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  #21  
Old 31 October 2013, 19:15
OutsideTheB OutsideTheB is offline
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Originally Posted by DirtyDog0311 View Post
I have Vanguard for my employer's 401k plan. My employer also (through matching), provides an additional $10k a year to my account.

I also have set up a self-directed 401k and transfer those company-matched funds into that account. I use the SD 401k checkbook to purchase ~$10k in gold American Eagles and ship them straight to my house every year. So basically I get $10k in gold every year for free. IRS approved.

I personally believe we are in a HUGE bubble right now and that it will go "pop" way before I retire (which is about 30 years off). This pop will basically wipe out any and all funds that I am not allowed to move out of the Vanguard account. So the Gold Eagles are a hedge against that.
Excellent post. I'd just add that folks in the market need to a) try to anticipate when the Fed stops fueling the crackbinge or b) if the printing presses continue, realize how that adds to the risk of finally popping the ever growing bubble(s). This new Fed Chair is Bernanke on steroids with regard to the printing press, so best to keep one's ear to the ground about bubbles.
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  #22  
Old 31 October 2013, 19:25
DB8541 DB8541 is offline
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My retirement comes from 25 years in the Marine Corps and the VA, but I have no faith that in the future it will stay at current levels and I fully believe my pay will be cut down over time. I had money in the market and when the crash hit actually gained it back times two during the recovery. Then when I retired I sold all my stock and put it in a money market account on stand by for my future dream retirement house.

Because of this belief my plan is own everything. No mortgage, no vehicle or credit card debts, and live a more self sustaining life style with some small farming and off the grid gadgets. I fortunately was half way descent with my money over the years and have been working as an IC for the last three years since I retired.

With the retirement paying for all living expenses and still having cash left over, I have been lucky to save almost every penny from the IC gig. Subsequently when I deploy this December it will be my last rotation but with the opportunity to do some really short rotations (two or three weeks at a time) next year if I want to, maybe to treat myself to a nice Harley

I have no faith in Social security or in future investments. Cash will be my king and along with no debt of any kind I have no worries if my military retirement is cut as I fear it will be to pay for the free loading society that is getting bigger and bigger.

Most people make enough to get what the need but they always seem to spend it on things they want instead. Money management is about priorities and fiscal discipline, something our government knows nothing about.
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  #23  
Old 31 October 2013, 19:35
smp52 smp52 is offline
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For government employees, those maxing their TSP out above/beyond employee matching funds, have you used any alternative strategies?

I've read here and other places that maxing out your contribution to the 401k is a must. Whether it's 15-17k per person or double per couple. Every year, with compounding returns even at 5% is still better than letting it ride as cash in a saving account, not getting employer matching funds, and tax benefits?

I'm not a gambler myself, but like to mantain a steady/positive rate of return without too many overhead fees/what not. I've have a low fee income fund on the side that's been pretty good at 6-7% a year returns on a continual basis.

TSP from my understanding is managed as index funds unlike the riskier approaches in commercial 401K schemes. Prior to the collapse in 2008, I had moved all of my funds into the government "G" fund, then slowly started buying back into the other funds. Bottom line, was only a minor negative turn in my 401k then started building back up at a moderate rate keeping rate of returns positive.

I agree with the index fund approach and that complexity in the system means you want to ride the market over the long haul. However, I've also recently read that equity and bond folks are seeing another bubble, which isn't good...
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  #24  
Old 31 October 2013, 19:38
DirtyDog0311 DirtyDog0311 is offline
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Originally Posted by assertnull View Post
This is genius. Perfect. I need to do this. Like, now. I have a Vanguard 401k at work (and an old Fidelity 401k with a paltry sum), I've just viewed them as a waste.

You go through a financial advisor to set this up or which?
It took me about 2 months of calling around to my company's benefits department and Vanguard itself to get a straight answer on how to set this up. Lots of legal mumbo jumbo stuff. I'll try to explain it best I can.

- Self-directed 401(k). You can legally open one up if you have any 1099 form that you need to file with the IRS for Income tax. There is no minimum amount. $50 from a garage sale on the weekend would cause you to be eligible and contribute funds from anywhere. I "sold" my dad a box of 300 WIN MAG ammo for like $75 dollars. That's the 1099 'income' I used to justify my 401(k) account opening.

- Every employer's 401(k) plan is different. My company's vanguard plan only allows me to transfer the funds into my SD 401(k) that my COMPANY contributed into my regular 401(k). That equaled out to $10k a year for me. Call your retirement plan provider for your specific plan details.

