Balancing Prepping and Modern Day Investing?

[Blstr88]

I posted this question on another site, but wanted to see what the M4C folks thought...all comments welcome!

"This is probably my biggest issue right now. I'm 26 years old making a good living at the moment, but I am constantly torn with spending my money on "prepping" or investing the money in modern day investments.

For example, Im ready to buy a second property at the moment. Financially and mentally I am ready and have been looking. Part of me wants to buy a small cabin 3 hours or so north of me in the mountains as both a weekend vacation home and a "retreat" in case of any SHTF scenarios.

However, the other part of me really wants to buy a 2-4 unit building here in town and rent out the units. Ultimately I'd like to own enough rental properties to have enough income to sustain myself. Then I figure I can get a smaller job locally and not really need to rely on my job to live, mostly living off the rental incomes.

Unfortunately, the rental property idea isnt something that happens overnight. It's something I'll need to invest time/money in for the next 5-10 years. But if the SHTF actually happens, rental properties and rental income will become useless and I'll wish I bought the retreat. However if I live the rest of my life, and no serious societal breakdown happens, I'll wish I invested the money into rental properties...

It happens on day to day things too, do I put more into my 401k or use that money for food/clothing/ammo? If the world collapses, a 401k will be useless, however if 30 years goes by and everything is still ticking, I'll wish I had been investing into that for the past 30 years to have a retirement...

Anybody else have conflicts like that? And how do you balance it?"

[misanthropist]

Personally I just diversify, and try to consider the potential remaining sources of income in the event of general unrest.

If you really believe the end times are coming, my approach sucks.

If you think, instead, that what we are more likely to face is a general long term grind down from "world's only superpower is Team USA!" to "anarchic world structure with various powers from China to India to Brazil vying for power in a substantially less stable environment" then it's possible to deal with that by a) spreading some of your money across world markets which will be less tied to the reduction in US wealth that may occur; b) investing in local rental properties, because even if things go south, unless you are looking at total economic collapse, most people will still have to live somewhere.

Again if we all get killed by asteroids (the celestial objects or the game, however that would work) then obviously this won't help.

But I think it's a lot more likely that the US will continue to exist in roughly the same condition as now, only with reduced world dominance and greater internal economic disparity, higher crime, and probably even worse beer.

If that's the case, I would much rather be one of the people who invested smartly in world markets and real estate and could afford to live in one of the better areas with my family, or potentially even emigrate to a different country if I thought I'd be better off elsewhere.

I am really not a fan of being stocked up on food and ammo, and then being forced to use it instead of just moving somewhere I probably wouldn't HAVE to use it.

Naturally I do keep food and guns on hand just in case, of course...but if things get so bad I actually need the thousands of rounds I have available, I really don't expect to survive anyway.

[misanthropist]

One word of caution, by the way - if you talk about normal investing strategies in survival circles as a practical approach to potential long term economic threats etc, you will not make a lot of friends and you will have to get used to being called a "sheeple".

Just a heads up!

[a1fabweld]

What it really comes down to is what investments will help you sleep better at night. Piece of mind is priceless. Maybe you and some family members can split the cost of a retreat property to offset the cost? Then you still have funds/credit available to buy local rentals? Or you can buy a retreat, rent it out, the renters will maintain the property for you, and if things crash you can move in.

Who knows what the future holds. I personally won't invest in anything that I can't physically touch or hold in my hand in this unstable economy. 401k, stock market, none of that stuff. Some of my older friends I look up to for their financial success are about to blow their brains out right now because of the stock market crash. They were all set for a cushy retirement, and now have a hard time getting out of bed to face the fact that they are going to be working the rest of their lives. It's sad to see. What 401k I had didn't do well in the last crash. It's still there, but I've written it off.

Good luck to you freind.

[Guns-up.50]

A major problem i see is that if the world goes to hell in a hand basket your money will be useless. It wouldnt matter if you invested or kept it under your mattress . You said you make good money now then i say keep on it and look into your cabin. I am also 26 and at this rate if the world stops sucking small investments now will be big pay offs later but i wouldnt hold my breath. Besides property is one of the best investments you can do.

[Just a Jarhead]

"Moderation in everything".

A balanaced approach is usually best since none of us have a crystal ball. And prepping is a constant balancing act for any of us who are not independently wealthy. We may be experiencing a strange global minor blip in history or we could be approaching something much more sinister. Who knows. I don't have nearly enough of what I feel I need to be fully prepared for the worst (should that occur) and I've been at it for years.

