Watch Out when Buying Gold

It has come to my attention that some people have been buying gold coins from “certain company” as an investment, instead instantly losing a third of their investment due to ridiculous markup.

Consumers who purchase gold from “this company” are typically elder folks who are purposefully misinformed about the investment they are making. Gold has had strong growth over the years, however the coins these people bought would not yield any profit until years later if ever.

Beware of buying gold coins without understanding the real value behind them. If you or someone you know has been investing in gold, be sure to figure out its exact worth before putting up your hard earned cash.

It’s not enough that many places want to take your gold for pennies on the dollar. They also want to sell the same gold back to you at an outrageous markup.

For a good place to find current commodities prices, check out CNN’s commodities charts.

Gold Investments

The Daunting Reality of Financial Woes

Lately I’ve been reading “The Intelligent Investor.” One of the first things the author points out is the difference between investors and speculators. In short, investors look for long term gains based on thorough assessment of a company’s core business, while speculators a.k.a.Tin Foil Cat day traders gamble (speculate) on stock prices to go up or down for a quick sale and profit.

The reason I bring this up is because one should be able to read the market news and understand where price shift in stock is due to speculation or actual change in underlying core business. The market’s decline in the last two weeks is all due to speculation. Fears of the fiscal cliff are making people act irrational.

Fiscal cliff or not we’ve got bigger problems to deal with. The so called economic growth cannot be maintained with the way we do things today. We have overbuilt the housing market, delayed paying our debts thus creating money supply shortages, ignored new job growth opportunities in emerging markets and stifled innovation in favor of temporary new jobs. (Geeez, that’s a mouthful). We’re going to pay dearly for all of this.

It’s not another doom and gloom scenario many will have you believe by being willfully ignorant – it’s reality.

We may not like it but it’s going to catch up anyways.

What does this mean for you and me?

Until debt is repaid (or forgiven), we have a very tough road ahead. It’s just the cost of doing business as usual. For us it means we must be financially prepared.

If you are living beyond your means, this may be a good time to change that.

  • Forget your kitchen remodeling or back yard makeover – pay down your debt instead.
  • Make sure to save enough for the day you may have to transition jobs.
  • Watch your investment and retirement accounts closely.
  • Educate yourself on current hot (financial) issues if you’re not the type to typically pay attention.
  • Just be alert. The government won’t fix our problems for us.
Are you taking any precautions in your financial affairs in light of the current “situation” we got ourselves into?

Why Being Jewish Pays

Fact: Jews make more money.

Before you rush into calling me prejudiced, hear me out. Although being Jewish and caring about wealth is a stereotype perpetuated with negative connotations, there is absolutely nothing wrong with being raised to value education, financial knowledge and family values. In fact, we can all learn from Jews.

SynagogueWhy Some Religions “Pay” More

Let’s forget about ethnicity and focus on religion. What does our religion have anything to do with wealth?

Well, it turns out – everything.

Religion shapes moral values, family values, educational values and… you guessed it – financial values. And it turns out Judaism does all of these things much more effectively than many other religions. However, before you throw bricks at me let’s consider a few things.

According to a study by Lisa Keister, at Ohio State University, Jewish people:

  • Accumulate more than twice the amount of wealth of an average individual with different religious affiliations.
  • Inherit twice as much from their families and more frequently.
  • Typically own twice as much stock.
  • Own much more valuable homes

The big question is why? I know I’m curious!

Keister proposes a very convincing answer: it’s their values, stupid! (ok, I got carried away with political catch phrases here.)

Education’s Effect on Wealth

Jews place more importance on a strong financial foundation early in their children’s lives. They invest in their children: better education, more savings, better social connections and a preference for strong community ties. Importance of building wealth is taught early and is a critical part of preparing for success. For example: on the date children come of age (Bar Mitzvah and Bat Mitzvah) parents, relatives and friends often give financial gifts, not just in money, but in investment and saving vehicles. This strong religious tradition sets a course for a child’s financial path.

Don’t take my word for it though, ask around!

Ever wonder why so many bankers, doctors and lawyers are Jewish? It’s because Jews value education. Adults establish early savings for their children and put them through the best schools money can buy. As a result, Jews earn more money in higher paying jobs, then repeat the cycle with their own children.

Alright, so they are pretended with better opportunities from early on, what else?

Jewish Investment Behavior

Since investment behavior is engraved early on in life, adulthood builds on to a strong foundation.

Fact: Jews prefer financial assets vs. real or fixed ones.

Stock ownership occurs much earlier in life than for most people. Unlike a typical investor of another religious affiliation, Jews invest in financial assets before buying a home. This is meant to create continuous cash flow and allow for ongoing investment (Rich Dad, Poor Dad ring a bell?). Full disclosure: affiliate link.

