ANDALUSIA, ALABAMA – A reader wrote to us yesterday:
I am loving the postcards and the diversion from straight “Buy this now to make a buck” financial emails. I am wondering why Tom doesn’t do “real boondocking” and find places to park for free? Of course, with the recent increase in the price of gold he must be feeling flush. 🙂
My answer below…
First, greetings from the barn.
We’re in Andalusia, Alabama, where a Postcards reader has a 100-acre farm. He invited us to camp in his barn and let us explore the farm.
Today, we got a lesson in shooting rifles from a former Army weapons trainer and competitive gun shooter. Here’s Miles firing the .22 rifle…
Miles and our trainer
Then, we learned about beekeeping. Here’s our host showing us the honey…
A lesson on beekeeping
And finally, we went into the chicken house and learned about chicken farming…
Miles, Penny, and Dusty learning about chicken farming
As you know, Kate and I abandoned the “Matrix” two years ago.
We’ve been living in an alternate world where there are no bills, no jobs, no schools, no to-do lists, and no stressors. Just fun, education, and adventure, together as a family, all the time.
We call this lifestyle the “endless vacation.” We don’t plan to return to the Matrix ever again.
How do we finance this lifestyle without working?
I get paid a little income from writing these Postcards. And recently, I got a pay raise to start producing investment research in my new premium advisory.
I love writing these Postcards to you and I’d continue sending them even if my publisher stopped paying me. It’s not a job. I also love doing investment research, and – as long as I get to do it on my terms – it’s not a job, either.
What I mean by this is, my publisher lets me study whatever investment ideas I want to, no matter how contrarian, unpopular, or unmarketable they might be. And I can publish my ideas and recommendations any time I want. No fixed deadlines.
Going back to the reader’s question… We do not feel flush. Our gold is our retirement plan. We hope we don’t have to touch it for many years. Instead, we plan to maintain this lifestyle by keeping our costs down.
Last year, for example, we spent a lot of time in cheap countries like India, China, and Egypt. And right now, we’re living in a pop-up camper that cost us $1,500. We’re spending our time in campsites, which typically cost between $20 and $35 a night.
Even with the cost of gas, auto insurance, etc., I estimate we’re burning less than $2,500 a month right now for a family of five.
Once we get out West, we’ll start camping more often in the National Forests. It’s free. But here, in the East, they don’t seem to allow this. Instead, we plan to save money by camping in Walmart and Cracker Barrel parking lots, which is also free.
– Tom Dyson
P.S. Like I said, our gold is our retirement plan. And as I explained at my Emergency Investment Summit on Wednesday, Kate and I are using a long-term compounding strategy that involves rotating between gold and stocks every generation or so, according to the stock market’s valuation. We hope we don’t have to touch it for many years. The fact that gold is rising in U.S. dollar terms is meaningless to us. What matters to us is that stocks are falling in terms of gold.
On readers’ minds today: owning gold and bitcoin…
Reader comment: So refreshing, your directness and clarity in Wednesday’s interview. No bullsh*tting hard-sell with endless figures of gains. All sounds absolutely right, this flight to gold before government finances take us over that very high cliff.
Reader comment: I just bought another $93,000 worth of gold. Dyson is right… Gold inventories are running low. I visited one of his recommended sites yesterday, and placed another order:
I’ve probably bought $200,000-$250,000 worth of gold since March. And I’m not done yet. If what Bill Bonner and Tom are saying is true (and I have no reason not to believe every word they say)… This deluge of fiat currency hitting the system can only end one way: The destruction of my savings.
So, I’m buying gold as often as I can. And then, when Tom says, “Go,” I’m going “all in” on stocks. I vowed always to listen to Tom, after passing on his “bitcoin tip” eight years ago (Tom told me to buy bitcoin, right before it climbed 300,000%+). And that’s what I’m doing.
Reader comment: You made good money from bitcoin and obviously had confidence in it, but now you say it has no value. Why?!
Tom’s response: When I discovered bitcoin, it was unique and cheap. Today, it is neither. There are hundreds of other cryptos competing for the world’s savings. New cryptos come on the scene every day. I know they all purport to be different, but they are all just bits of information, and bits have an infinite supply and no limit to their inflation. Meanwhile, the U.S. government is broke, and the Federal Reserve is hyperinflating its balance sheet. Gold is unique and it is scarce. I’m convinced it’s about to go up hundreds of percent. I’m simply not willing to sell gold, and gamble on bitcoin with it.
Reader comment: You commented that bitcoin went through a tulip mania moment in 2017, but actually, that was its third such moment, in less than 12 years. The first time it went from 6 cents to $24, for a 400-fold increase, before dropping back to an interim low of about $2.20.
From that low, it formed a base and shot up to $1,019, for a 450-fold increase. It then crashed back to about $220 to form another base, from which it shot up to almost $20K, for a 90-fold increase, from which it dropped back to $3,000 and change, to form the base from which it is now rising.
Three data points are not enough to project what it might rise to this time, but it does seem to be on the march again. It is worth noting that the environment for each of these manias has been different, and I don’t expect history to repeat… but I have a small position, just in case it rhymes.
Tom’s response: Disagree. A tulip mania is not a tulip mania because the price rose. It’s a tulip mania because it sucks in the shoeshine boys, taxi drivers, and the dentists to speculate on it. When I heard people discussing bitcoin in the line at Starbucks in December 2017, I knew it was forming a top that wouldn’t be surpassed for years. If bitcoin makes a new record high soon, I’ll eat my words. But so far, it’s down more than 50% and my thought has been exactly right…
Reader comment: As he is such a gold bug, he said, “Bitcoin has major flaws – the consumption of electricity and the speed of transaction confirmation for example.” I own both. Gold costs money to store or protect if you own it in any appreciable quantity, which he avows to do, which I think you could equate with a broad-brush with the electricity required to “maintain” bitcoin.
Regarding speed of transaction, I’d challenge him to buy anything transacted with gold and do it faster than you could with bitcoin. I’m guessing any place that wouldn’t do bitcoin also wouldn’t do gold. Both have value only because people say they do (sure gold has some actual utility in electronics, but that doesn’t drive its value).
Tom’s response: Bitcoin mining uses the same power as some small countries. And gold isn’t meant to be used in transactions. It’s a store of value. I have far more faith that gold will still be valuable in 100 years than I have that bitcoin will still be valuable in 100 years.
Reader comment: I realize that you did not write it, but rather it was a submission from a reader, but the gold-to-silver ratio trade mentioned a couple of days ago doesn’t make any sense to me. Shouldn’t you go out of gold and into silver when it hits 80 (gold expensive, silver cheap) and vice versa at 45? Love hearing about your family’s adventures. Good luck traveling during the plague years.
Tom’s response: Yes, you are correct. That letter had a clerical error. If you were going to rotate between gold and silver – (something I’m not personally interested in doing) – you would sell gold/buy silver when the ratio is high and sell silver/buy gold when the ratio is low.
Reader comment: I wish you would attribute job losses to government lockdown rather than the coronavirus. The virus is a disease, which killed many people and made even more sick. But the economic disaster is the politicians’ fault.
Tom’s response: Thanks for making this point. I totally agree and will adjust my language next time, as you suggest. And, as always, please keep writing us at [email protected]. We read every note you send us.