Charlie’s First IRA

My mental image of what's happening to the USAWhen I was younger I used to believe more of what other people told me. One thing was what the typical money managers say to regular dudes like us (meaning people that aren’t millionaires). “Make regular scheduled contributions to mutual funds that mirror the broad market, buy stock in blue chip companies, buy and hold, and be patient. This investment will work out for you in the long run and you’ll be financially secure when you retire (At 65).”

What bullshit.

Those guys don’t give a shit about us. We’re minnows. Our purpose in the mind of those Wall Street BBDs (business-banker douchebags) is as food, like the 2 1/2 tons of plankton a whale gobbles up daily, or the half ton of donuts eaten by Kirstie Alley when she’s on the lam from Jenny Craig. That advice doesn’t work and it hasn’t worked for a long time. If you’re still following that strategy I urge you to reconsider, and reconsider soon before it’s too late.

I assume that some of our readers have been following the recent events in the world financial markets, and see that there is enormous change coming to the world economic picture. All over the world things are coming to a head at the same time. We recommend Zerohedge.com for general news on the reality of the global meltdown but here’s the Readers’ Digest version.

America has an unbelievable amount of debt, governmental, personal, and commercial. Her political leaders only care about scoring political points instead of addressing any of the structural flaws of the way this country is put together. The business leaders have no interest in the good of the country. The tower of the American empire is beginning to show obvious cracks begging at the foundation and reaching towards the sky. Our leaders just want the other party to be in charge when this all crashes down after they’re gone.

Europe is an enormous clusterfuck. Greece could default at any moment. Unemployment is through the roof in Spain. Italy just got downgraded. Property developers are committing suicide in Ireland. France has several banks that are going to go under and take everybody down with them. There is a silver lining however, as the world waits for the Euro to collapse there has been a bunch of flight to the dollar and our European vacations to the racetrack in Nuerburg, Germany are getting cheaper right now. But still, Europe is in big trouble.

China is ripe for a crash too. There’s bad inflation there, they own trillions of shitty US debt, and there’s a huge bubble in real estate and virtual ghost towns that could house 200 million people. All empty. Don’t worry about China, they will be fine in the long term, but they’re in for some pain too soon.

I hope you’ve been reading our other articles on related subjects like Boris’ article on investing in gold, silver, my letter to Mom and Dad, and Boris’ crackpot theory about the end of the world as we know it. Basically we have come to the following conclusions:

1. In the short term, there’s a bad crash/bear market coming to the world.

2. In the medium term, after the crash, the Fed will print up a shitload of more money to try to prop up the system. That may make the markets rise again nominally but the rise will be mostly due to inflation.

3. In the long term, America is finished as a world superpower. China is on deck and we will work for them.

There is nothing that anyone can do about this. No amount of propping up the phony debt based fiat money system will make America survive this. Not when the annual U.S. trade deficit is 712 billion dollars. Not when our political leaders would rather score a political or financial victory and pass the problems on their successors. Not when the cocksmoking asshats at Goldman Sachs are steering this whole shebang right off the cliff. No amount of political activism, charity, or individual or collective leadership can fix this. America has been living far beyond its means now for a very long time. The Repo Man is coming.

We do like Ron Paul who is one of our only political leaders that actually tells the truth about the situation. If there were any hope for America, Ron Paul would be that hope. But I find his mission quixotic. The mainstream media, who works for the bad guys, won’t cover him. There is no way that he could ever change the situation in time even if he was elected President. Ron Paul running for President is like volunteering to be captain of the Titanic after it hits the iceberg; no amount of competence from any President can save us now.

Plus I have some really damming video of Ron Paul. Boris and I agree that this is the single most incriminating piece of evidence why he can’t be President. Not because of his stance on homosexuality, just that he looked uncomfortable, weak, and very much un-Presidential.

Ron Paul on Bruno

Bruno was a great movie, by the way. It made Borat look like Bambi.

