# What to do with 401Ks



## redcat

I've got some money (not a lot, sad to say) sitting in a couple of 401Ks. I've been watching them take hits as the stock market suffers, and I'm a bit tired of it. I'm also concerned that the US Govt might get some hinky ideas regarding nationalization of retirement funds in coming months.

I'd really like to find some place outside of the US to move my retirement money to. I don't have a problem with waiting til I reach retirement age, etc, I just want to get my money out of stocks and (hopefully) out of the reach of Uncle Sam.

I've stumbled across a couple of web sites that promise to show me how to make lots of money in any economy, keep my retirement money safe, etc, but as soon as they start wanting money to share that information with me I get really suspicious. Since all of us here are pretty common-sense folks (well, most of us anyhow), what are the rest of you doing with your retirement money? How are you protecting your financial future?


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## jnrdesertrats

*Already did*

I didn't have a huge 401k but I cashed it out. I paid the estimated taxes and plan to pay off a bunch of medical bills, which will qualify me to not take the early withdrawel hit. I talked to my tax lady at length before making my decission. By paying medical bills the 10% I would have had to pay for early withdrawel covered the medical bills which I wanted to pay anyway's. My wife had a major surgery and the Doc's wrote off over $80,000. So I thought it was a win win. Walstreet, the Gov't and anybody else can't get my money now, I buried it in the yard...


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## The_Blob

here's a little generic info...

401k Hardship Withdrawal


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## longtime

Redcat,

Don't know what web sites you stumbled across, but be careful most are scams!


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## redcat

Yeah, that's what I figure. As soon as they ask me for money my suspicious factor goes way up.


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## Asatrur

To be honest, I have a few grand stuffed in various places, that I have thinking about pulling, since I am about to turn 40 and to do not have the extra currency to invest anymore, so I am not likely to have a retirement. I figured I could used the money to pay down debt, get preps, etc. instead of watching it drain away while some fatcat wall streeter gets fattter


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## Halfway

Congress writes the laws that Wall Street abides by. The White House / Executive Branch puts or removes emphasis on the SEC and DOJ to enforce the laws.

It is easy to blame "Wall Street", and I am not defending them, but it is too easy to BLAME a faceless "evil" Wall Street.

If you are in solid companies for your IRA or 401k, market fluctuations and timing may be your short term enemy, but certainly not long term. 

Now, the government "annuitizing" all retirement accounts such as Tom Harken and Harry Reid propose is nothing short of Nazi Socialism on a grand scale.

It would take a serious financial crisis and staggering debt to allow the political "fat cats" to implement that.............oh wait, nevermind. :surrender:


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## DJgang

We are in the agricultural business...
People are cashing in 401ks and buying tractors, etc. Should the SHTF, at least they would be able to tear up a piece of ground or lots of ground to get something growing....

Also, my opinion would be to use it to get out of debt, especially on liens against property.


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## GroovyMike

I'm leaving mine alone and watching the GROWTH continue. Diversify your portfolio so that as some funds take hits others gain. If you want to stop contributing additional funds to your retuirement accounts that's fine but if you cash them out before you are 59 1/2 , you give the government +/- 40% Why would you voluntarily give the government 40%???? (38% = 10% penalty+28% tax rate).

No thanks! There is no way I am giving the government 38% of MY money if I can avoid it. I'm leaving it alone and letting it grow until I retire and my taxable income goes to zero. Then I will draw it out penalty and tax free!

I advise you to do the same.


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## Silverfox

You can have self-direct IRAs and 401Ks, which you fund with your own physical silver, gold and platinum. All the benefits of owning physical metal, but that money actually works for you. Not an ETF or paper investment, but your own real metal.

More info here:
American Eagle Gold Bullion Coins


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## Hawat

*Tax on an IRA withdrawal is not the worst thing you might face*

GroovyMike,

Inflation is a tax and it just might be much bigger than 38%, especially compounded.

I do not have a 401(k) because I rolled it over into an IRA. Then, I could buy CEF, PSLV and PHYS. I'd prefer physical PM (which I also have), but then the tax is an issue.

If you are in a 401(k) - avoid any bond funds, especially containing government bonds. Cash will be as bad. Since 401(k)'s offer limited options, real diversification is very difficult, but look primarily for the blue chip equity funds in "essential" industries.

