- If someone thinks they have most of their tangibles in order and can’t relocate, how much of their savings should be in cash, precious metals, cryptos, the market, and/or in insurance? I’ve seen recommendations for anywhere from 1 to 6 months of expenses in cash and 5 to 25% in PMs.
DISCLAIMER: I am not an investment or insurance advisor and not trying to act in that capacity.
Really, really good question!! And I go at this like anything else… mission and priorities…or risk & mitigation. You can look at it both ways.
For the average person insurance is the highest priority. For instance, should your house burn down you must have enough insurance to rebuild. If the bread winner dies, you have to have enough income replacement for survivors to continue on. So, correct/appropriate insurance coverage is #1.
#2 is cash in case something occurs and you have expenses. I believe in 6 months to a year of basic expenses is the right amount. Obviously you build up to that…well, unless you are wealthy.
I do not believe in “crypto currency” at all! I think it is a scam, a form of pyramid scheme…or a purely speculative commodity worse than pork belly futures. 0% (zero) in cryptos is my rule. Kinda like a slot machine…pure gambling.
The stock market is also a gamble…but a decent one if you put your money where the big boys do, or invest through the big boys. We have a really great mutual fund for about 50% of our IRA amount. It has consistently outperformed the S&P 500 for a very long time…and our IRA is a long-term investment. The other 50% is in cash equivalent. That 50% is to give a cushion in case we need to take money out of the IRA and the market fund is down or poised to go up.
Now, precious metals…oh, boy. A decent rule of thumb is 10% And I am more of a fan of silver than gold. Remember, precious metals have little intrinsic value…its value is mostly perceived value. And historically it has held up pretty well. But, my personal view is that its value won’t last long in “grid-down”. I also like junk silver just as much as investment grade rounds. Unless you are very wealthy (i.e. multi-millionaire) I think 20 – 25% is way WAY WAY too much PM.
My favorite PMs are lead and brass…very precious indeed…and multi-purpose…and they also have built in security.
Oh, and I think it is very wise to have some, maybe all, of your cash in actual cash. Obviously very well protect from theft or destruction…but kept on hand nonetheless. When the banking system shuts down cash will be king for a short period of time.
I hope that answered what you were looking for.
Obviously I wasn’t giving investment or insurance advice…just talking about our situation. (second disclaimer)
Contact me with your questions or private messages…
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