Am I insane for the way I handle my finances?

Question

People say I'm insane!

In 2000, I was a freshman in college. My first college classes were Economics and Political Science. In Economics I learned how the prices of metals such as silver and gold went up when the economy was uncertain. In Political Science I learned how bad George Bush was going to be.

In 2000, I spent the 10,000 I had saved for 3 years since I was 16 to buy 40 ounces of gold.

Back in 2000, the ounce of gold was 250 dollars. Now the ounce of gold is 1000 dollars.

After learning how much money the banks made out of having our money in the bank, I made another decision that makes people think I'm weird. I decided NEVER to have a credit card, or debit card. I will only use cash. I try to have no more than 800 dollars in cash in-hand. The rest of it, is immediately used to buy metals.

Today, all my money is in a safe place in silver ounces and 1-gram gold ingots or ounces.

Now with Obama and McCain, I fear a recession coming. I have around 100 silver ounces prepared; each ounce costs aorund 20 dollars, they can't lose their value. The rest of my life-savings are in gold.

People think I'm crazy. But I've just bought a car. The car cost me 40,000 dollars. I decided to buy it using the first 40 ounces of gold which cost me 10,000 dollars 8 years ago.

I don't think I'm crazy. If I'm so crazy, how come I OWN a car? I'm not paying some bank for it. And I got brand new 40,000 dollar car for just 10,000 dollars.

Am I really crazy?

Answer 1

no you aren't. Congrats on the success

Answer 2

No you aren't crazy, you are quite intelligent.  The people telling you that you are crazy are prolly up to their eye balls in debt and are being gamed by the system.

Answer 3

If what you're saying is true, I wouldn't say you're crazy, but good financial planning involves diversification. You're too young to remember what happened to the silver market many years ago with the Hunt brothers back in the 80's. It's a long story which I won't go into here, but suffice it to say that silver can certainly lose its value in a big hurry. The moral of the story is that having all of your financial eggs in one basket isn't smart. Sure, it's served you well under current market conditions, but you're too subject to market risks. You absolutely need to diversify in order to maintain some semblance of financial security.

BTW, can't argue with you about the credit card stuff, although you may have a tough time getting a rental car or hotel room without a credit card. You're also going to have a bad time getting a mortgage for real estate without any credit history.

Answer 4

It looks like you are doing a great job of investing, not so good with your investing. You have traded appreciating assets for a depreciating asset. Check the value of your car with the current mileage on an car pricing site like Kelly Blue Book.

For help in not wastefully spending your money check out Dave Ramsey. "Live like no one else today so you can live like no one else when you retire."  

Answer 5

NO, I think you are very smart. Then again some say I"m crazy too.