Golden Rules of Financial Safety (1999) • Hacker News Board

Re: Golden Rules of Financial Safety (1999)

#31

Post by cpursley » Mon, Oct 30, 2017, 5:03 PM UTC

pattle wrote: post #17

simplerufus wrote: post #9

#13 - Keep some money overseas How exactly is this possible? I am a german citizen and resident, and after hours of reaearch a few months ago i couldn’t find ONE bank in the world I could open a bank account with. I always have to be at least a resident. Did anybody figure this out? My partner is from Canada and I would love to park some money there, but I couldn’t figure out a way to do so.

Why not store the money in Bitcoin instead? It's outside of government control and you should get a nice return on your investment.

Downvote for "should"

Re: Golden Rules of Financial Safety (1999)

#32

Post by jordanlev » Mon, Oct 30, 2017, 5:04 PM UTC

> Rule #11: Create a bulletproof portfolio for protection.

> The portfolio should assure that your wealth will survive any event — including an event that would be devastating to any individual element within the portfolio. In other words, this portfolio should protect you no matter what the future brings.

> It isn't difficult or complicated to have such a portfolio this safe. You can achieve a great deal of diversification with a surprisingly simple portfolio.

What could such a portfolio be? Cash in a savings account? (Genuine question from an investment novice -- I always thought any investment was risky to some extent).

Re: Golden Rules of Financial Safety (1999)

#33

Post by kbutler » Mon, Oct 30, 2017, 5:04 PM UTC

garyrichardson wrote: post #13

> Your investment plan should be aimed, first and foremost, at preserving what you have—preserving it from investment loss, government intervention, or mismanagement. The advice is decent and normal, but I really love how regular advice is "colored" with libertarian perspectives.

May as well replace "libertarian" with "global" or "historical".

See hyper-inflation (e.g. Germany in early 20th century and others now) or government takings like Zimbabwe confiscating farms.

If you think it can't happen in a modern democracy, see https://en.m.wikipedia.org/wiki/Executive_Order_6102 where the US outlawed private ownership of gold in 1933 to enable debt reduction by devaluing the currency.

Re: Golden Rules of Financial Safety (1999)

#34

Post by snikeris » Mon, Oct 30, 2017, 5:04 PM UTC

garyrichardson wrote: post #13

> Your investment plan should be aimed, first and foremost, at preserving what you have—preserving it from investment loss, government intervention, or mismanagement. The advice is decent and normal, but I really love how regular advice is "colored" with libertarian perspectives.

It's just being practical. Governments mismanage their economies, seize the assets of innocent people, etc. If you're serious about preserving your wealth, government intervention should factor into your decisions.

Re: Golden Rules of Financial Safety (1999)

#35

Post by metalliqaz » Mon, Oct 30, 2017, 5:04 PM UTC

wiredfool wrote: post #14

metalliqaz wrote: post #5

Advice: Just do dollar cost averaging in an index ETF. Question: Why? Answer: This article.

What advantages do index ETFs have over a comparable index mutual fund against the same benchmark? Or, to ask another way, is there any reason to prefer anything other than Vanguard's Index500 vs anything else attempting to replicate the SP 500? (I call out the Vanguard fund because the fees are very low, .14% iirc.)

None that I know of. ETFs are just easy to buy and tend to have low fees.

Re: Golden Rules of Financial Safety (1999)

#36

Post by snikeris » Mon, Oct 30, 2017, 5:06 PM UTC

jordanlev wrote: post #32

> Rule #11: Create a bulletproof portfolio for protection. > The portfolio should assure that your wealth will survive any event — including an event that would be devastating to any individual element within the portfolio. In other words, this portfolio should protect you no matter what the future brings. > It isn't difficult or complicated to have such a portfolio this safe. You can achieve a great deal of diversif…

Harry advocated a portfolio of:

25% Stocks

25% 30 year treasury bonds

25% Cash

25% Gold

His book on the subject: https://www.amazon.com/Fail-Safe-Investing-Lifelong-Financia...

A more recent book: https://www.amazon.com/Permanent-Portfolio-Long-Term-Investm...

Re: Golden Rules of Financial Safety (1999)

#37

Post by schmidty » Mon, Oct 30, 2017, 5:07 PM UTC

jordanlev wrote: post #32

> Rule #11: Create a bulletproof portfolio for protection. > The portfolio should assure that your wealth will survive any event — including an event that would be devastating to any individual element within the portfolio. In other words, this portfolio should protect you no matter what the future brings. > It isn't difficult or complicated to have such a portfolio this safe. You can achieve a great deal of diversif…

HB's Permanent Portfolio consists of 25% each cash/gold/stocks/long term bonds

25% stocks (index fund) Stocks – for profit during periods of general prosperity and/or declining inflation.

25% Gold – for profit during periods of bad inflation; during inflationary episodes gold bullion provides protection against a falling currency and other potential problems.

25% Long Term Bonds (30 year) – for profit during periods of declining interest rates; and especially during a deflation. Bonds also do reasonably well during prosperity.

25% Cash – During a recession, no particular asset class is going to do well. The cash in a Treasury Money Market Fund offers stability when portfolio asset classes fall in price. It also protects purchasing power during a deflation.

Re: Golden Rules of Financial Safety (1999)

#38

Post by SandersAK » Mon, Oct 30, 2017, 5:08 PM UTC

The first rule is to inherent the money. The second is to be born into a network that benefits you and doesn't punish you arbitrarily. The third rule is to profit from a strong public infrastructure, and then once you've achieved enough wealth, work tirelessly to defund it through tax cuts.

This guy's a mug. And anyone who thinks financial security for one is something that can be done independent of a community is full of it, or a hustler protecting previously accrued assets.

Re: Golden Rules of Financial Safety (1999)

#39

Post by [deleted] » Mon, Oct 30, 2017, 5:08 PM UTC

jordanlev wrote: post #32

> Rule #11: Create a bulletproof portfolio for protection. > The portfolio should assure that your wealth will survive any event — including an event that would be devastating to any individual element within the portfolio. In other words, this portfolio should protect you no matter what the future brings. > It isn't difficult or complicated to have such a portfolio this safe. You can achieve a great deal of diversif…

[deleted]

Re: Golden Rules of Financial Safety (1999)

#40

Post by shoover » Mon, Oct 30, 2017, 5:09 PM UTC

simplerufus wrote: post #9

#13 - Keep some money overseas How exactly is this possible? I am a german citizen and resident, and after hours of reaearch a few months ago i couldn’t find ONE bank in the world I could open a bank account with. I always have to be at least a resident. Did anybody figure this out? My partner is from Canada and I would love to park some money there, but I couldn’t figure out a way to do so.

Times were different when Browne was practicing and refining his system. His book Fail-safe Investing talks about using Swiss banks and holding gold there. My understanding is today the Swiss don't want to deal with the headaches that come with servicing customers from countries that demand so much reporting.

One way is via the Perth Mint in Australia. They need a copy of your passport and take the money by wire to an American account, but as far as moving some money somewhere else you can do it.