In investing, age is a huge consideration and remaining time until retirement. At 26 you're young enough to make some mistakes. I can't tell you what to do, but if you bought the cabin now and things stabilize or even get better you can always sell it down the road and get that 4 unit rental property. Granted, you won't be able to buy the rental at today's prices if things get better but the flip side is you'll get more for the cabin when you sell it too so it balances out. But insurance cost money and that's how I would look at it. A 'whole life insurance policy" that you can cash in if you want. In trying to read the tea leaves, if it were me, I'd probably buy the cabin. In a shtf scenario it will be "priceless"! And can a price be put on peace of mind?

[Just a Jarhead]

Also a good argument can be made right now that this isn't the best of times to be a landlord with the highest unemployment rate since the 1980's and an uncertain near future of more layoffs ahead of us. Trying to evict someone as a landlord can be a long arduous aggrivating task depending on where you live. And especially if this is your first venture at being a landlord. Get knowlegdeable about these laws in the area BEFORE buying investment property.

"A rising tide floats all boats" & "never catch a falling knife"...two good investment axioms to remember.

[Belmont31R]

Not sure about your area but around here there are tons of strip mall type places sitting empty. Entire buildings empty and never even used. They were built and then the crash happened. Not just strip stores but huge office buildings, too.


The place we get pizza from is the only business in that strip. Theres a blood donation place, too.

[Moose-Knuckle]

Land is ALWAYS a good investment. If you dont EE or homestead there you could always sell it off for what you paid for it if now more.

[Just a Jarhead]

Land is ALWAYS a good investment. If you dont EE or homestead there you could always sell it off for what you paid for it if now more.

Actually Moose, I wouldn't say always. This often couldn't be further from the truth.

Location, location, location & supply & demand. RAW land is usually the least attractive investment vehicle and the hardest to secure financing for...almost always! Unless of course you bought the last developable 20 - 100 acre tract in a already highly developed metropolitan suburb. Often when you buy land far from the population centers you have to wait many years for it to sprawl your way. Often 20+ years to see any appreciation. And then it can skyrocket. The further away the longer you (or your heirs) will have to wait.

It depends solely on the location of the land, proximity to population centers and if it's improved i.e electricity, public roads, etc. Selling a cabin in a remote area that makes for a perfect shtf retreat calls for a very specific buyer and the pool of those is very small. If I was in the market for a retreat, unless I knew going in I had absolutely no intention of ever selling this place, I would definitely be blending survival with future marketability. You'll should make some compromises. I'd be looking for as many marketable features as I could...i.e. is it on a body of water (pond, lake), is it far enough out of town yet not totally isolated etc etc. Always make your buying decision that you may want/have to sell this place someday. Unless you know for certainty that you'll never want/have to sell.

[J8127]

OP I'm all for being prepared, but this is a no brainer TO ME. Invest in the "real world"

I am absolutly not saying being prepared is a bad thing, but the likelyhood that you will need a mountain hide site to survive Mad Max's take over of the wasteland is as close to zero as possible. On the other hand, financial freedom to do whatever you want, be your own boss, etc... in 5-10 years is actually very possible.

Economic hardship and natural disastors are, IMO, the only real 'SHTF" scenarios worth seriously preparing for.

[Just a Jarhead]

Invest in the "real world"


Where would that be right now J8127? Where is the real world to invest in right now? Gold at record high levels? A stock market that is as erratic, uncertain & as volatile as a 12 year old girl? Rental Real Estate with record layoffs still ocurring? And often a hostile local goverment toward landlords?

As a landlord, if you bought a 30 unit apartment building and 2-3 people didn't pay that's easy enough to absorb. Buy a 4 unit building and if only one of them stops paying and it takes you a year to get them out that can cause you to lose the place.

I'm not saying the retreat is the best place for YOUR money right now, but if you buy a retreat wisely, make the comrpomises I suggested above with selling one day in mind, you maybe be able to not only negotiate owner finanicing but incredible terms today. It is a buyers market for certain. Rent to own would be a perfect situation actually if you can negotiate that. Or lease the land (hunting rights etc). The market may still drop further for real estate and you'll be glad you rented to own. And make sure it's a place you'll use now and get enjoyment out of. Not one so far away or inconvenient to get to you'll use it once a year.

No one can tell you what is right for you. We all read the tea leaves differently. Listen to your inner voice and balance that with your own intellect, logic & reasoning.

