Request for advice!
I have read many posts regarding gold/silver and other financial matters on this site and wish to say thank you to all of you for the posting of your advice.
I would like to ask some questions with the hope that the kind people on this board will indulge me.
Here is my situation.... I have roughly $10K in credit card/personal loan debt and earn about 60K / year from my employer. I have about 20K in my 401K.
My family and I live on 50 acres owned by my wife's mother whose husband died last year. My mother-in-law would like to give her current home (which is paid for) and the 50 acres to my wife and I (as she cannot perform the upkeep anymore) and build a small "mother in law" home next to her current home or as an attached "add-on" to the current home. We are planning on incurring a $75K 30 year fixed rate mortgage to add on to the home (I will perform the majority of the labor, the balance will be done by a friends who have been in various areas of the construction business for years so the labor will not be as much as one would normally incur) and to install solar and wind technologies to produce the majority of our electrical needs.
In regards to food, we have 60 chickens, five cattle (one bull), two hogs (one male/one female) and the ability to produce food for them all.
My questions are:
1) With the impending financial crisis headed our way, is incurring the mortgage at this point in time a wise choice?
2) Should I pay off the credit card debt or buy silver/gold?
3) Should I borrow against my 401K to purchase said silver/gold?
Thank you in advance for you replies!
If you're not worried about damaging your credit rating...
...well, short term, then you could consider this...
The last thing you should ever do is take out a home equity mortgage for the addition on a home that is free and clear of the banks. If you need the $75k to pay for the addition, here's something you could do. Note, however, that this will mean your credit rating is shot in the short term, although there are ways to clean it up.
There is a service out there (I won't name them unless you ask me to) who have a program whereby you basically send a letter to the banks (that provide your credit card accounts) telling them that you are disputing a charge. In this letter you ask them to provide certain documented information that they will NOT provide because of fractional reserve lending practices and the fact that they are using your signature to create credit out of thin air. Yes, it's that wonderful scam we've all been enlightened to. Anyway, the info you request is info they don't want you to see because you'd figure out that they didn't lend you money, they lent you credit. And according to this program, it is illegal for corporations to lend credit.
So anyway, they will NOT send this information (although they will send you a nasty letter) and because of this you legally are no longer required to pay that bill until the dispute is settled. So, you can stop making payments immediately, and the banks will eventually just close your accounts and send them to a collection agency because they will not send the info you requested. Now, the beauty of this is that you never had any formal contract with any collection agency to pay them a dime, so it is difficult for them to force you to pay, even if they take you to court, which, according to my consultant is a rare occurance. They provide legal information to fight any collection agent court case, and win.
This service also provides you with a letter template to force the collectors to stop contacting you, and it works like a charm. You may have to endure an early call or 2 but all you tell them is you won't discuss the issue on the phone, and anything they have to say they should send in writing. Of course, these will end immediately after receive this "no contact" letter.
So, because the bank never delivered on your request for information, and simply closed your account, you are able to go back to the credit agencies and request removal of the negative information they supplied. Most often these agencies are overloaded with requests, and when they see that there is some serious time required to investigate, they will typically just removed the negative info from your report and move on. In some cases you may have to spend a bit more time, and this is the only area where I feel the service is lacking in info, but the rest is solid.
So basically you're sticking it to the bank for using your name to create credit, as those wonderful banks are always doing. So you're turning the table on them and saying "Great! I'll take this credit you're lending me, and I'll not pay you any money back since you didn't actually lend me any money." They have almost no recourse which is why they are always trying to tie everything to your credit rating. It's an intimidation tactic to scare you into paying your credit cards off.
Honestly, I just wish I had known a year ago (when I went through the program) what I know today about fractional reserve lending. I would have run every single card I had to the max buying gold, then scrapped them.
Honestly, I would seriously recommend that any of you who truly believe that we're headed for a financial collapse, use whatever cards you have to buy gold or some other commodity that will retain it's value in the crisis. Screw the banks, I say use them for whatever you can get from them. They've been bleeding us for decades, it's time we strike a blow back at them. Let them go bankrupt for all I care.