- The IRS allows the purchase of physical precious metals via self-directed 401(k) plans. However, BULLION bought with SD-401(k) funds need to be held by a 3rd Party Custodian (I.E-- You still do not have physical possession of it). The ONLY physical precious metals that you can buy with SD401(k) funds --and have IN YOUR PHYSICAL POSSESSION -- are the coins minted by the US Govt. IE --- Gold American Eagles, and Silver Eagles. The only catch is that, if audited, you have to produce the things to ensure that you didn't sell them for 'income' and not pay a tax.

- I set mine up via the local bank I've had since I was 15 years old and working at the grocery story. The broker I used through a financial firm charged an upfront fee and have a yearly administrative fee (around $1200 and $132, respectively), sent me a legal packet with all the information. I took that packet to the bank, they looked at it, set my SD 401(k) account up, and then gave me a checkbook for that account. I called Vanguard, told them I wanted to rollover my company's funds in my account. Gave him the routing number. The funds were in my new SD 401(k) account in 3-5 business days. I took that checkbook to a local coin shop (or you can price source online at APMEX, or other reputable places) on weekend and cut them a check for the coins. Easy Peasy.

It's a pain in the dick to get started, but I'm glad I did it. My money is not ones and zeros on a screen anymore........but actually sitting in my safe --- protected from inflation and gov't confiscation (which they WILL do once the big derivatives bubble pops and brings down the dollar with it, I believe).
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  #25  
Old 31 October 2013, 19:47
DirtyDog0311 DirtyDog0311 is offline
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Originally Posted by OutsideTheB View Post
Excellent post. I'd just add that folks in the market need to a) try to anticipate when the Fed stops fueling the crackbinge or b) if the printing presses continue, realize how that adds to the risk of finally popping the ever growing bubble(s). This new Fed Chair is Bernanke on steroids with regard to the printing press, so best to keep one's ear to the ground about bubbles.
Unfortunately, I don't think anyone is going to see it coming. They'll just wake up one morning and find out a Bond auction didn't go so well.........or the IMF saying (overnight for us) that they are dropping the Dollar and going with a gold-backed Yuan currency as the new Reserve. Or OPEC/BRIC saying it will no longer trade oil or gas exclusively in dollars (ie -- bye-bye petrodollar). Those three things are probably what awaits us in the mid to near future. And I'm not even being doom and gloom. Just reality of what our monetary policy and QE is going to do to us.

Only a few people saw the last bubble before it burst (mortage backed securities), the one before that was the Dot-com bubble. Each time the idiots on the news refused to acknowledge there was a bubble. And people lost all their shit when they both inevitably popped.

We're now at a DOW index of ~15,500. The economy is still in the gutter. More and more people are on food stamps. Underemployed or Unemployed. You think we're not in an insane bubble right now?
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  #26  
Old 31 October 2013, 19:56
OutsideTheB OutsideTheB is offline
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Originally Posted by DirtyDog0311 View Post
Unfortunately, I don't think anyone is going to see it coming. They'll just wake up one morning and find out a Bond auction didn't go so well.........or the IMF saying (overnight for us) that they are dropping the Dollar and going with a gold-backed Yuan currency as the new Reserve. Or OPEC/BRIC saying it will no longer trade oil or gas exclusively in dollars (ie -- bye-bye petrodollar). Those three things are probably what awaits us in the mid to near future. And I'm not even being doom and gloom. Just reality of what our monetary policy and QE is going to do to us.

Only a few people saw the last bubble before it burst (mortage backed securities), the one before that was the Dot-com bubble. Each time the idiots on the news refused to acknowledge there was a bubble. And people lost all their shit when they both inevitably popped.

We're now at a DOW index of ~15,500. The economy is still in the gutter. More and more people are on food stamps. Underemployed or Unemployed. You think we're not in an insane bubble right now?
That's why my personal approach is to be aware when we've moved into the bubble "vulnerability" zone - which is clearly now - and to throttle back on the risk level of my portfolio when in that zone. That way I'm prepared if it bursts today or months from now.

Then after bubbles burst, you can move back to an aggressive risk portfolio and recover what you lost in the downturn. For example, I recovered my whole portfolio from 2008 in a fairly short amount of time with a very aggressive risk strategy. Several months ago, I moved everything to minimal risk because of what these idiots at the Fed have been doing. The downside of my strategy is the lost returns for each month I've miscalculated, but I can live with that.