The stock market is where it is because of the money the Fed has pumped it up with. There is no way to justify the S&P or the Dow numbers otherwise. Watching the GROWTH is unlikely to be the future. It is all going to be worth less, even if the dollar amounts stay the same. Which I doubt.

Unless you are in a Roth IRA, you will be subject taxes when you draw it out in any case.

My estimate is that unless your employer gives you a good matching contribution, it is better to pay the tax from your income, save, and put the proceeds into a Roth where you have more investment choice. A Roth is completely tax free after you make the contributions (on which you already paid taxes).


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## Immolatus

1)Talk to a tax attorney.
2) Dont discuss anything you may or may not do that may or may not be illegal on an internet forum.
3)Convert your money into tangible assets.
4)Bury them.


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## Hammerhead88

I would certainly convert my money in tangible assets; stocks and the stock market will always screw you over in the end.

1. I have some money buried.
2. I have some money in several savings accounts.
3. I own real estate. Buying houses that are in areas of high/growing demand is a good idea. If you're handy you can renovate them yourself and then resell them for a profit.
4. I (partly) own a few small companies that bring in enough for a modest salary. This isn't like owning stocks because I play an active role in decision making with all these companies.

I read an interesting PDF a while ago about true offshore banking. It explains how you can make your money invisible to anyone from your wife to the IRS.
I can't remember now where I read it, but when I find it again, I'll post a link to it.


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## GroovyMike

Just to be clear - I see nothing wrong with buying tangibles. In fact that is a wonderful idea. But I would not do so at a 38% loss off the top. If you want to do that, send me market value plus 38% markup and I'll sell you my ammo and silver coins today. In my opinion it is a mistake to cash out your 401K and take the 38% butt kicking. Instead, I'm advising you to leave it alone - hedge your bets that the world as we know it will NOT end. If you need tangibles go ahead and buy them instead of contributing more to your 401k. But don't throw away 38% by cashing it out.

Hawat - inflation is real - but it is not a tax and it is no where near 38%. Trust me on this, I'm an accountant.


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## Hawat

GroovyMike, 

If we assume inflation at only 5%, which, while higher than government figures is lower than what is presently happening, you lose 34% in 10 years. If inflation is 10%, significantly less than Dhimmi Carter's performance, you lose 33% in 5 years. I'm not even contemplating hyperinflation here. 

And I don't think you are either. You are assuming the equities available in a typical 401(k) offer safe investment opportunities. I hope you are right, though 2008 returns would argue otherwise.

If you had withdrawn from your 401(k), had paid the 38% and had put the proceeds into a Roth (in CEF, for example) in June of 2010, you'd have more than all of it back tax free now - and tax free forever. You also would have been able to spread the tax out, so it might have been less than 38%. Sadly, that advantage is no longer available.

Even so, when Gold hits $2000 or silver hits $75, the value of your savings in that Roth would have increased more than any equities in some 401(k) mutual fund. Gold and Silver are not going up, the dollar is going down. The bubble is in Federal Reserve Notes. 

Because of that FRN bubble, there is also a bubble in the stock market. It is up ONLY because Ben Bernanke is flooding the world with Federal Reserve Notes. If we don't get QE3, equities are going to tank. If we do get QE3 equities will tank later and more severely.

YMMV, based on age and level of other income. Still, you would only have paid 38% once, while inflation compounds. From a general advice standpoint, also consider that many of us would pay less than 38%. 

I (probably) wouldn't withdraw if I had to pay a penalty, but it can be eminently sensible if you think there is any chance of serious, or especially hyper-, inflation. That's what PMs protect you from. I've never seen a 401(k) that let you buy PSLV or PHYS or CEF, or actual physical gold. (Or even GLD or SLV, but I'd stay far away from those.) You can do all of those in your own IRA account, Roth or not. So, at least roll your 401(k) into your own regular IRA account as soon as it is possible. That is free, and having your own account (with a vastly larger investment universe) is a great incentive to pay attention to your investments. Failure to do that is the bane of 401(k) participants, and I know because I have administered 401(k)s.