Request for advice.
Thank you all for your advice. I appreciate you taking time to respond. Any further advice would certainly be appreciated.
-kayak
My 2 cents
Well, you are in a position that is much better than most of us (regarding your land and natural resourses). I'm am basing my advice on the hyper-inflation scenario.
1) I believe that incurring a mortgage is a wise choice at this time. Why? Because, the value of silver and gold will become more and more prevalent as the crisis ensues. You simply need to backup your debts by holding silver/gold (physically of course). As the crisis emerges, your silver investment that you bought today will be worth at least 15 times that amount, allowing you to actually benefit from the crisis! Theoretically, you will be able to pay off that 75K debt with about 200 ounces of silver.
2) Pay the min payment, hold enough silver/gold to do the same as above^
3) 401K: I'm not too sure about this... I'd prolly get out (my 401K doesn't have jack in it so I'm not worried about it...)
4) Make sure you hold enough extra silver to be able to live. Get bullion to pay off your debts. Get junk silver (pre 1965 dimes) for day to day living. This type of silver has a small enough amount for the practical purchase of food, clothing, etc.
Peace be with you and God bless us all.
Matt Harrington, Grants Pass, OR
The big question is your
The big question is your $60k job and how secure it is. Do you have other sources of income to cover the mortgage payments if you lose your job?
RE: The big question is your
My job is as a systems admin with an Aerospace Defense company. As far as reliability....I'm not sure what the company will go through when things get bad.
The #1 advice being given
The #1 advice being given for the coming currency crunch is "get out of debt". I would be VERY cautious with regards to getting a mortgage on your house and property which could cause you to lose it if you couldn't make payments...
kayak, you are in a pretty
kayak, you are in a pretty great position for economic collapse. If/when that occurs all priority shifts back to the basics of water, food, and shelter. You have all of those covered pretty well, and they can't be taken from you. Your position is strong. Hold onto it. This is what I would do:
1. Send in MINIMUM payments on your debt, and instead work on acquiring gold and silver - as soon as possible, because it keeps getting more expensive.
2. Make sure your water source/needs are well taken care of and protected.
3. Buy a few easily storable and cheap foods to supplement your own supply of eggs and dairy, like canned goods, nuts, spices etc. You might want to plant a few things as well.
4. Acquire and become familiar with the guns/ammo and means to protect your property if you have not already done so. It sounds like you are fairly isolated which can both help and hurt at the same time. I would get some dogs and or motion detectors to be on the safe side. There is a great survival article I keep posting here which has great insight on this. Just click on 'Search' above and look for Argentina Economic Collapse.
If you have done all this, then you and your family can coast through the worst economic collapse. All of your basic needs would be covered without anyone having a job, and your gold/silver would have huge financial benefit by the time the dollar completed its fall. You will notice that I did NOT include adding in the new mortgage you spoke about. This is something which you could actually get away with because you are clued in to the fundamental economic principles of gold/silver discussed here, but it is a bit of a risk nonetheless. Your shelter is paid for. That is so very important and valuable. I just would not allow even the slightest possibility that it could be taken away. It sounds like you are on great terms with mom-in-law, so living in the existing shelter would work. What I WOULD do, however, is look at buying a SEPARATE house close by for mom which is NOT financially attached to what you already have. Let the separate property be its own collateral for the loan, and if it gets taken in foreclosure you still have your original secured position. This is the way I would do it, and if you read my earlier post below you can see how to actually get the second house very cheaply if we experience hyperinflation, which I think we will:
http://www.dailypaul.com/node/39677
RE: kayak, you are in a pretty
What about borrowing against my 401K (which will be worthless if the market crashes) to purchase metals? My line of thinking is to get all that I can from my 401K while it still has some value. Thoughts?
I am very bullish on metals,
I am very bullish on metals, so yes I would do that. Having dollar based assets just doesn't make sense to me.