Where and How to Store Money ?
It's not enough if you have money, you should also be able to store it safely, otherwise you won't have it for much longer. It is important to know where to store it, and in what form to store it, in the safest possible way, otherwise you risk losing it. In this article I will examine this question.
First of all, when I talk about how, I refer to it's form, for example cash vs asset or crypto-currency vs fiat, and so on. When I talk about where, I refer to it's location and method used to put there. Revealing how you store your money, is only a matter of privacy, but revealing where you store it, is a matter of security.
RULE 1: Never tell anybody where you store your money!
It theoretically doesn't matter where you store it, as long as it is a secret, well yes hiding your cash on your office table is obvious, but if nobody knows it except you and your secretary, it's less risky, than if you were to tell it on Facebook, so that every burglar will have an eye on you. It does matter where you store it technically, but as long as it is a secret, you massively reduce the risk of theft.
How & Where to Store Money?
Well let's analyze each different scenario, I am going to list here a few popular forms, and we will look at their risks:
| Form | 356-D Volatility Risk | 365-D Supply Inflation | Risk of Theft | 365-D Return | Stability |
|---|---|---|---|---|---|
| USD Cash | 0.220% (USDX) | 8.588% (M1 supply) | Low | -8.368% (USDX-M1) | High |
| USD Savings Account | 0.220% (USDX) | 8.588% (M1 supply) | High (Bail-in + Civil Forfeiture) | -8.368% + 1.05% = -7.318% | High |
| USD Cash Deposit (1Y) | 0.220% (USDX) | 8.588% (M1 supply) | High (Bail-in + Civil Forfeiture) | -8.368% + 1.30% = -7.068% | High |
| USD S&P500 | 13.649% (USDX + SPY) | - | High (Bail-in + Civil Forfeiture) | +5.061% (USDX - M1 +SP500 return) | Medium |
| Gold | 15.237% | - | Medium (Civil Forfeiture) | +6.869% (Gold - USD Return) | High |
| Silver | 29.569% | - | Medium (Civil Forfeiture) | +21.201% (Silver - USD Return) | High |
| Bitcoin | 150.884% | - | Low (Hackers) | +142.52% (BTC - USD Return) | Medium |
*TAXES & FEES NOT INCLUDED
The data spans from 2015 Sept to 2016 Sept to be in sync with the FED's M1 numbers. Yes I don't use CPI for inflation, I think it's BS., we use the M1 supply to measure inflation, because it really measures how much cash is injected into the circulation via paper + checking accounts. We base this analysis on the USD since it's the reserve currency, but you can calculate it for your local currency as well.
We always have to include the Forex returns - Inflation, to be able to see how much a currency produces or loses for our money. We can see that the US CPI numbers are bollocks, since they show a 1.5% inflation, while it is really >8.5% in reality.
So good luck saving money in a bank account, it's not just that you probably lose 7.318% of your wealth yearly, but you also expose your money to bail in risk, which could be anywhere from a 50% to 100% theft of your wealth.
The stock market gives some returns, but I think the risks still overweight the gains. Another crisis can come any time with big time crashes, so I would not put my money in stocks either.
Precious metals are Ok, but only if you store it in a safe place, and not hold paper metals (certificates), because those could be not be repaid. Gold certificates are insanely leveraged so your exchange will probably not have enough gold to deliver to everyone, so make sure you physically hold your metals.
And of course the best one is still ( * DRUM ROLLS * ):
BITCOIN
The good old Bitcoin, it's still the HOTTEST investment out there, with over 142% real return vs the USD, it is a no brainer that anyone with half a brain should hold some BTC on their portfolio (or even the majority of it). Unless you are stupid enough to hold your coins on scam exchanges (MTGOX) or exchanges that don't invest in their security (Bitfinex), you should be Ok.
Of course securing your BTC still takes knowledge, like not clicking on malware e-mail attachments, and so on, but it is usually easier to hide than a stash of gold bars, and you definitely wont get robbed "civil forfeited" if you carry Bitcoins in your trunk:
- http://www.huffingtonpost.com/2013/04/04/ton-gold-bullion-hidden-car-switzerland-border_n_3017140.html
- http://www.nytimes.com/1985/04/23/us/judge-gives-the-government-6-million-found-in-car-trunk.html
- http://www.zerohedge.com/news/2016-04-06/greeks-confiscate-largest-amount-gold-ever-smuggled
- https://en.wikipedia.org/wiki/Executive_Order_6102
So yes, Bitcoin will protect your wealth from thieves and hackers, if you have advanced security methods. And you might also earn a nice return on it, so why not store money in Bitcoin?
Disclaimer: The information provided on this page might be incorrect. I am not responsible if you lose money using the information on this page! This is not an investment advice, just my opinion and analysis for educational purposes.
Sources:
http://www.investing.com
http://us.deposits.org
https://fred.stlouisfed.org/series/M1SL#0
LOL
-1- 9/10 coins are scams
-2- Literally everywhere hackers
-3- Most people owning bitcoun got scammed and/or hacked at least once since 2011
I don't think your "ratings" of risk are objectively accurate. You just threw them there.
If you ask random people in the street and they will rarely tell you that their money got stolen from a bank or a savings account. That's like almost never.
Ask half of bitcoin holders and they will tell you that they got hacked or scammed at least twice.
HEY I HAVE 1000 BTC IN WALLET XXXX COME AND HACK ME PLS, you will probably not get hacked. Get a hardware wallet if you are very worried.Not if you ask people from Cyprus, who got a nice haircut on their deposits:
https://bitcointalk.org/index.php?topic=160292.0
I have bitcoin since about 2013, and never got hacked, never got robbed, never got scammed.
And I have only followed a few basic safety protocols, nothing extraordinary.
that's because you were rather late on the game.
I am cypriot. Check my profile. Half of that article is bullshit. Cypriots just created a scam schme through the banks and invested in toxic mortages so they could enjoy a 7% interest on their bank account.
again. your article is not speculative. you are just guessing
I don't have a savings account for a long time, I wonder who keeps his money in a savings account nowadays? :)
super post. upvoted and resteemed
thanks, i just want to educate people about different risks and investments
The best place to store bitcoins is in a Trezor. I've used one for about a year and it works great. It can also be used as a password manager.
Im surpirsed that you ditched completely the "traditional" way of storing money like the stock market but going all the way to crypto. You must be a very aggressive investor.
I am a visionary and an opportunist. I think the benefits of crypto massively outweight the traditional financial system, and the risks are much smaller as well. Well yes it's a rollercoaster, but it goes both ways, you just have to ride it correctly to make a lot of money.
I would say I'm mostly agree with you on that. But good mixture of both will make the journey less bumpy and even more profitable. Just my 2 cent.