[J8127]

Where would that be right now J8127? Where is the real world to invest in right now? Gold at record high levels? A stock market that is as erratic, uncertain & as volatile as a 12 year old girl? Rental Real Estate with record layoffs still ocurring? And often a hostile local goverment toward landlords?


Well yea, that would be the real world :laugh:

[Blstr88]

All really great points, thanks for the input.

One of the many things I've factored in is vacancies, and I've decided if I do buy a rental property it's going to be in a price range that I can afford even at 100% vacancy. That way I won't be RELYING on the rents to cover the mortgage.

[JStor]

First educate yourself on what is happening in the investment world, both from a political and investment angle. Right now the stock market is not the place to be, nor are treasuries any better, so that cabin on a piece of land might be advisable. Also tangible assets such as tools, ammunition and components, guns, plus useful materials such as gasoline, food, oil etc. will become more valuable...especially in turbulent scenarios.

One thing that can be done with an existing 401k is to roll it over into a precious metals IRA without tax consequences. The problem is that the government has their eye on investment vehicles of these types and could raid the accounts. Another problem is the DOW has taken a dive recently and who wants to sell at a loss?

Here's a link to a good site to get an overview of what is happening behind the scenes. www.silverbearcafe.com

[Redmanfms]

Are you actually "ready" to buy a second property? Is the first one paid off? If you don't have the title on the first you'd be an asshole to go out and acquire more debt.

I'd avoid rental properties like the plague. Been there. It seems like a great idea, making the property work for you or pay itself off, but it NEVER works that way. Tenants who aren't douchebags are hen's teeth.

Stock market? Eh. I suspect we are headed toward another cycle of recession. But the time to get it in is at the bottom, the trick is knowing where the bottom is. If you buy real stocks for long-term investment now, you probably be sitting pretty in 10-20 years. Then again, you might lose your shirt; that is just the risk you take.

Gold/Silver? The time to buy gold was 10 years ago. It might still go to $2500/ounce, it might not. When it falls, it'll freefall faster than you'll be able to offload it. Same's true of silver.

Honestly dude, if I were you I'd sock away the majority of it in savings/bonds, throw what won't hurt you to lose into the stock market on quality stocks and chill.


You can do both dude. Every time you go shopping buy some extra canned food. Start learning how to garden and can. Do the max contrib. to your 401K. Rome didn't fall in a day, and you'll be glad you had some money socked away, especially if you lose you job (which is by far the most likely SHTF event you'll face in life). Just make sure you control where that money is going. Most employers turn around and have it buying their stock. Do your due diligence, after all it's YOUR money.

[Moose-Knuckle]

Actually Moose, I wouldn't say always. This often couldn't be further from the truth.

Location, location, location & supply & demand. RAW land is usually the least attractive investment vehicle and the hardest to secure financing for...almost always! Unless of course you bought the last developable 20 - 100 acre tract in a already highly developed metropolitan suburb. Often when you buy land far from the population centers you have to wait many years for it to sprawl your way. Often 20+ years to see any appreciation. And then it can skyrocket. The further away the longer you (or your heirs) will have to wait.

It depends solely on the location of the land, proximity to population centers and if it's improved i.e electricity, public roads, etc. Selling a cabin in a remote area that makes for a perfect shtf retreat calls for a very specific buyer and the pool of those is very small. If I was in the market for a retreat, unless I knew going in I had absolutely no intention of ever selling this place, I would definitely be blending survival with future marketability. You'll should make some compromises. I'd be looking for as many marketable features as I could...i.e. is it on a body of water (pond, lake), is it far enough out of town yet not totally isolated etc etc. Always make your buying decision that you may want/have to sell this place someday. Unless you know for certainty that you'll never want/have to sell.

Goog points all round.

Let me clarify my previous post. When I said ALWAYS I was thinking that if one experiances an economic SHTF whether be loss of a job or total collapse of the economy they will always have their land. Provided of course they actually OWN it and the UN's Agenda 21 dosen't go into effect.

As long as you own a plot of land, no matter what you lose at the least you could pitch a tent on it.

[MeanStreaker]

It's nice to see common sense questions and discussion around prepping. Too many people burn out or flake out because they're only worried about the Zombie Apocalypse that's supposed to happen next week. Then when it doesn't come quick enough, they shrug everything off and get back to bad, sheep-like habits.

A great example of the right way to do this stuff (IMHO) is The Survival Podcast (http://www.thesurvivalpodcast.com/).

Their tagline "Helping you live the life you want, if times get tough, or even if they don't" says it all.