So now perhaps you’re thinking: what’s a single dude to do? In my opinion, it’s quite simple. Cover your ass. Read Boris’ article on investing and follow that advice. Buy gold and silver in physical form and get out of the dollar. Buy an investment that you can’t get cheated out of that is actually a tangible thing. Food, energy and real estate are also good investments, but not yet – they will fall as well with the broad market in the short to medium term.

I’m following my own advice and currently getting out of my investments in the US stock market and getting physical gold and silver and putting it in a safety deposit box (now two boxes). I have lots of old accounts scattered around – residues of past job retirement plans, various IRAs, pensions, regular stock accounts, etc. It’s a pain in the ass because there’s all these different types of accounts and they have different rules, so I’m figuring out how to get my money out account by account.

The other day I called up Charles Schwab about my Roth IRA there. This was my first ever investment account as an adult, and I began investing in it around 1999 when I was just starting out, driving 50,000 miles a year and making $15-20,000. Life was a lot of work but I loved being a newly minted adult. Even though I wasn’t making a lot I still followed all the so-called money experts’ advice and had a hundred bucks or so a month deducted from my bank account and invested in the usual mid and large cap stuff that everybody is supposed to invest in. It wasn’t a lot, but I was being responsible and grown up, right?

I put money in for a couple years, sending a bigger check when I had a little cash, and a few years later quit contributing and just left it there. In my recent research on the Internet I found that you can take out your original contributions from a Roth IRA whenever you want, tax and penalty free after 5 years. So I thought I’d sell and buy some more gold and silver. I called them up and asked, “What was my basis? How much did I contribute of this total account value?”

The answer, six thousand dollars. Not a lot, but this was 12 years ago that I started contributing so I was very pleased to compare that to my current balance:

$6753.21.

That’s right, 15 years afterwards, the conventional wisdom, the plan every financial adviser gives the minnow investor, gained me 1% annually. And that is not counting inflation. Even if you use the bullshit cooked book U.S. government CPI (Consumer Price Index) that doesn’t include food, energy, or housing prices my investment declined significantly in value. What gives, I played by the rules?

The answer is the US economy has gone nowhere in the last ten years. The Dow Jones was higher in 2000 than it is today. That’s not even taking into account the trillions of dollars the US has pumped into the market raising the prices of everything. A gallon of gas back then was less than $2, now it’s closer to $4. But we’re not making any more money than we did then, so we’re getting poorer all the time.

If you haven’t woken up yet now would be an excellent time. Cover your ass. Get your money out of the stock market now. Then make popcorn and enjoy the carnage on CNN and MSNBC. Buy gold and silver after the crash, lock it up and wait. Follow this strategy and a couple years after that take a bar of gold and go buy your beach paradise retirement home on the Black Sea, drink some Rakia, and enjoy the sight of hot Bulgarian girls walking by in thong bikinis. I’ll save you a beach chair.

Disclaimer: I’m not a financial professional and therefore I’m not giving investment advice, past performance does not indicate future results blah blah. I don’t see how these guys who are pros know what they’re talking about more than I do. Just watch some old MSNBC from 2006, 1999, etc. These guys can be 100% dead wrong about everything and they still keep their jobs. A good investment strategy is to do the opposite of what Jim Cramer says to do. It’s a guaranteed long term winner.

Charlie Bushmeister

Call me Charlie. I decided to join with others to write this blog because I feel that I have learned a lot about how to succeed in life in general. It took a lot of trial and error and I've developed a wealth of philosophies, skills, and tricks of the trade that would be very useful to like minded guys out there. There's no need to repeat my mistakes, of which I have made many, instead I urge you to read this blog, absorb and practice its lessons, and then go out and have the most awesome life, on your own terms. To me that means good health, success in your career, the number and type of relationships you want, and general satisfaction that you're not wasting your life spinning your wheels, but going forward always towards your goals.




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