Flight #56: Is it time to buy Gold? What about I-Bonds? How to vote proxy if you own employer stock and Tax Lessons Learned

Aviation News:

• Age 67 retirement? - https://www.lgraham.senate.gov/public/index.cfm/2023/3/graham-senators-reintroduce-bill-to-address-pilot-shortage#:~:text=The%20legislation%3A,be%20renewed%20every%20six%20months
• Bill reintroduces Let Experienced Pilots Fly Act….
• Pilot Incapacitation recent events, Southwest, Envoy, and others
  • https://www.youtube.com/watch?v=hPUbr6SPcy8 

 

Questions From The Flight Deck:

• How to vote proxy if you're a stock owner.
• DFAS – Discontinue survivor benefit plan (SBP) for military retirement?
  • Pros/Cons
• Tax season lessons learned: DFAS withholding, Social Security withholding – defaults to 8%...spouse earning money – 68 cents versus 76 cents. Safe harbor – 100% of this year or 110% of last year is a safe harbor to prevent penalties. 
• The stock market has been down – why not get 5% guaranteed T-bills.
  • Sell bonds? Sell stocks? What are your savings goals? What if rates drop?
• US Dollar World Reserve Currency: https://realeconomy.rsmus.com/why-the-dollar-remains-the-worlds-reserve-currency/
  • "Why the dollar remains the world's reserve currency, and will stay that way"...APR. 17, 2023 BY JOSEPH BRUSUELAS
  • We find the recent discussion around the end of the dollar dominance bereft of any linkage to the reality of international finance and understanding of the dollar's role as the anchor of the rules-based order that governs global economics.
  • Economies like China that run surpluses need dollar-based demand from the United States to make up for their own weak consumption and high savings rates. 
  • Rather, the recent conversation is stoked by global grievances about the relative disparity of economic power and the dead end in which some economies find themselves.
  • Pilot Money Guys Flight #55: US Dollar as World Reserve Currency
  • Here's How Reserve Currencies Have Evolved Over 120 Years
    • https://www.visualcapitalist.com/cp/how-reserve-currencies-evolved-over-120- years/

 

• CDs (callable vs noncallable)
• When to sell I-bonds
  • The composite rate for I bonds issued from November 2022 through April 2023 is 6.89
  • New rates are 4.3% composite: 3.4% Inflation component and 0.9% fixed rate.
  • Kevin "The Professor" Gormley:
    • https://www.youtube.com/watch?v=v1SACB6S7kQ

 

Meat of The Mission:

Get up for health and wealth...

Should you own Gold?

Two things: Gold as an investment – diversification? Gold as a currency in times of economic collapse.

https://awealthofcommonsense.com/2015/07/a-history-of-gold-returns/

Why is gold attractive? Hot button issue...

• Gold standard...vs. Fiat currency – us versus them. Very political and ideological.

 

Three Options For Owning/Investing In Gold: 

1. Physical gold in your home, safety deposit box.
   1. How could one use physical gold in an economic collapse
   2. https://atlantagoldandcoin.com/how-will-gold-silver-coins-be-used-following-a-monetary-collapse/
2. Gold and/or Gold Miners ETF in your portfolio. Is it a diversified?
   1. How has gold performed? What about bonds?
   2. https://awealthofcommonsense.com/2015/07/a-history-of-gold-returns/
   3. Ben Carlson's stance: "My stance on gold has always been that I have no idea what's going to happen with it in the future. No one else does either."
   4. As of 2015...Even after the most recent crash, gold is actually up around 10% per year over the past decade. But it's unlikely many individuals actually participated in this rise unless they held physical gold. The Gold ETF (GLD) only had around $3 billion in assets in 2005. It then grew to nearly $80 billion by the peak in 2011-12, before falling back down to less than $25 billion more recently. Unfortunately, that means many of the bandwagon investors got sucked in very late to the bull market and lost a lot of money in the ensuing crash.
3. Physical Gold in a Self-Directed IRA.
   1. Why?
   2. Can I own physical gold in my IRA?

• If you opt for the actual metal, certain criteria apply for it to be held in an IRA. "The precious metal coins or bars must meet IRS fineness standards and must be held by the IRA trustee instead of the IRA owner," says Moy. "The gold must be stored in an IRS-approved depository."
  • https://www.investopedia.com/articles/personal-finance/091814/analysis-should-you-get-gold-ira.asp

 

Tax Implications of Gold Coins...28% 

• Physical gold (including the ETF – GLD) is tax as collectible.
• However, the IRS considers physical quantities of metal to be a "collectible." For collectibles, such as coins, art and bullion, the standard tax rate is 28%. As a result, owning physical gold, or owning funds that themselves own physical gold, means that you can pay a higher maximum capital gains rate of 28%.
• https://smartasset.com/taxes/avoid-capital-gains-tax-on-gold#:~:text=This%20is%20called%20the%20capital,a%20general%20rate%20of%2028%25

 

The Ascent of Money: A Financial History of the World - By Niall Ferguson