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## rustybenelli

I have read you can borrow against your 401k(repaying that loan is interest to yourself) and you could use it to purchase phyiscal assets(a barn full of copper,if thats your cup of tea). This method would allow you to avoid the taxes and penalty,and best of all you can repay the loan and reinvest in the market if ts (does not) htf and govt does not sieze 401k's(did it in argentina). Your ability to pay back this loan is the only limiting factor. If,you do not have the financial means to repay loan only invest a portion for preparation and use the rest to payback loan. The reason i suggest that you payback the loan with your own borrowed money,is it allows you to see if things will really get bad and you will not have any risk to the market. I have been thinking along these lines myself. My trigger to do this will probably be qeIII(more monetary debasement). I will be investigating this further(i mean right now),the forms i need to fill out,how long it takes to get the money,if the assumptions i outlined are correct and anything else i can think of. I hope this helps you.


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## Hawat

*Inflation retrospective*

Just to make the point that much of the gain in your 401(k) is currently illusory, here's another look at inflation:
News Headlines

The biggest problem is the small number of choices in the typical 401(k). They aren't good enough to avoid the tax that is inflation. And, yes, it is a tax.

If the government clipped coins, and they did do that when coins were gold or silver (and without reeding), you would easily see it as a tax.

Inflation is just coin clipping by other means.

There are a dozen places to find out about this, but I think _The Creature from Jekyll Island_ would do nicely.


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## BillS

redcat said:


> I've got some money (not a lot, sad to say) sitting in a couple of 401Ks. I've been watching them take hits as the stock market suffers, and I'm a bit tired of it. I'm also concerned that the US Govt might get some hinky ideas regarding nationalization of retirement funds in coming months.
> 
> I'd really like to find some place outside of the US to move my retirement money to. I don't have a problem with waiting til I reach retirement age, etc, I just want to get my money out of stocks and (hopefully) out of the reach of Uncle Sam.
> 
> I've stumbled across a couple of web sites that promise to show me how to make lots of money in any economy, keep my retirement money safe, etc, but as soon as they start wanting money to share that information with me I get really suspicious. Since all of us here are pretty common-sense folks (well, most of us anyhow), what are the rest of you doing with your retirement money? How are you protecting your financial future?


I don't believe those websites are legit. You might want to consider getting a loan from your 401k and buying gold. I use bullionvault.com. They store the gold for you and charge you a small fee to store it there.


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## power

BillS said:


> I don't believe those websites are legit. You might want to consider getting a loan from your 401k and buying gold. I use bullionvault.com. They store the gold for you and charge you a small fee to store it there.


Not a real good idea to buy gold or silver from a company and pay them to store it for you. Most times they do not actually have the metal. You only get a piece of paper saying you have x amount of metals. Getting the metal can become a real problem if there is ever a SHTF situation. Much better idea to hold your own metal.


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## BillS

It depends on the company. BullionVault has been in business for years. You can find a review of them here:
Bullion Vault: A Review of Gold Broker BullionVault - InformedTrades
One thing I like about them is that you can choose which country you want your gold stored in. I'll be having mine stored in Switzerland.


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## Meerkat

Asatrur said:


> To be honest, I have a few grand stuffed in various places, that I have thinking about pulling, since I am about to turn 40 and to do not have the extra currency to invest anymore, so I am not likely to have a retirement. I figured I could used the money to pay down debt, get preps, etc. instead of watching it drain away while some fatcat wall streeter gets fattter


IMO,this is very wise.They got my friend for $70,000 a couple years ago.He was devastated to say the least.

What took him decades to save up he crooks took in a matter of seconds.then handed it over to the corporate crooks.No bailout for him.


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## redcat

I've done some searching, and bullionvault is looking more and more promising. I just liquidated by 401K, so it looks like I'll be moving some money into silver.


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## Immolatus

Peter Schiff recommends this kind of thing, storing your silver in foreign accounts, but that whole idea sketches me out. Im supposed to believe its safer for me to store my pms thousands of miles away, controlled by someone I have never met, and on top of it, I have to pay for the 'service', than to bury it in my backyard or whatever?
That makes no sense.
If SHTF, obviously you are SOL, and will not be seeing any of it.
You would now be officially trying to 'hide' assts from the gubt.
Obviously these kinds of transactions would be much easier to trace, as you are generating all kinds of paper trails.
As far as I know, the Swiss are no longer safe haven from the gubt, didnt they recently turn over accounts to the US?
I would think it would make more sense to have it in your local banks safety deposit box than do this. Youre not hiding anything from anyone by sending it off to another country. If youre not hiding it, why send it out of the country, unless its where you plan to retire?

