Your Long-Term Dreams

Where do you want to be 20 years from now? You probably want to have more money. If you already started building wealth, then you know that it doesn’t solve all of your problems. In fact, some problems get bigger as you save more money. Things like long-term growth and inflation aren’t so important for small savers. Once you reach ten thousand dollars, a 2% inflation rate means that a “no fee” checking account that pays no interest is really costing you $200 per year. Losing money like that isn’t part of anyone’s dreams.

Wall Street has big plans for your savings too, but their plans won’t necessarily make your dreams come true. They want you to bet it all on a bull market in stocks, and the bulls can boast of the 10.5% long-run annual returns of an all-stock portfolio. Unfortunately, strength of will, self-discipline, and belief in the stock market can’t change reality. Job-killing recessions often follow market crashes, so you run the risk of being forced to sell stocks at the bottom to make ends meet. That is how the dream of 10.5% annual returns from the stock market often becomes a nightmare.

There’s another crowd on Wall Street that can be a greater threat to your long-term dreams. They’re the ones promoting frequent trading, leverage, and aggressive market timing. It usually works well for them, until they lose everything in a crash. Trading also consumes time that you could be spending earning more, pursuing your personal goals, or just relaxing with your family. “Active trading” isn’t a part of most people’s dreams, but it makes money for Wall Street.

Wealth that you aren’t sure of won’t make you feel wealthy. After you’ve worked for many years, looking after your money can start to seem like a job. Your retirement account turns into that “big account” you were afraid of losing back when you worked. This isn’t the way having money was supposed to be.

Wealth was supposed to be like holding top-rated bonds in the Gold Standard Era. Gold-backed bonds were real money, and the people that owned them had the peace of mind that we all want. They did not have to follow financial news, worry about Fed rate changes, or live in fear of election outcomes.

When you invest in a balanced allocation of gold, bonds, and stocks, you can earn respectable returns without the high risk that most people take for granted. Putting an equal amount into the S&P 500, ten-year treasuries, and physical gold produced an average return of 9.5% per year since 1971. Even after inflation, that is still a real return of about 5.5% a year. The maximum yearly loss was less than ten percent, and there were no lost decades. This is the wealth of our dreams.

Investing in gold is the key to getting back to the peace and quiet of an earlier time. Wall Street and the politicians in Washington want you to believe that there is no alternative to overpriced stocks, low-interest rates, and endless trading. When you make gold a part of your portfolio, you won’t have to worry so much about markets and politics anymore. You will be free to start living your long-term dreams.