
THE.CONTENDER: "Is it going to help me defeat THE FUTURE?" 
PLAN.AHEAD: "Now don't get carried away. One step at a time. I have so many things you need to learn. What I need from you is Focus, Listen and Actually Understand, Take your time and let it all sink in" 
THE.CONTENDER: "Yes master tell me tell me I want to know the secrets of the FINANCIAL.INDEPENDENCE.SHIELD and the HAPPINESS.PUNCH (hopefully it is alcoholic ;) 
 
In this post a thesis that the next 30 years are going to be very different than the last 30 years (à la <a href="http://www.peakprosperity.com/" target="_blank">Chris Martinson</a>). In particular considering investing in REAL NECESSITIES instead of passive INDEX investing. 
 
Next post will provide a new stock screening tool that analyses up to 3000 stocks at a time AND an update to CERP - financial planning tool to incorporate an individual stock analysis dashboard as well as a 10x boost to the speed of the tool! 
 
 
<table border="0" cellspacing="0" cols="2" frame="VOID" rules="NONE">
 <colgroup><col width="86"><col width="86"></colgroup>
 <tbody>
<tr>
 <td align="LEFT" height="19" style="border-bottom: 1px solid #000000; border-left: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000;" valign="MIDDLE" width="86"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbxUSFUBZ1e6nmSPxwrx8DhDQogLpvw4s2xpmwDJwzcJTmmuI9AcPLrO-wmIj5CzcsG2Js5Z0FFkVM6s19XCGDdHOc8lZ1IaXg0eg5E2kuAFCRcqt0MzjlWmGaFMlqhtfKWWq_4ZuREG9V/s1600/StockAnalysis.JPG" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbxUSFUBZ1e6nmSPxwrx8DhDQogLpvw4s2xpmwDJwzcJTmmuI9AcPLrO-wmIj5CzcsG2Js5Z0FFkVM6s19XCGDdHOc8lZ1IaXg0eg5E2kuAFCRcqt0MzjlWmGaFMlqhtfKWWq_4ZuREG9V/s200/StockAnalysis.JPG" width="200"></a></td>
 <td align="LEFT" style="border-bottom: 1px solid #000000; border-left: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000;" valign="MIDDLE" width="86"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixsW1tSr0uN17TLT7YiYcKtYe85tEElmonx8j-4pxdjhZBPdm5DPx8ZODkvNJsvmxcy6TCDMaBhezwmRd-h6LIRb-woGDrLm2FGQnyI-Wt9Xlkf89JmH7h9Bkd2xTE8kcJ5k5Fnc87RZsh/s1600/Stock+Screener.JPG" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="90" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixsW1tSr0uN17TLT7YiYcKtYe85tEElmonx8j-4pxdjhZBPdm5DPx8ZODkvNJsvmxcy6TCDMaBhezwmRd-h6LIRb-woGDrLm2FGQnyI-Wt9Xlkf89JmH7h9Bkd2xTE8kcJ5k5Fnc87RZsh/s200/Stock+Screener.JPG" width="200"></a></td>
 </tr>
<tr>
 <td align="LEFT" height="19" style="border-bottom: 1px solid #000000; border-left: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000;" valign="MIDDLE">Stock analysis of debt, dividend sustainability and the dividend discount model for intrinsic value evaluation</td>
 <td align="LEFT" style="border-bottom: 1px solid #000000; border-left: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000;" valign="MIDDLE">Stock screener for company quality and return on capital</td>
 </tr>
</tbody>
</table>
 
Return of Capital 
<blockquote class="tr_bq">
"It not the return on capital but the return of capital" - Jim Rodgers 
 
 "The first rule of investing has always been don't lose money!" - Warren Buffet</blockquote>
 
For those seeking very early financial independence we need to to grow money faster than inflation and build up a passive income. 
 
In order to do this THE.CONTENDER has looked to first understand what is money and investing (after making a few mistakes) before taking the plunge into the stock market. 
 
Ever since our Tribe started to invest in precious metals in 2005 (a very small amount after talking to an investment banker at a party and being inspired by his outlook on investment) we have been interested in what is money? Why is it valuable? Why does it lose its value over time? 
 
We want our savings to AT LEAST buy comparative goods in the future. $10 for a bag of potatoes today + bank account interest should cost $10 in five years time. 
 
If we are growing our money what is the REAL return after inflation? 
 
10 years ago you could get a loaf of bread for 0.5 monetary units,  now it costs 1.5 monetary units in only 10 years! Supposedly technology has improved so the cost of my loaf of bread should be coming down right??!!!: 
<ol>
<li>Transport is more efficient (we mix truck loads to get max fill / weight ratios with complex computer programs and collaboration across multiple companies)  </li>
<li>Energy is captured and recycled in the baking process  </li>
<li>Agriculture productivity is up - better machines, fertilizers and weather prediction systems....  </li>
<li>Waste is down due to efficient inventory management and improved sales forecasting.  </li>
<li>Competition is rife and profit margins are being reduced  </li>
<li>The USA is going to be energy independent and oil and gas prices are going to plummet!</li>
</ol>
Why Why Why has the cost of my loaf of bread trebled after all of these cost saving improvements? Why is THE.CONTENDER paying so much more for the basics of life compared to 10 years ago. Inflation has been reported as very low.....????

Get Real

Real Stuff (munkee.com) PLAN.AHEAD: "Where have you been CONTENDER we need to get on with your training?" THE.CONTENDER: ...