I would love to hear any counterpoints, but please reconsider sending anything overseas, especially to the Swiss. They are no longer a safe haven (in 2009 UBS tunred over names of people accused of hiding assets in Swiss acounts), and really never were given what happened after the war.


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## power

Immolatus, you are right.

What some people fail to understand is that many of the companies who sell metals and store them for you do not actually have the metals. You will get a piece of paper saying they have stored your x amount of ounces of metal and will charge x amount for that useful task. Actually they have no metals at all. If you decide to take possession of your metal you have a certain amount of time before they will send it to you. Amount of time varies. During the time you do the paperwork and they time they have to send the metal they will buy the amount you have stored. They make their money from payments for storing something they do not have and take the gamble the price of metals will go down before you take posession and metals left after a person dies with no record of their metals.
They make an investment. Not quite as much of a gamble as many people might think. If SHTF you will loose any metals stored in such a place.

People who have experience in metals have a saying, "If you don't hold it you don't own it."


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## labouton

Immolatus said:


> Peter Schiff recommends this kind of thing, storing your silver in foreign accounts, but that whole idea sketches me out. Im supposed to believe its safer for me to store my pms thousands of miles away, controlled by someone I have never met, and on top of it, I have to pay for the 'service', than to bury it in my backyard or whatever?
> That makes no sense.
> If SHTF, obviously you are SOL, and will not be seeing any of it.
> You would now be officially trying to 'hide' assts from the gubt.
> Obviously these kinds of transactions would be much easier to trace, as you are generating all kinds of paper trails.
> As far as I know, the Swiss are no longer safe haven from the gubt, didnt they recently turn over accounts to the US?
> I would think it would make more sense to have it in your local banks safety deposit box than do this. Youre not hiding anything from anyone by sending it off to another country. If youre not hiding it, why send it out of the country, unless its where you plan to retire?
> 
> I would love to hear any counterpoints, but please reconsider sending anything overseas, especially to the Swiss. They are no longer a safe haven (in 2009 UBS tunred over names of people accused of hiding assets in Swiss acounts), and really never were given what happened after the war.


I would hesitate about putting any valuables in a safety deposit box. If the banks go down so do your valuables and forget about FDIC, they don't have anywhere near enough to cover all individual accouts in the banks. (IMHO)


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## BillS

Immolatus said:


> Peter Schiff recommends this kind of thing, storing your silver in foreign accounts, but that whole idea sketches me out. Im supposed to believe its safer for me to store my pms thousands of miles away, controlled by someone I have never met, and on top of it, I have to pay for the 'service', than to bury it in my backyard or whatever?
> That makes no sense.
> If SHTF, obviously you are SOL, and will not be seeing any of it.
> You would now be officially trying to 'hide' assts from the gubt.
> Obviously these kinds of transactions would be much easier to trace, as you are generating all kinds of paper trails.
> As far as I know, the Swiss are no longer safe haven from the gubt, didnt they recently turn over accounts to the US?
> I would think it would make more sense to have it in your local banks safety deposit box than do this. Youre not hiding anything from anyone by sending it off to another country. If youre not hiding it, why send it out of the country, unless its where you plan to retire?
> 
> I would love to hear any counterpoints, but please reconsider sending anything overseas, especially to the Swiss. They are no longer a safe haven (in 2009 UBS tunred over names of people accused of hiding assets in Swiss acounts), and really never were given what happened after the war.


One thing I like about Bullion Vault is that it will be a lot easier to sell some of the gold as the price goes up. How easy is it to resell gold and silver coins? Let's say I have 10 ounces of gold at $1500 an ounce. Once gold starts to take off it would be easy to sell $1000 worth of gold here and there as I need money.


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## TheAnt

BillS said:


> One thing I like about Bullion Vault is that it will be a lot easier to sell some of the gold as the price goes up. How easy is it to resell gold and silver coins? Let's say I have 10 ounces of gold at $1500 an ounce. Once gold starts to take off it would be easy to sell $1000 worth of gold here and there as I need money.


