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Gold is a Terrible Investment - According to Dave Ramsey

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NightOwl:
Didn't say he was right.  Just that it makes sense given his assumptions.  As for not applying the same risk analysis standard to stocks and real estate...  You'd have to ask him about that directly.

I like Dave, but of course he isn't perfect.

Gold and silver make more sense to me if considered outside of returns.  More as an extended emergency fund that isn't at risk from bank closure and won't be inaccessible in case of power grid failure.  In that case all they have to do is keep up with inflation.  But that might be another subject.

(Still haven't got around to listening to today's episode.  Maybe while I cook supper...)

ModernSurvival:
I understand what you are saying I also understood it when you said of Dave,

"Just that he has a really good point."

My point is no, he doesn't.  His point has been that gold has always been a bad choice, not that it is too high right now.  You see he can't say "it is too high right now" because it is totally inconsistent with his just buy funds all the time advice.  If you read the entire thread you will see I am not buying gold right now at this price point myself.  I think it is a bit high (short term) right now, I think (don't know) it will fall over the next 18 months in the bliss of the ass clowns spendulous program (the 700 billion is being spent in the election year not this one, shocking I know).

At the end of the next bubble though (a big and rather short one) is a lot of pain.  If you don't use some level of gold or silver to hedge for it I personally think you are missing a great chance to buy what could be the smartest insurance you ever purchase.

Dave is just plain wrong on this, I personally think he should stick to dealing with debt and stay out of investing.  His investment advice is actually terrible because it is one dimensional.  The only cash he advises is the 90 day emergency fund (which is good but not part of asset allocation in his world) and he recommend after that all stock based investments and all of it into 401s, IRAs etc.  So you get full exposure to the market and all the risks, nothing to hedge against something like what we are in now and will be in again.  Your wealth is all tied up until you are 59.5 or older, no real liquidity is preserved.

To those that have followed it over the past 10 years in Dave's own words, "how's that working out for you"?

ModernSurvival:
Oh and all should read this!  This is what gold/silver can do that no other investment can.  We do try to live that better life if times get tough or even if they don't, BUT we also accept that tough may be an understatement.  Gold and Silver give you options, options like this,

http://www.abcs-of-gold-investing.com/gold-book-ch-1.html

Hare of Caerbannog:
Just to interject one thought.
Gold hasn't actually increased or decreased in value.
This has been said by a lot of people but in 1810 an ounce of gold would buy you a fine hand made man's suit.
In 1910 an ounce of gold would buy you a fine hand made man's suit.
In 2010 an ounce of gold will buy you a fine hand made man's suit.
In all likelihood, in 2110 an ounce of gold will buy you a fine hand made man's suit.

Gold is wealth protection. Its a way to store money that inflation can't touch.
This is not a history since Nixon or FDR, its a history of suits and gold since technology allowed the mass production of cloth.
Temporary market fluctuations can go in any direction. Gold remains the safest way to protect wealth.
Kings come and go. Nations rise and fall.
Gold remains.

NightOwl:
OK I got to listen to the relevant part of today's podcast.  In it you pretty much said what I've been thinking.  Good job as usual!

I've read the story about the vietnamese couple before.  That alone is almost a good enough reason to have some gold on hand.  Even at half its current market price, a pocket full of gold would be enough to evacuate a family to another country.  Or keep that family fed for a long time in case of non-famine hyperinflation.

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