[su_quote cite=”Jim Rohn” class=”wwd-post”]”Formal education will make you a living; self-education will make you a fortune.”[/su_quote]
Dear FutureMoneyTrends.com Subscriber,
We had an amazing response to the email I sent out called ‘Money Education,’ here is a follow up with some of your questions. Some of my answers are fairly long so I don’t have a weekly update, but I will have one next week that discusses future trends I am researching.
I think today’s questions will hit really close to home for a lot of people, please reply for any further follow ups. I highlighted two of the most common scenarios I hear from members today.
Trend Mail Q&A
John: I just had an investment meeting with my Accountant and they suggested everything you have in the first paragraph of your email. I was laughing on the inside throughout the entire meeting knowing I would not be investing with them. I quit contributing to my 401k about a year ago due to the limited options for investing. I gave up on the tax shelter and company matching in order to put more money in to physical silver. I feel like I have reached a good amount of precious metals and want to start purchasing stocks such as BRI with some of my income. What is the best way to do so? Is it through Etrade? Or a company like that? How does the small guy, who only has $200-$400 a month to invest, invest in individual stocks economically? Thanks, I love all that your are doing.
Daniel Ameduri: John, thanks for emailing me this question, I think this exchange is going to help a lot of people. To start, the 401k’s limited options is one of the reasons why I hate them, however, if your employer is matching it, that’s a 100% return on day 1. Tough to beat that, so even if stocks fell 50%, you would still be at a break even on the money your employer matched, so consider the following. You may want to keep contributing and focus on 1/3rd U.S. blue chip companies, these are the Coca Colas and Exxons of the world, companies that are not going way. 1/3rd foreign, this will give you currency exposure, although I should mention a company like Coca Cola earns roughly 70% of its income from overseas. 1/3rd in a money market or a real estate investment if they offer it, this way you can either have some opportunity cash or own some more hard assets through a income producing real estate fund.
You stated that you are now comfortable with your precious metals holdings, that’s great! Keep buying a small amount on a regular basis as a place to save money. One of the best things about the precious metals is that they are private, lawsuit and IRS proof, they are simply no ones business.
If you are just starting to buy stocks, I would suggest buying very safe and reliable businesses like a Becton Dickinson (BDX). BDX even raised their dividend during the 2008 financial crisis, this company controls 70% of the syringe market and is a business that will survive whatever we are going to experience over the next 10 years.
Speculating is okay, but remember to only invest money you can afford to lose. To purchase BRI shares I recommend using Etrade so that you can purchase on their home exchange which is more liquid. I personally own shares on both exchanges, so there is nothing wrong with owning on the OTCQX, but I always prefer the Canadian exchange when given a choice.
Jasper: Do you guys recommend shorting treasuries?
Daniel Ameduri: I don’t short treasuries, the FED is openly manipulating that specific market and it could take years for that bubble to finally pop. Plus, when it finally does pop, all of your profits from shorting them will be in dollars. I think the best thing to do is just buy gold if you are bearish on the treasuries, buy gold and wait.
Matt: Are you still recommending Bitcoin as a future trend?
Daniel Ameduri: Yes, though it is the most speculative thing we have ever recommended, mainly because it is new and a natural enemy of all the government run fraud. Our Monthly bitcoin report was just released a few days ago. In our 10 page report we have a detailed update on bitcoin news, price predictions, useful links, informative videos and more. The report is only $9.99, this is a monthly subscription that you can cancel anytime. You’ll get a new bitcoin update each month if you continue your subscription.The updates include: What Bitcoin is & Bitcoin History. How to invest in it, current news for the month and predictions for the future. A personal email for you to contact with ANY questions you have along the way is also made to you. If this interests you please click here.
Yitzchok: Dan I bought Brazil Resources myself to add to my portfolio. Given that gold mining shares have plummeted as they have and as you mentioned in your video clip this morning, I was wondering why you recommended BRI instead of the GDX or GDXJ? After all the risk of owning one company is immensely greater than that of 30 in an ETF.
Daniel Ameduri: Yitzchok, This sector is way too risky to diversify like that, all you would be doing is spreading out your money on investments that are more likely to lose money than make money. The mining business is tough and most companies never pay off. I am a big believer in finding a few core companies, get to know them inside and out, and then become a business partner by owning shares.
Gabriel: First of all, thanks for all of the videos and great information you are giving to the public. I have learned a lot from your interviews. Keep up with the good work. I am emailing you because I need help…I am a 25 year old guy from Oslo, and I have a 9-5 job. I have already realized that I do not want to be doing that for the rest of my life. So I want to start taking actions…
I don`t have much to invest each month. Maybe about 4-$500 USD.
If you could answer these questions that would be great. Please feel free
to add anything else you want to say.
1) I only have about 130 ounces of American Silver Eagles. How much do you
think I need to see real gains?
2) What else should I invest in? And how long will it take to see those
3) How many shares of stock would you typically buy?
4) What website do you go to if you want to purchase stocks?
Daniel Ameduri: Gabriel, You are 25 years old, you have what every billionaire over 60 would give all their wealth up for, time. Even just $100 a month into a company like Intel which pays the highest dividend amongst world dominating companies could make you a very rich man in 3 or 4 decades. I know it seems like a long time, but thinking in decades is what will make you very rich.
As to the list of questions…
1. I think the real value of silver is headed to over $100 per ounce in the next 5 years. However, my long term belief is that in 15-20 years gold and silver will trade at very close ratios, I am talking about 1 to 1 even. So to address “is 130 ounces enough?” You just can’t think of it that way, you have to base your ownership relative to your net worth and income. Consider owning 20-30% in silver and then after that make it a point to buy other assets, specifically income producing ones.
2. Right now I can tell that you are facing a big hurtle that almost everyone faces, the need and desire for a big return quickly. Honestly you are far better off buying safe reliable dividend paying stocks at your age, this will practically guarantee you becoming a very wealthy man. Only put a small percentage into high risk, high reward type investments.
3. I don’t focus on shares, only dollar value matters to me. So for example, my son (3yrs old) buys $200 a month of a stock that trades for almost that amount, he is only buying 1 share per month, but he is buying 1 share of one of the best companies in the world. A 10% return on 1,000 shares or 1 share is exactly the same, the only difference is the dollar value.
4. I would go to Etrade. If you plan to purchase some larger companies, you can purchase them directly from the company at Computershare.com, the fees are ultra low.
Jess: Great article on deflation, I’ve also been studying it a lot lately, and while I think any deflation will be short lived, I was still happy to see you putting a balanced perspective out there. As for the conclusion regarding precious metals, one question: The physical demand for the metals is still very strong, particularly in the east. It seems entirely plausible that the Shanghai exchange could set the price of gold in the not so distant future. If the west is no longer able to set the price of gold, will a U.S. deflation really matter?
Daniel: Jess, if the U.S. sees deflation, then we are really looking at a global depression and I would suspect gold demand and more broadly, commodities as a whole would see dramatic drops in demand. The U.S. and the dollar is propping everything up including China, so IF we do have deflation, I think gold will hold its value relative to other assets. However, I think the FED will fight deflation at all costs, that would expose all the fraud and I think that is probably their #1 mission right now, defending the fraud in government and central planning economics.
I just finished up a great interview with Bill Murphy of GATA.org and will have it posted this weekend.
Editor in Chief, FutureMoneyTrends.com
Share Disclosure: I am long on every stock mentioned in this update