Which is why I would buy mostly silver (if not all silver). Silver and gold is real money but who carries around 1500$ bills? An ounce of silver has always been worth enough to buy you a decent meal and a shave... I believe that will continue to be the case no matter what happens.

Problem is if SHTF nobody is going to take an IOU for silver or gold... have it within reach in a secret place.


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## power

Had a friend come by yesterday to pay me some of the money he borrowed a while back. He asked if I still had my silver. I told him I had sold quite a bit for $50/oz. Then he asked if I was going to buy back since it was down and if I did he wanted to go in with me. He would put up half of the money and trust me to keep his silver for him. For some reason I just wasn't interested in getting back even though I could double my money in probably 6 months.
I think I have enough to last the rest of my life and just am not as hungry as I once was.
If I was going to invest it would be silver.


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## TheAnt

Based on the gold/silver ratio for most of history, silver is undervalued at the moment by quite a bit. It could either be that silver is undervalued or gold is overvalued but with the dollars value falling further and further I see them both going up again to and above record levels. If an economic collapse happens you cant go wrong with either.

I do believe silver is the best PM buy right now though. The ratio is almost to the point its time to swap gold for silver again -- so I hear. At golds current price silver (if the ratio were at its historic norm of 1/16) would be worth nearly 90$ an ounce.

_My grandfather was asked who is richer, the man with 10 children or the man with a million dollars. My grandfather, having 10 children answered, "the man with 10 children because the man with a million dollars always wants more"._

I love that...


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## BillM

*Annuitys and 401K's*

The problem with annuitys and 401K's is not that they are unsound investment wise but that they all pay off in Dollars.

The Dollar is the thing to fear right now .


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## TheAnt

BillM said:


> The problem with annuitys and 401K's is not that they are unsound investment wise but that they all pay off in Dollars.
> 
> The Dollar is the thing to fear right now .


True that! Get out of dollar denominated assets no matter what they are. The dollar is in decline and will be for the forseeable future. Things can (and boy do I hope they do) turn around but its not in the cards yet. If you are in dollars you will lose, and even if you win, you still lose. :nuts:


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## Stockfarmer

*Real Estate IRA*



Silverfox said:


> You can have self-direct IRAs and 401Ks, which you fund with your own physical silver, gold and platinum. All the benefits of owning physical metal, but that money actually works for you. Not an ETF or paper investment, but your own real metal.]
> 
> Other self directed IRA custodians allow you to invest in real estate as retirement investment. Rules prohibit personal use until distribution by you, spouse, parents or children, so consult CPA or other advisor. In a financial collapse, a fully paid piece of property, perhaps selected for its BOL potential, would be a good asset to have. In good times, to have it as a retirement property or for resale might be good as well.


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## The_Blob

Stockfarmer said:


> Silverfox said:
> 
> 
> 
> You can have self-direct IRAs and 401Ks, which you fund with your own physical silver, gold and platinum. All the benefits of owning physical metal, but that money actually works for you. Not an ETF or paper investment, but your own real metal.]
> 
> Other self directed IRA custodians allow you to invest in real estate as retirement investment. Rules prohibit personal use until distribution by you, spouse, parents or children, so consult CPA or other advisor. In a financial collapse, a fully paid piece of property, perhaps selected for its BOL potential, would be a good asset to have. In good times, to have it as a retirement property or for resale might be good as well.
> 
> 
> 
> I don't think we've seen the bottom of the oubliette that is the real estate market just yet.
Click to expand...


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## SageAdvicefarmgirl

The_Blob said:


> Stockfarmer said:
> 
> 
> 
> I don't think we've seen the bottom of the oubliette that is the real estate market just yet.
> 
> 
> 
> True, but "Real Estate is the ONE THING they aren't making any more of!"
> A piece of land paid in full, especially thats in a good BOL -away from possible urban sprawl, could be a great investment, esp if it has any kind of habitation on it.
> 
> Of course, on the other hand, some bum could move into it in a SHTF situation, and then "possession is 9/10ths of the law"...
Click to expand...


