Guest post – My Secure Route to Early Retirement
I was recently contacted to see if I’d be willing to host a guest post. Normally I decline offers of posts which are quite US focused, however I thought this one might be of interest to people on both sides of the pond as it focuses on investment in precious metals. I’ll admit; this isnt an area I’m particularly familiar with and I don’t currently hold any investment in physical assets.. however I appreciate that it is widely held by investors as a safeguard against currency fluctuations and so should perhaps be something to consider for future allocation? I’d be interested to hear if anyone has investments in precious metals or other physical assets and the thinking behind it. Please post in the comments below or on the Forums, and as always: Do your own research before investing.
My Secure Route to Early Retirement
I was looking through a number of financial advice sites the other day and realized something startling. My retirement fund, which I thought was completely protected against all the bad things that could happen to it, wasn’t as secure as I had thought! Now, if I want to hit financial independence and retire early (taking the FIRE exit, that’s the plan), I need to make my retirement fund secure.
The IRA is definitely a great option but…
Right now what I have is called an individual retirement account, or IRA for short. Not to be confused with the Irish Republican Army, please. This is a private retirement fund that I have at my bank, and it is much more secure to me than a 401(k) at a company or with my employer. The IRA allows me to have more control over how much I put into it every month.
….it does have its drawbacks
However, as I found out, the IRA has a very real problem (as do all retirement accounts with currency in them). This was that it is directly linked to the economy, owing to it being comprised solely of national currency.
We all remember the Recession recently. This means that we all know exactly how unstable the economy of the world really is. If the market were to kick the bucket, my FIRE exit plan would ironically go up in flames, and with it my whole dream of early retirement. To avoid this, I had to find a retirement account plan that was more secure against our fickle economy, and fast!
Is the path to retirement literally paved with silver?
That was when I heard about something called a silver IRA. According to experts, this was the way to go when it came to protecting one’s investment in a retirement account. However, before I actually started saving for a silver IRA account I had to be sure that I was making a good decision in terms of my retirement’s security. You don’t just rush into this sort of thing; that’s how you end up penniless on the streets.
So I did my research, with skills that the NSA would envy. Soon, I had found out all I needed to know about this strange new IRA account, and it was very pleasing indeed. As it turned out, this was definitely the safest option for an IRA! See, what you do in a silver or gold IRA account is you buy actual silver or gold with the money in the account. This means that you have real precious metal as part of your retirement fund.
Precious metals bring new meaning to the “Golden Years”
The perks of this? Gold and silver aren’t directly linked to the economy. This meant that if the market was to crash, my gold and silver savings would not lose their value. I can think of no better way to define “secure investment” than with that! So I checked up on a few places, picked my targets, and am now saving up to get my silver IRA account sorted out, keeping my FIRE exit in sight for the foreseeable future.
2 thoughts on “Guest post – My Secure Route to Early Retirement”
Blimey. Is it just me or is the small flaw in the argument that precious metals don’t pay any return? There’s nothing wrong in holding some as diversification and just because it lets you sleep at night, but if it’s, say, half your portfolio all of a sudden your SWR goes down from 4% to 2% and you need to save 50 times your retirement running costs. Good luck with that. If you’re rich enough (or frugal enough) then knock yourself out, but most people find shooting for 25 times their annual running costs a big ask to achieve in 30-40 years of working life.
You can diversify in currency and into foreign assets a lot easier if Uncle Sam’s profligate ways bother you, and still get some return, although the US market is the biggest and most dynamic market there is.
> If the market were to kick the bucket, my FIRE exit plan would ironically go up in flames, and with it my whole dream of early retirement. To avoid this, I had to find a retirement account plan that was more secure against our fickle economy, and fast!
It’s not early retirement you need to worry about in that scenario. It’s clean water, enough to eat, keeping healthy and avoiding loads of other people trying to blow your brains out fighting for scant resources. You’re right that precious metals may store value better than dollar bills, but it’ll take 20 years for some semblance of order to appear such that you could safely trade them. In the meantime you gotta eat and stay alive, oh and sleep sometime.
There’s no good hedge against societal collapse IMO.
Haha, I was thinking exactly the same thing when I read that sentence ermine! :)