Combined with generally better incomes and better investment opportunities through developed social connections (most often from attending services), those of Judaic faith enjoy faster accumulation of wealth and more control over debt.

Other Important Wealth Factors

Keister also hypothesizes that later child bearing and more time spent on helping children develop helps establish better financial foothold for kids.

Makes sense, right?

On top of that, communal exposure to social development creates a network of trustworthy and strong ties that can help financially at a later time.

What Can We Take Away From This?

I’m not suggesting you should drop your religion and take up Judaism. However, you simply can’t argue with basic facts about financial behaviors that set people up for a wealthy life:

  1. Save early, save plenty.
  2. Educate your children about financial management and establish their future by investing in their education.
  3. Be involved in your family’s financial well-being through constant communication and participation.
  4. Consider investing in yourself before bringing new life into this world only so that your child faces the same financial struggles as you.
  5. Consider investing in financial assets before jumping into real estate or fixed assets (especially when you’re young).
  6. Don’t discard religion – after all it helps build important bonds that will aid you in your quest for financial independence.

Fact: you don’t have to be Jewish to do as they do.

With that, I’d like to finish up this rather long train of thought that in all honesty deserves a much deeper discussion that what is possible to cover in a blog entry. For a full study and its findings I highly recommend checking it out here (PDF).

Finally, I’d like to conclude that these are my personal observations of what I found to be a very fascinating subject. I’m not an expert in investing and give no specific advice. Also, If I offended anyone in any way, I apologize in advance as this post was meant to look at financial connections to one religious group and not to offend any specific group of people.

For those looking for a good book on investing, check out The Intelligent Investor by Benjamin Graham (in collaboration with Warren Buffett). Full disclosure: affiliate link. He was one of the few investors who got away with profiting under the worst of market conditions. It’s a fantastic read, and a great start if stocks are not your thing yet.

Are you Jewish by any chance? Does any of this hold true for you? If you’re not, what are you doing to secure your future and increase earnings?

Invest With Future in Mind, Think Green

When I ran into an article at Dink’s Finance about Charlie Rushton’s oil well investments, my stomach turned. While gas prices soar and politicians are at work to eliminate tax credits for electric vehicles, our country’s problems with making the right choices in energy investments are mounting up.

It’s hard to imagine a bunch of evil, old, white guys looking out for their own interests but that’s exactly what’s been going on for decades. The only question echoing in my mind is – why? Why do we keep investing in our demise versus our future prosperity? Why do we keep supporting companies that don’t take environmental responsibilities seriously? I think it comes down to consumers to take the first step. It’s the individual choice we make that promotes the type of investment our government supports.

You can imagine my reaction to Rushton’s support for oil well investment on individual level – that of disgust. I know we are looking out for ourselves and our families, trying to make any extra income, but at what cost?

Don’t Fall for Political Lies

We’ve become clueless about the state of our environment and the economic forces behind our politics. Almost half the country still doesn’t believe in global warming! We support politicians who care less about our future, rather looking out for their profits. The old we shouldn’t pick winners or losers argument is a complete fallacy when we let the free market decide which path our country will take in energy investment.

Right now, we have the capacity to power our entire country on wind energy, except for uneven [lack of] support by our politicians. If we were to give the same opportunities to green businesses as we have been to fossil-based industries for decades, we wouldn’t even be having this conversation.

Green Isn’t Going Away

As electric vehicle sales are expected to continue growing, so are investments into green companies. We can’t rely on oil forever. Do we really need to wait and see what happens to the price of oil as Asia’s demands grow dramatically? You may be thinking: Well, this sort of growth is exactly why you should invest in oil, but let me tell you why this way of thinking is wrong.

While trying to provide for your family now, you are actually creating a much larger problem for your kids and their offspring. If you really care about the place you live in, the people you love and the free market economy that can spur a whole new industry with the right support, then investing in oil is a terrible idea. We need to start making the right choices on consumer level, as individuals.

Invest in Green Companies and Technology

Organic FoodsIf you’re looking to invest, consider environment-friendly companies, and those that relieve us of dependence on fossil fuels. Don’t support companies that actively promote environmental waste by fattening their stock values through needless product manufacturing. If you are a supporter of clean environment, don’t support it just a little bit, dedicate yourself.

For long term investments consider organic foods. What better way to promote growth through sound long term investment than helping grow a company that’s environmentally responsible and didn’t lay off a single employee in the recent economical downfall?

Don’t get me wrong – I am not asking you to sacrifice your investment yields.  I only ask that you consider alternatives with equal returns. Whether we realize it or not, our policies adjust based on consumer choice. Decisions we make today will impact the way public and private investments are made tomorrow.

Wind Energy

Have you made any green investments? Are your habits promoting waste and stagnation?