Posted by Tim Stobbs on December 9, 2010
Sovereign debt crisis? Greece,check. Declining oil production? Depending on who you believe, check. Ineffective world leadership? All I have to say is Cancun climate conference, check. So yes some days it does really feel the world is going to end sometime soon. Yet twice now this week someone has asked me if that is the case, then how the hell do you invest for it? I don’t pretend to know, but what the hell, let’s take a stab at an answer just as an exercise.
Well according to some people the answer lies in getting some physical gold that you own. That way when hyperinflation hits you will have something that will retain its values as world currency markets fall in on themselves. Yet that mind set ignores the fact that will anyone really even care about gold if the world really did go to hell? Personally I think some seeds and a garden plot are going to be a lot more useful. Beyond that a good wood stove to heat your house might be a good investment.
Yet those lines of thinking are the extreme. A civilization collapse doesn’t typically just occur over night, but rather breaks downs in pieces slowly over time. There will be a transition phase where things start slowly with local shortages of some items like your grapes from Chile so most people won’t even really care. So if the world truly is on the downward slope of oil production I would get into owning some oil because on the way down the slope of production that oil is about to get a whole lot more valuable. Also if oil does get unstable power production might just get a whole lot more important to people as a backup source of energy. So owning a stable utility with low natural gas/oil in the generation mix would be a good idea.
Other than those obvious ones you would have to start thinking in terms of strategic resources: what are people going to need during the transition. The most basic of those is food, so I would take a hard look at fertilizer companies. Then if you are really worried about eating, start going down to your local farmer’s market and make some friends with the vendors. As global supply lines have issues knowing where you can get food locally would be a great idea.
Then perhaps the best investment of all would be to have a good circle of friends and family around you. Why? It’s basically suicide to think you could have the skill sets to live by yourself. People today are so depending on the systems around us that in a true survival situation we would be screwed. For example, think about those 72-hour commercials? Could you survive a power outage that lasts for days? Now apply that for a week? How would you do by yourself? Likely not so good, but as a group you would likely stand a better chance of having some useful skills between you to make it work.
Anyway that’s my random thoughts on investing for the end of the world. What would you do to invest for the end of the world? Feel free to suggest anything, I didn’t particularly hold back with my ideas.
Posted by Tim Stobbs on December 8, 2010
You know after four years of writing this blog you think I would be running out of firsts. Yet today is my first ebook review on Financial Planning: Helping You Sail Successfully into the Future by Frank Wiginton.
To start I should give a few disclaimers on this book: first it is really short to read ( just over 20 pages) and second Frank is a certified financial planner so yes there is a little sales pitch for his services at the back of the book.
So you might wonder why do a book review on such a short book? Well in a nutshell I’ve always liked Frank’s comments on this site and I actually found the book useful since it answers a rather basic question: what is a financial plan?
The book starts out answer that question by defining what financial planning is not. I agree with Frank that often an investment plan is often passed off as financial planning when that is only one small part of it. What should a financial plan be then? Basically a comprehensive look at where you want to go and then how to get there.
It’s not an easy thing to pull together if you end up looking at the pieces involved such as your estate, insurance coverage, spending levels, investments, taxes paid and any businesses you own. So in case your not familiar with how that works Frank then outlines the typical process of pulling together the full blown financial plan and an estimate of the time involved.
I liked this book since it really did get me thinking about my own situation and a few blind spots that I have yet to fill in for my plan. For example, I’ve been so fixated at finishing my book I actually never considered the tax implications of the book doing anything other than breaking even. If I suddenly do well with it, then what? So if nothing else this short book is useful for the questions Frank points out that might get you thinking about what you are missing in your plan.
Also the price is right since the ebook is can be downloaded for free from here. Perhaps the only downside I can give the ebook is I really wish it was a little longer and perhaps gave a few more stories of how financial planning has helped people. I’m a sucker for a good story and I personally though the book would be a lot better with a few stories.
So do you have a financial plan? If so, how long have you used it and do you think it is worth it? If you don’t have a financial plan, just how were you planning to retire early anyway? *grin*
Posted by Dave on December 7, 2010
This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.
I’d consider myself to be a fairly fit person – last May I ran a 10km race with minimal training (other than what I was normally doing) and finished middle of the pack in my age group. Looking ahead though, I realize that in order to be able to do what I want to do as I age I have to maintain a certain level of physical fitness. Take golfing for example – this is by no means a physically taxing sport, but it does involve a significant amount of walking, some flexibility and a moderate level of strength in order to play well.
Physical fitness is a “use it or lose it” kind of proposition – it’s much easier to maintain a certain level of fitness then it is to “gain” it later. I’ve been 60 lbs heavier than I am now and it’s not a good time, losing that weight and getting into shape after not doing very much was not fun, nor easy. Growing up, I worked on farms with many guys in their sixties and seventies who were able to do just as much (if not more) work than I was, simply because they never took a break from the lifestyle. In the same fashion (moderated because I don’t have hundreds of 40-60 lb bales of hay to throw around continuously) I hope to maintain a similar exercise plan that I am on in my 30s well into the future.
I am far from a fitness freak, my main goal is to maintain a level of strength that will allow me to do what I want to do. This goal could mean I could go out and play pick-up hockey from time to time, run a 10km race or like I did yesterday walk for 20 km around the city because the weather was nice and I needed some fresh air after being cooped up studying for an exam the past couple of weeks. I lift weights a couple of times a week for 20-30 minutes at a time (during my lunch break), do some moderately paced cardio the rest of the weekdays and go for a walk on the weekends.
I have no expectations of my ability to run a marathon or do an ironman or anything extreme. For vanity and health purposes, I don’t want to be fat. So, once or twice a year I run a baseline test on my physical fitness. Can I run 10 km? Can I still do 100 pushups in a short period of time? Can I squat my body weight? These checks over time allow me to understand where I’m at physically and provide a comparison to where I was in the past.
Do you have fitness goals? Do you watch your health and fitness as well as your finances?
