Gold bubble?

How do you feel about the runaway gold prices over the last few years?

I've been skeptical about it from the beginning, and I'll tell you why: gold is not a hedge against inflation. Historically it has been, but there's no guarantee that it will continue to be a safe investment in that regard.

Gold has little practical value. It's not widely used in industry. We don't need it to live.

It has been ingrained in us since we were children that gold is precious and valuable, but why? What good does gold do for you? Does it increase your quality of life, or is it just something that we covet because the previous generations told us to?

We pay top dollar for gold because it's rare, right? Think about this: gold is recyclable. It can be melted down and re-purposed. Much of the gold available today has been recycled. The jewelery shops and smelters are making money hand-over-fist on gold they've already sold before. When you die, your heirs will pawn or sell it back to them, and they'll melt it down into the fashionable style of the time and sell it again.

And here's my ultimate point: gold has little industrial value. Yes, it's used in small amounts in a few industries, but despite the rarity, we're not going to run out of gold any time soon. Gold is only valuable because we like it and because we're convinced that we have to pay handsomely for it.

The gold bubble is going to burst. It is not an emergency form of currency because it has zero survival value. If the zombie apocalypse happened tomorrow, what reason do I have to give you a gun and some food for your shiny ring? Much like the housing bubble, it's only worth what people are willing to pay for it, and I have a feeling that people will wise up and realize they have better places to put their money.

If you're looking to invest in gold, take the safer route: invest in the mining companies. They stand to make the most money on the current prices, and it'll be easier to get out of your stock position when gold prices come crashing down.

The Other 104 Days

Personal and economic inertia is difficult to overcome. Sometimes we don't know what to do, how to do it, or what we need to get started. This inertia stands between us and our dreams. It overshadows our goals.

It is only through our own efforts that we can overcome it.

I will give you an example from my own life.

I have family living in the Denver, Colorado area. I have visited them a handful of times in my life and each time I fell in love with the state. I've wanted to live there for at least 10 years but have not moved. Most of that time I couldn't because I was still a minor/in school/living at home. I've been in the "real world" for 2 years now and I found myself falling into this trap where I'd think, "yeah, I can do that, as soon as things settle down and the time is right."

What I finally realized a few months ago is that the "right time" will never come without me dragging it here, kicking and screaming. I have to set a date, kick as much ass as I can until that date, and just go.

I'm moving to Colorado in August 2011.

Now, let me explain why it took so long for me to overcome my own inertia.

I'm 25 years old with a college degree in a life sciences field. I graduated in 2008, just as the job market was crashing and burning. I managed to find employment, just enough to pay the bills, and I accepted two pseudo-promotions without any increase in pay because it meant I wouldn't be laid off like the others. I work harder and get less overtime than when I started there, but I still have a job. I have sent out hundreds of resumes and cover letters in the last two years and I had one interview a year ago that went to someone with more experience. I haven't even heard from an HR person in the last 6 months.


I have almost $70k in student loans that won't pay themselves. The prospect of giving up this job and moving to a place I've only seen a handful of times is daunting. I've sent out a few resumes to businesses in the area, but no self-respecting business would hire me for an entry-level position and wait for me to move when they have local candidates to choose from.

I also had to buy a car last year when my 10 year-old Cavalier failed the state safety inspection due to a rusty frame. I still owe about $15k on the new car and I'd like to sell it after I move, but I'm not sure if I'll be able to. This is the first (and probably last) new car I have owned.

 I don't have much money saved up (less than $2k), and my cash flow doesn't allow me to save much at all - sometimes I need overtime just to cover my expenses.


I have other reasons as well, but I think I'll save them for another time. The point is that I can't let fear of the unknown stop me, and you can't either.

Now, the important part. How do you make something like this work?

If you work a "normal" 9-5 like I do (actually, 8-? for me), you have at least 102 days per year that you don't spend at work. These are the days you have to HUSTLE. You work Monday through Friday to live now, but you bust your ass on Saturday and Sunday so you can live better tomorrow.

Get creative with your hustle. Find a way to make a hobby pay. Moonlight at a restaurant. Do odd jobs. Deliver pizzas. Freelance. Sell your crap on eBay. Tutor. Give music lessons. Pet sit. You can make money doing almost anything if you're good at it - especially if it's something other people don't want to do.

 The point is to take action to get you out of your rut. A change of scenery can inspire creativity and help you financially at the same time. Meeting people outside of the corporate world is refreshing.

I'll tell you about my hustles later. What have you tried? What worked? What didn't?