Wealth Preservation Practicality

Posted: Sep 28, 2013 12:01 AM
Wealth Preservation Practicality

We have undoubtedly reached the crossroads of current events: Obamacare, a potential government shutdown, the debt ceiling, Federal Reserve “taper,” Syria (oops, sorry, that’s now back page news.)Indeed, it seems that each and every week, there’s a new crisis.Every day that we wake up, there’s something different out there to worry us, concern us, and perhaps even make us afraid.Yet, the sell-side analysts of Wall Street continue to tell us that we must buy, buy, buy.Of course, it’s just not stocks that we are being teased with.

The Federal Reserve, by maintaining a zero interest-rate policy (ZIRP), continues to encourage us to go deeper into debt by going to the malls in order to buy, buy, buy.In addition, real estate agents are now encouraging us that homes-for-rent are great investments for our IRAs, thus the housing market supposedly continues to be a great buy, buy, buy.

Do we have a direction that we can feel comfortable with?Do we have confidence in our leaders, or do we feel as though the barbarians are at the gates?For those who are oblivious to the domestic and international crossroads at which we have currently arrived, for goodness sakes, buy, buy, buy, and keep your head in the sand.But for those of you who appreciate the uncertainties, please learn from history and the great families of wealth.

When the barbarians were at the gates, the wealthiest took down their artwork, gathered up their silverware, and along with the coin of the realm, made sure they were buried deep where they could not be found.Lavish silks and satins were replaced with common rags, the return on capital was exchanged for the return of capital, and survival was paramount.

Preservation of wealth was the goal, and the barbarians (uncertainties) were allowed to run their course.When the dust had settled, those who had not recognized the dangers were quite sad. Nevertheless, the wealthy families brought back their silverware, re-hung their paintings, and replaced the rags with their silks and satins — as the invaders moved on. That’s how the wealthiest stayed wealthy.

These days, cash under the mattress doesn’t look so bad, as the current barbarians frolic in Washington, D.C., and we wait to move on from the crossroads.