Markets will always go up and down and there's a way to play them but it involves constantly keeping one's ear to the ground about the macro situation. But your approach is also a good one; pretty clever in fact.
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  #27  
Old 31 October 2013, 20:15
DirtyDog0311 DirtyDog0311 is offline
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Originally Posted by OutsideTheB View Post

Then after bubbles burst, you can move back to an aggressive risk portfolio and recover what you lost in the downturn............
Honestly, and maybe my tinfoil hat is on a bit tight, but I don't think there is going to be an 'after' this time the bubble goes. The bailout and the current QE is the only thing that kept us from completely collapsing last time. This time, the bubble we are creating is our very currency itself.

And almost every single other economy in the world is tied to ours. This is the reason I believe China is hoarding gold. They want to be the next reserve currency and will use their gold as an anchor. Wilson bent us over the table when he created the FED, FDR lubed us up when he took the public dollar off the gold standard, and Nixon finally rammed it home with saying the dollar was now non-redeemable in gold for foreign states.

Along with that......the other reason for my 'doom and gloom' is that we have Cloward Piven going on in American right now. And what is the climax point of CP? Collapse (with the goal of a socialist takeover in the power vacuum). We even have on film 'them' saying that they are gong to 'kill the dollar'. It's a perfect storm of events all culminating in an economic F5 tornado. And we, the American people, are the trailer park about to get hit.

Weimar republic.....here we come!
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  #28  
Old 31 October 2013, 20:26
OutsideTheB OutsideTheB is offline
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Originally Posted by DirtyDog0311 View Post
Honestly, and maybe my tinfoil hat is on a bit tight, but I don't think there is going to be an 'after' this time the bubble goes. The bailout and the current QE is the only thing that kept us from completely collapsing last time. This time, the bubble we are creating is our very currency itself.

And almost every single other economy in the world is tied to ours. This is the reason I believe China is hoarding gold. They want to be the next reserve currency and will use their gold as an anchor. Wilson bent us over the table when he created the FED, FDR lubed us up when he took the public dollar off the gold standard, and Nixon finally rammed it home with saying the dollar was now non-redeemable in gold for foreign states.

Along with that......the other reason for my 'doom and gloom' is that we have Cloward Piven going on in American right now. And what is the climax point of CP? Collapse (with the goal of a socialist takeover in the power vacuum). We even have on film 'them' saying that they are gong to 'kill the dollar'. It's a perfect storm of events all culminating in an economic F5 tornado. And we, the American people, are the trailer park about to get hit.

Weimar republic.....here we come!
Oh, I agree about the fucking Socialists taking over our country. I'd like to stick them on planes and fly them all to Cuba. I just happen to believe America is the most resilient and self-correcting system in the world - even if it's taking longer this time - and we will self-correct the same way Reagan fixed the double digit unemployment, double digit inflation, and double digit interest rates the Socialists had given us by 1979.

I believe our system is one where the pendulum swings back and forth - even if that pendulum swings further out each time.

Believe me, there have been days when I questioned my long held belief about our resiliency, but I think we're finally starting to get signs the pendulum will swing. I think Obamacare is finally the factor that will wake up the sheep.
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  #29  
Old 31 October 2013, 20:50
DB8541 DB8541 is offline
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Originally Posted by DirtyDog0311 View Post
Honestly, and maybe my tinfoil hat is on a bit tight, but I don't think there is going to be an 'after' this time the bubble goes. The bailout and the current QE is the only thing that kept us from completely collapsing last time. This time, the bubble we are creating is our very currency itself.

And almost every single other economy in the world is tied to ours. This is the reason I believe China is hoarding gold. They want to be the next reserve currency and will use their gold as an anchor. Wilson bent us over the table when he created the FED, FDR lubed us up when he took the public dollar off the gold standard, and Nixon finally rammed it home with saying the dollar was now non-redeemable in gold for foreign states.

Along with that......the other reason for my 'doom and gloom' is that we have Cloward Piven going on in American right now. And what is the climax point of CP? Collapse (with the goal of a socialist takeover in the power vacuum). We even have on film 'them' saying that they are gong to 'kill the dollar'. It's a perfect storm of events all culminating in an economic F5 tornado. And we, the American people, are the trailer park about to get hit.

Weimar republic.....here we come!
This is why I have the philosophy of holding tangible items and owning all your property and not investments. To me at this point investments are nothing but numbers on a computer screen that can disappear in a heart beat and you are left with only what you have at the moment it happens.

85 billion a month into the market from the Fed is pulling the curtain farther and farther along to mask the problem. Once that stops and the curtain is pulled back to see the real damage of the situation it will be so massive that I feel it could almost be unrecoverable for decades to come.

From that financial weakness we as the world's reserve currency is over and things will only get worse from there. To include other countries influence on us because we will not be in any financial position to stop it or worse might not survive without it.

