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Outside The Financial System

12 July 2010 One Comment

The more I learn about our financial system and the Wall St machine, the more skeptical I become. As such, I strongly believe in operating somewhat outside the financial system.

While the Wall St machine will continue to encourage investors to pile all of their money into a strategy that only works in bull markets and requires you to hand over 100% of your wealth to Wall St., I think it’s important to look at alternative strategies.

The reasons for wanting to do so are:

  1. Avoid fees and paying someone else to make decisions that everyone else is making (common knowledge)
  2. I don’t trust the financial system (unstable, corrupt, etc.)
  3. Future taxation?

I like the idea of keeping some assets outside the financial system.  This means in a safe place or vault that is not in a bank.  These assets might be precious metals (gold allows significant wealth in a very compact form).  Additionally, keeping some cash (maybe a few hundred, maybe a few thousand), in a secure, hidden place on your property is a great form of security.  Should circumstances warrant you unable to get cash out of a bank (power outages, bank holiday, etc.), then you’ll have some cash to help you get by.

An interesting trend that I think is just getting started is the idea of operating outside the system in order to avoid taxes.  With rumors of VAT taxes and transaction taxes, this could become much bigger in the years to come.  Paying cash for services that are “undocumented” will become more widespread.

One Comment »

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