Here’s a very important question from Vince:
I’ve been thinking…. I’m 31 with a retirement fund that my employer contributes to. So where is my retirement money better invested over the next 35 or so years? Stocks, bonds, etc? Or am I willing to take a 10% tax hit and make major upgrades to my soon to be purchased house so that my multi-generational family is more resilient? I’m thinking resiliency is the better retirement plan.
It touches on a central question many of us have. What’s the better way to invest for retirement? Is it in:
- resilience (the production of food, water, energy, etc.) or
- financial assets (stocks, bonds, real-estate, or gold).
Although I’m not a financial adviser and everyone’s situation varies slightly, I think we can answer this.
Let’s start with the core assumption behind all investments in financial assets:
Global financial assets, as a group, will be more valuable in 20-30 years than they are today.
This assumption is very unlikely to be true.
We are living through an era of decline and turbulence.
The global system is failing and the magnitude, scale, and frequency of future disruptions (due to inevitable financial, environmental, etc. trends) will be greater than anything we have ever experienced historically.
As a result, it’s very unlikely that global scale financial assets will be more valuable in 20-30 years than they are today.
An Investment In Resilience
In contrast, what does an investment in resilient production provide you over the long term? To understand this, let’s zip forward twenty years.
Imagine a future where you’ve selected a good location for a home and invested in its productive capacity. This resilient home:
- Provides you with protection against price gouging, supply panics, corruption, and rationing.
- Reduces your cost basis, which in turn reduces your potential of failure due to a loss of income. Lower costs also speed up your savings rate.
- Provides income (in a pinch) and an asset that will become more valuable over time.
What does this mean?
Resilient assets increase in value the worse things get, relative to everything else.
As a result, it’s the single best asset class to use as a hedge against inevitable global disruptions.
So, when you are thinking about putting money away for the future, consider this: You would be smart to think about putting some money into a resilient home and community before you gamble your funds away on financial assets that rely on volatile global markets.
Your never behind the power curve analyst,
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