Addiction to government aid is a State and societal consequence that has created complete dependence on Federal money and my fear is if it every stopped people will not know how to survive without it. This administration has done all it could to get everyone on more assistance with the end goal of pulling it out from under them and collapsing the whole thing by turning off the Fed money or by the rest of the world finally enough we won't buy your reserve notes anymore. Cloward and Piven as stated earlier.
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  #30  
Old 31 October 2013, 21:53
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It took me about 2 months of calling around to my company's benefits department and Vanguard itself to get a straight answer on how to set this up. Lots of legal mumbo jumbo stuff. I'll try to explain it best I can. {snip}
It's a pain in the dick to get started, but I'm glad I did it. My money is not ones and zeros on a screen anymore........but actually sitting in my safe --- protected from inflation and gov't confiscation (which they WILL do once the big derivatives bubble pops and brings down the dollar with it, I believe).
awesome. I had no idea you could do that, that's enough to get me started - thanks!
My old Fidelity I had written off. It has what, $5k in it? I figured that was just going to be a loss.

But this Vanguard...when we got acquired I'd e-mailed the HR broad and told her I don't want to enroll in the 401k (for that very reason - it's numbers, numbers that are going to vanish into thin air). Get a package in the mail a week or two ago, turns out they DID enroll me, and I have money sitting in there. With all the reimbursements at work and really lazy accounting on my behalf, I didn't notice they were taking anything out.

I'm excited. Don't care if it's a PITA, I'm so doing this.
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  #31  
Old 31 October 2013, 21:58
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Entire post...
Two different worlds, dude. You are doing all you are doing with post-tax money.

Do you invest anything pre-tax?
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  #32  
Old 31 October 2013, 22:53
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The mutual fund companies want you to max out your 401(k) contribution-more fees for them.

If you're only option is a 401(k) plan, then making the pre-tax contribution is probably the best that you can do. You can do a quick calculation using your tax rate to see the "extra" return you get for making it pre-tax.

One thing you can do, if your plan allows it (and I think it should) is to have your weekly, bi-weekly deduction go into the money market fund in your plan initially, and then do a transfer to an equity or bond fund at a later date on a day the market goes down. As long as you can get the trade in by 4 PM that day you will get that day's prices. Market takes a hit, you buy more shares with your contribution. I would stay away from any fund that has a high management fee. Choose an Index fund- they have the lowest fees around.

What do you guys think of the move to 401(k), etc. and away from traditional pension plans? As an employee you must fund it (there is usually a matching contribution, but it is much smaller than when companies actually made traditional pension benefits), take on all of the risk and pay the lion's share of the fees.
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  #33  
Old 31 October 2013, 22:54
Janitor Janitor is offline
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Anyway, while there circa 2009, the bottom comes
So I suspect your version of real estate is not the same as the "American Dream" of home ownership / real estate? I mean, I feel like I was invested heavily in Real Estate, like 350k heavy.
It's a very different game. Smart money wasn't in residential property in Arizona after 2007. As one of my clients put it, "I knew it was time to get out when my garbage man said he was getting into real estate investing." That was in 2006.

You were the poor schmoe homebuyer that got clobbered by speculators during the "greater fool" phase of the market. Now, contrast that experience to making $3.5 million in a declining market on a single deal by restructuring debt and arranging the right deal for otherwise useless land. That's what some of my clients do.

Fubar, there's really no magic to it, despite what the snake oil salesmen say. It's learning how to analyze the transaction. You make your money on the "buy" side of the transaction. If you can't drive a truck through your margin in your worst case scenario, you pass on the deal. There are different ways to "force multiply" your money, like options and tax liens and note buying/trading.

The "secrets" aren't sold in a seminar or for three easy payments of $99.99. Find a guy in your AO who owns a couple of commercial buildings and take him to lunch. You'll learn more in that hour about real estate investing than you will in any seminar.

Last edited by Janitor; 31 October 2013 at 23:02.
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  #34  
Old 31 October 2013, 23:00
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DH, the short answer is no.

The long answer is: In 25 years I squirreled away not quite $500,000. In 2008, those investments were worth a little under $400,000. Keep in mind that it was not a single, comprehensive investment strategy, but rather "investment products" various scam houses in the financial sector came up with. I have lost every dollar I have invested (or nearly all) twice in 15 years. At no time in the last 25 years have I been ahead of the curve via conventional investments for more than a few weeks.

I trusted investment professionals, and I learned that I would have done better to simply eat that money. Nobody looks out for my money as well as I do, and I have repeatedly been shown that this is true even if I am PAYING someone to look after my money. I have NO faith in intangible investments. If I can't walk in, or put my hands on it, and does not have secure, tangible and merchantable collateral it is unworthy of my money.

