Growing Your Investments for the Future

By: Tom Chatham

When you speak of growing an investment most people automatically think of investing their money in some sort of financial scheme that increases the amount of financial units they trade in. In our case this is the dollar denominated world of crony capitalism and ponzi schemes. Anyone who gambles knows the house always wins. The house in this case is the banking system and its’ offshoot, the federal government.

People have been led to believe that they can magically get 6, 8 or 10% annual interest into perpetuity making them rich in the end. This means the amount of money in existence must increase at that rate. Some have done it but they are the exception to the rule. As with any ponzi scheme, the first in wins and everyone else loses. Money is only as good as the assets it can buy. If assets cannot expand as fast as money creation, the magical accumulation of it will ultimately buy less and less if everyone is allowed to accumulate it. In order for you to win the interest game, someone must lose.

As Chris Martenson has stated, there are limits to growth. Everything has a limit and debt creation is no different. If something grows without limits, it eventually outstrips the available resources that feed it. We are now seeing the limits of that growth evidenced by the stalled economy we have now inherited. This means the easy accumulation of money and debt that we are accustomed to will have to change. This will mean a redefining of the standard of living we will enjoy in the future. When the current ponzi scheme ends, some will win but most will lose. So, where does this leave those that are just now entering the economy and seek to build a nest egg to retire on.

The best way to build up assets is to literally grow them. The money printers can print to infinity and as they do so the value of that money will change. As I have said before, a can of ham will always be a can of ham. That means a pound of ham will always perform the same function in society regardless of the price or the amount of paper currency in circulation. That pound of ham represents a real asset. It may have a limited shelf life but it has real value.

It takes time and energy to produce that pound of ham just as it takes time and energy to produce beef, dairy products, wood, grain and any other commodity. Those commodities are limited by natural forces. It may be water, soil condition, growing area or pestilence. You can only produce so much of any commodity before you reach the upper limit of growth. The world can only produce so much grain every year so the available amount produces a cap on available supplies. This is similar to limiting the amount of currency in circulation. That means that a commodity will hold its value over time unlike a devaluing currency. In Argentina the recent currency devaluations have caused farmers to hoard their grain as a way to store their wealth until they can spend it.

For an individual that has a few acres of land, growing a commodity is a good way to build up their assets until they are needed. With a small pasture you can buy a bull calf from a dairy for as little as $35 and raise it on pasture until it is full grown. That full grown steer will now be worth $800 or more dollars if sold on the hoof. For a small investment in money and time, you will have increased your net assets by a huge amount. It is not that much more difficult to care for 5 calves than one which allows you to leverage your resources and compound your gains.

If you are someone that likes to grow things, you could start with a handful of heritage grain seeds and compound that small holding into a whole field of grain in a few years. If you have limited room for growing grains you may be able to grow just a few heritage seeds that thrive in your area and break the harvest into small packets of seeds to sell. Doing so can yield hundreds of dollars per bushel in some cases.

By growing your own seed and increasing the plantings, you will ultimately increase your net worth just as if you were earning interest in a bank only you will have complete control over the asset. For someone that uses sustainable growing techniques and maintains their own seed stocks and breeder stocks, which is the way our great grandparents accumulated wealth, it will be one of the few ways to accumulate wealth in the future outside of the manipulated systems we now have. A good woodlot with some selected woods can produce an impressive amount of wealth when sold. For someone with the ability to mill their own wood, they can get the maximum amount of wealth from their woodlot.

When you grow your assets in a financial institution, you are at the mercy of a host of unscrupulous persons that work for the house. The house will always win by eating away at your assets through taxes, fees, devaluation and outright theft as we have seen recently. When you literally grow your assets in the back yard, you are at the mercy of nature and the free market and they are much more forgiving than bankers and politicians. By doing so you carry no counterparty risk and give yourself every opportunity to prosper.

In the end you must decide what is more secure, a bunch of digits in a computer or a herd of cattle in the pasture. In the future those digits may be in limited supply and hard to come by if you do not work for the house so another more equitable way to accumulate wealth must be used by the population. By producing farm commodities that will always be in demand and storing some of that production in livestock, seeds or other elements like gold and silver, you can accumulate and preserve the wealth you need for the future.

Advertisements

Posted on October 27, 2013, in Preparedness and tagged , . Bookmark the permalink. 2 Comments.

  1. “By producing farm commodities that will always be in demand and storing some of that production in livestock, seeds or other elements like gold and silver, you can accumulate and preserve the wealth you need for the future.”

    Exactly !

    And something you only touched lightly on, but is quite critical in the accumulation of TRUE wealth:

    “The house will always win by eating away at your assets through taxes, fees, devaluation and outright theft as we have seen recently. ”

    TAXES: When you grow or produce your own whatever, you legally avoid many taxes. THAT is such a critical point it bears almost an entire article by itself, as it is a point most folks miss.

    Example 1: Say you grow a small plot of tomatoes….maybe 15-20 plants. And off of that, you harvest all the needs for your family of tomato products…fresh eating, canned into sauce, paste, bases for chili, spaghetti sauce, ketchup, etc. Say to buy those same products in the store cost $200 for the year (figure literally snatched out of the air).

    Was $200 the true cost ? No.

    You had to go earn $200 PLUS income tax PLUS social security tax PLUS sales tax (plus a host of other taxes hidden in the cost of the product before it hit the store shelf)…..that by producing the product yourself, you did NOT pay.

    That $200 net could easily be 50-100% more you had to earn to net the 200 to buy the product (which is priced to reflect many hidden taxes along the product line, and without which, might only cost 100 !)

    So the TRUE increase in your net wealth is far greater than the simple avoided cost. But is something you have to sit and think about a while to grasp.

    Example 2: Say you did buy a cheap, rough piece of mountain land ( as we did ), but it had acres and acres of timber on it. How do you convert that timber ( which is better than money in the bank, let me tell ya ! ) to a usable form of wealth ? Small sawmill. Every building on our place has been built with lumber from our place, and additionally, I built 3 rental properties for under $40/sqft when the going rate was twice that.

    If I go to town and buy a 2×4 ( of usually inferior quality, and containing less actual wood, being 1 1/2 x 3 1/2 ), and pay, say $2.50 for it, by sawing it myself from my own timber, I have “made” about $2 ( figure 50 cents for the cost of production )…..and recall the tax issue…..I’ve made 2 bucks PLUS the taxes I didn’t have to earn and pay out ( easily another buck ), so really I earned….AND RETAINED…..$3.

    And that is JUST on the raw lumber. Turn it into a product, like a barn or rental house, or kitchen cabinet, or nice oak trim, or whatever, and you multiply the retained wealth by a huge factor.

    These are but two examples. I could cite dozens more, including produce your own energy (solar), heat your home with local wood, drill a well to produce your own water, so on and so on. The more you can produce on your own, the less income you need to earn to buy things on the open market. If we had a few hundred million people doing more for themselves, and less for the govt and the bankers, we could “starve the beast” into submission. And even if that is never reached, you can certainly improve your own lot in life !

    • Right you are Andy. That’s exactly how I look at it. When I make something myself, buy it cheap or get it free, I look at it as a net gain for the actual money I didn’t have to earn to buy it. It’s like I wrote in one of my books, if you produce most of your needs yourself you can actually live very well on $10k a year and equal someone making over $40k a year because of the real money you save. The sooner people realize that the sooner we can stabilize things and start producing again.

%d bloggers like this: