by John Young
I was noticing that the price of gold today is a tad over $1,400 per ounce. I know a lot of people are interested in buying gold, but I want to give you some alternative ideas.
True, gold tends to be a hedge against inflation, maintaining its value in real terms. But this maintenance of value assumes a fully functioning economy. Without a fully-functioning economy in which gold can be exchanged for dollars or other currency … what is it’s intrinsic value? You can’t eat it, drink it, heat your home with it, defend your family with it or fertilize your garden with it. Well, maybe, because it is heavy, you could weight a club with it. And if you are a dentist you could use it to make fillings. If you are an angler, you could use it to make fishing weights. If you are a jeweler you could use it to make pretty baubles.
But the reality is that gold is not a very useful item in anything less than a fully functioning economy. If all the roads leading into your town were shut down tomorrow and would remain so for the next 5 years; gold wouldn’t be worth much unless everyone agreed to use it as a currency. Instead, goods and services that enhanced other’s productivity, sustained them, and added value to their lives would have value. A ham radio would have value for communication, a rifle would have value for hunting and defense, an ax would have value for myriad purposes.
So, what can you do with $1,400 to enhance your wellbeing instead of buying an ounce of gold?1. Develop useful skills
You could earn a certificate in Basic Electronics or as an Electronics Technician, you could learn basic or advanced Web Design, you could earn a Gunsmithing career diploma or similar skills as a locksmith. And that is just for starters.
Skills are valuable. Perhaps, right now, you are a “Accounts Receivable Government Contract Compliance Specialist III.” And if you like it and it pays, that’s great. But why limit yourself to just that? Why allow a career path to define your limits? In my experience, most people assume they have limits where they truly have none. And the more you know and the more skills you have, the more angles you can see in even ordinary situations.
There are literally HUNDREDS of classes you can take via correspondence from accredited schools in the comfort of your home and at your own pace that cost well under $1,000.
The fact that these might not translate to a conventional career doesn’t mean they wouldn’t ultimately be a lot more valuable to you than an ounce of gold.
2. Pay down debt
Debt is a real burden. If you’ve ever had a credit card, you know that even if you only owe them $10, they’ll assess you a $35 fee if you are even one day late. And if you are much later than that, they will call you as many times daily as the law allows disturbing your tranquility and stressing you out.
When you owe money, they own you. It’s really that simple. Buying back your life is a straightforward decision. Find whatever you owe that is the least amount of money, and use that $1400 to pay it off. Then, add what you would have paid that creditor monthly to the payments you send another creditor to pay it off faster.
Even if it is just one debt monkey that you can get off your back, it is worth the peace of mind.
3. Stop paying fees to the bank
I’m sure it has happened to you at some point. You have two accounts, one of them has plenty of money, and you allowed one to get too low. The next thing you know, the bank assessed hundreds of dollars in fees in one fell swoop. Ouch.
The bank is clever about this because they process items in such an order as to maximize the fees they can assess. So if you have $30 in your account, and make purchases for $20, $10, $5, $5, $3 and $1; instead of processing the smaller items first and assessing you a $35 fee for just the $20 transaction, they will process the larger items first so they can hit you with $140 in fees for being overdrawn by $14.
Banks in the U.S. are making $17 billion annually on just these fees.
But there is a way out of this trap.
Plop that $1400 in a savings account, and then go down to the bank. They make you do this in person so it is inconvenient. You fill out a form that links that savings account to your checking account in such a way that any shortages in the checking account are taken from the checking; and the fee for this is only $5 for any day that it occurs, no matter how many transactions are involved.
The average bank customer pays $212 annually in overdraft fees. This means that your investment of $1400 will pay you $212 annually — that’s a pretty much guaranteed 15% return. And FDIC insured to boot.
You should also, incidentally, strongly consider switching to a credit union. On average, credit union members pay less than half the fees of bank customers.
4. Buy something that is actually useful
Buy something that is useful. Outfit yourself to prepare the best self-sufficiency garden ever. When you are the only person in town with food, you’ll also be the most influential person in town. Also, home-grown food is healthier.
Or, you can get tools to assist you with auto repairs that will augment skills that you have learned in auto repair.
Or, you can get an amazingly comprehensive electronics lab complete with everything needed for PCB fabrication and more.
Or, you can even set up a pretty respectable chemistry lab. (Though, of course, you should be well-educated before doing so.)
Or, you can get everything you need for a small-scale home winery.
Or, you can buy a musical instrument and pay for several months of lessons.
[u5. Donate it to EAU[/u
If you are at your wit’s end and still can’t think of anything useful to do with that money … hit the “Donate” icon in the left-hand column. EAU is staffed entirely by volunteers and not a penny of contributions is wasted.
You know we’re fighting the good fight for a sacred cause. $1,400 goes a long ways with us, and would truly be much more useful for us than for organizations that have to pay salaries and such. You’d get a tremendous bang for your buck — about 5x as much bang as giving to most charities.
Even today, $1,400 is a lot of money. Though I can appreciate gold as a hedge against inflation and have a little bit of precious metal set aside; in general, I think there are far better uses for $1,400 than in a chunk of metal.