My wife is now going through the same thing. Her hospital just got bought out a few months ago. No more matching contributions from the company, and the portfolio is managed by the lowest bidder. I give it 6 months before they start playing the game where they switch funds every few months, ensuring that the only people who get a return are the ones managing the fund for a few months.

Am I paranoid? Yep. Sure am. But that doesn't mean I'm wrong.
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  #35  
Old 31 October 2013, 23:03
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The "secrets" aren't sold in a seminar or for three easy payments of $99.99. Find a guy in your AO who owns a couple of commercial buildings and take him to lunch. You'll learn more in that hour about real estate investing than you will in any seminar.
Solid advice.
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  #36  
Old 1 November 2013, 10:18
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Bravo One Three, I can say that you have done almost verbatim I have started to try and accomplish. I hope I can achieve it.

Does anyone here invest in RE notes (mortgages) with an SD IRA?
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  #37  
Old 1 November 2013, 10:26
usnavy_233 usnavy_233 is offline
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Solid advice.
+2

I've managed to have money in everything from Penny stocks to IRAs to real estate over the years. Got fairly well versed in how the markets work at a young age, mainly thanks to a very wise old man I once worked for. He'd been around for many many decades and knew what the hell he was talking about. Thankfully I was smart enough to listen. Even with that, I still made some crappy financial decisions early on in life. Live and learn.

It wasn't all that long ago I told a young LT that I had pulled every dime I had out of the stock market. This was when the Dow was near an all-time high. He thought I was bat-shit crazy when I told him I wouldn't put any back in until I saw the Dow at 7,000. He had a different tune when the Dow dropped under 7,000 for a short while back in 2009.

Now days I have VERY little in any sort of "conventional" stock or mutual fund based investment median. I now own three properties. Two are rentals, the third I live in until we transfer than it will become a rental as well. Hands down the best return on my investment has been my well thought out rental purchases. The key here is "well thought out". Just like any other investment, you can't just throw your money into something that works for me and expect it to work for you. Gotta do your homework, know your market, and invest wisely.
As has been said here already, in different terms, donít spend a dime on investments until you spend some time learning the ropes from someone who 1) you TRUST and 2) isnít asking for a fee to give you their experience or advice.
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  #38  
Old 1 November 2013, 10:39
usnavy_233 usnavy_233 is offline
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One more thing.

Hands down, without exception, regardless of what market your in, what income level you earn, or any other variable that you can think of...the single best investment you can make is to pay off your debt! Nothing generates free cash flow like not having to send your hard-earned paycheck to a bunch of creditors.
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  #39  
Old 2 November 2013, 12:10
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More companies are telling retirees to move their funds around.
For me, I was told to roll over five years after I left. So from Vanguard to HR Block.

GAO did many reports on the 401K
http://www.gao.gov/search?search_typ...1%28k%29&adv=0

And to avoid the 10% penalty before 59 1/2 years old, for those who are VA disabled, "distribution due to the participant's total and permanet disability." IRS 72(t)(2)(A)(iii)
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  #40  
Old 2 November 2013, 18:29
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ET1/ss nuke ET1/ss nuke is offline
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This is why I have the philosophy of holding tangible items and owning all your property and not investments.
I generally agree with your philosophy, but remember the caveat that as long as property taxes exist, you don't really own the property regardless of whether it is mortgaged. If you stop paying the property taxes it will cease to be your property and will wind up in the hands of someone else who will pay the taxes, so essentially your property tax check is your rent check to the government for the privilege of living on their land. When the financial system goes to crap, you can count on tax hikes to accompany that, especially property tax hikes because only the "evil rich" own property to pay taxes on.

Governments, even ours, exist to serve themselves. If you believe that hyperinflation is a possibility, then consider that the result may either be angry mobs revolting against the government or angry mobs looting the middle class and the wealthy. A government that steps in to stop the looting increases the chances of general revolt. A government that facilitates the looting might not only avoid a revolt but co-opt the looters into hit squads to enable totalitarianism, a plan which has worked many times before and is fully in compliance with the Cloward-Piven model.

If the financial system collapses, all the gold in the world won't do you much good unless you find someone else who wants it. You can't eat it, burn it to keep warm, use it as an umbrella, or shoot someone with it. The only reason it is valuable is because someone else wants it, but the only reason to want it is because someone else might want it more. Essentially it is no better than fiat currency because it has no inherent utility other than as a means of trade. If the economy goes into the toilet, we might find gasoline, ammo, medical supplies, potable water, and food far more valuable than gold or silver. It is also inconveniently heavy. A huge pile of worthless currency can at least be burned for warmth.
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