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## BillM

*Real estate*



SageAdvicefarmgirl said:


> The_Blob said:
> 
> 
> 
> True, but "Real Estate is the ONE THING they aren't making any more of!"
> A piece of land paid in full, especially thats in a good BOL -away from possible urban sprawl, could be a great investment, esp if it has any kind of habitation on it.
> 
> Of course, on the other hand, some bum could move into it in a SHTF situation, and then "possession is 9/10ths of the law"...
> 
> 
> 
> Real Estate is going in the hopper real soon as an investment. That bubble is fixing to pop again.
> 
> As for buying farm land, land will become cheap soon and will go for practically nothing when and if the economy crashes.
> 
> If the population of the USA is cut in half by plaug famin and starvation, there will be plenty of land real cheap. The trick is to have gold or silver to purchase it with.
Click to expand...


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## Momturtle

I took the money out of my 401(k) and bought land. It was a loan so I am paying it back with inflated money -- and paying myself back. The land was selling for way below market and was some that we had been looking at for some time. It worked out perfect and land is the ultimate tangible!


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## BillS

SageAdvicefarmgirl said:


> The_Blob said:
> 
> 
> 
> True, but "Real Estate is the ONE THING they aren't making any more of!"
> A piece of land paid in full, especially thats in a good BOL -away from possible urban sprawl, could be a great investment, esp if it has any kind of habitation on it.
> 
> Of course, on the other hand, some bum could move into it in a SHTF situation, and then "possession is 9/10ths of the law"...
> 
> 
> 
> It's good to have a property like that for your own use but not as an investment. After it hits the fan and before order has been restored, millions of people will have died. Chances are, economic recovery will be slow. In normal times real estate is a great investment but for a post-collapse world I don't think it is.
Click to expand...


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## Meerkat

IMO sell it .My friend lost 70,000 a couple years from his 401 and money markets. The next year they went up on his property taxes .
Don't put it under the mattress though,its the first plae a crook looks.


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## Meerkat

BillM said:


> SageAdvicefarmgirl said:
> 
> 
> 
> Real Estate is going in the hopper real soon as an investment. That bubble is fixing to pop again.
> 
> As for buying farm land, land will become cheap soon and will go for practically nothing when and if the economy crashes.
> 
> If the population of the USA is cut in half by plaug famin and starvation, there will be plenty of land real cheap. The trick is to have gold or silver to purchase it with.
> 
> 
> 
> Taxes,permits,licenses and all the other ways they plan to collect off us landowners will make it had to hold on to it. Even planning on putting meters on our wells .
> Aagenda 21 aka,sustainabe communities will soon force the sheep to share the land,like the old hippy song says.
Click to expand...


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## SuspectZero

How right you are meerkat. Land is becoming harder and harder to hold if you own only a few acres. We own lots next to ours outside the city and a few houses have creeped up in the area. We just got our assessements and the value of our empty lots with no buildings went up over 550%. Talk about sticker shock come property tax time. We went in and complained and their reply was many have come in from that area but the new houses drove up surrounding property values. Our city is taxing us so hard we are talking of moving out of state. City sales tax alone is now 10.5%. Put your 401k in pm's long-term. Never worthless and as things get worse people will be liquidating for cash while you can snatch items for pennies on the dollar with metals.


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## BlueShoe

Boy, looking at a stagnant 401K from one former employer, it was worth around $5-6K about 12 yrs ago, with a spike to around 8K at one point. It's now worth about the same 5K. Had I taken it out a while back and bought PMs, I'd be ahead.


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## crabapple

GroovyMike
I am keeping my 401k, but I take out a loan after the Housing market fell.
I made a good return.
I should have went with Ford stocks, they went from 1.58 to 14.00 in less then 24 months.
But I listened to my broker & went with a less preforming stock, still made money, just not as much.
1) I own land, no payments, only taxes.
2) I own a tractor & plows,3 trucks & 3 tailors.
3) I have tree for timber or fire wood. 
4) I have a small home orchard, nut trees & garden with well water.
I do not see us going flat as a nation.


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## oneblackgsx

Can't you do what you want with your 401k? I have heard of people putting loans against it for real estate, to loan to other people. That would double your money in like 30 years, right? (depending on interest rate) That would atleast be a steady amount of money coming in too, and at a higher interest rate than a CD.


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