March 1, 2014 by Troy Baccus

Bitcoins? No. I’m Buying Gold, Real Estate and Fixed Annuities.

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Gold Coins Bozeman is getting hammered by BLIZZARD 2014 right now so I’m hunkered down in the house taking shelter and catching up on the news. I came across this article about the recent bankruptcy of Tokyo-based virtual currency exchange Mt.Gox. The company’s implosion caused massive volatility in the Bitcoin currency value . The article piqued my interest so I thought I would post a quick blog of my opinion of Bitcoins and the investments that I feel are superior to Bitcoins; namely Gold, Real Estate, and Fixed Annuities.

 

First, what is a Bitcoin?

Bitcoin is a virtual currency that is used as an alternative to government issued currency. The online currency can be used to purchase goods and services and it has been gaining in popularity. There is a Subway franchise in Pennsylvania who accepts Bitcoins and even a Bitcoin ATM machine in Austin, TX. The currency can be used to anonymously transfer funds internationally without regulation. Naturally Bitcoin is a controversial and intriguing topic and it has enthusiasts.

Are Bitcoins a good investment?

The currency value of Bitcoins has risen substantially in the past 2 years  so early investors are certainly satisfied. It’s possible that the currency could maintain upward momentum in years to come but I’m not buying in. The primary thing that makes me uneasy is massive volatility in the valuation. Following last week’s currency exchange meltdown I don’t expect volatility in the currency to go away anytime soon. The other thing that makes me uneasy is the “newness” of Bitcoins which were anonymously created in 2009.

So… Are Bitcoins a good investment? Maybe. But I’m not going to gamble my money to find out.

I’m a fan of gold, real estate and fixed annuities.

Call me old fashioned but I’m a fan of investments with either a guarantee or some level of intrinsic value. My top three picks are Gold, Real Estate and Fixed Annuities.

Gold

Bitcoins were invented in 2009 but gold has been used as a global currency since the earliest days of human trade. What I like about owning physical gold is I can hold the valuable metal in my hand and I know the value will always be there. Gold can certainly rise and fall in value but it’s absolutely certain that an ounce of gold will never expire worthless. Gold can be a great hedge against inflation because it tends to perform very well during inflationary times. Probably the most important thing to do if you decide to invest in physical gold is store it somewhere safe like a safe or safety deposit box. You can buy gold, silver, platinum and palladium online at SilverGoldBull.com. They have fully insured shipping with tracking numbers on all orders and deliveries require a signature. The shipping and insurance is free on orders over $5,000. SilverGoldBull also has a gold storage facility in Canada for clients who need help with storing a gold collection. Visit SilverGoldBull.com>>

Real Estate

What I like about real estate, and especially rental properties, is the tangibility of the investment and the tax advantages. Rental properties have the tax advantage of depreciation on paper while in-fact the asset could actually be gaining real value. The great thing about rental properties is your rental income can be about the same as a mortgage on the property. The interest paid on a mortgage for a rental property is also a tax write off. Let’s not forget that once the mortgage on a rental property is paid off your rental income from the property can be a great supplement to income in retirement. On the downside property management can come with headaches and expenses. Real estate can lose value too. Remember 2009? Be careful and don’t buy more real estate than you can afford.

Fixed Annuities

Fixed annuities are savings vehicles which grow funds at a guaranteed rate for a set period of time. Current fixed annuity rates are hovering around 2.5% to 3% guaranteed annually for 4 to 7 years (many options available). Annuities are efficient savings vehicles because funds are allowed to grow on a tax deferred basis..That’s right, no tax on the gains in an annuity each year. The IRS treats annuities as retirement vehicles therefore additional taxes can apply if you access funds prior to age 59.5. For that reason, use annuities for retirement saving. If you want to discuss annuities send us an email or visit our Annuity Page.

Now… I think I need to brave the cold and do some snow shoveling…


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Disclosure: An annuity is an insurance product that can be used as part of a retirement strategy. Annuities are not FDIC insured, not bank guaranteed, and may lose value if surrendered early. An annuity is subject to the claims-paying ability of the issuing insurance company. Before buying an annuity, consider the objectives, risks, charges, and expenses of the annuity. Please read all disclosures carefully before buying an annuity. Please review your issued annuity policy during any “free look” term offered by the insurance carrier to ensure accuracy. Because annuity interest rates fluctuate, any rates listed above might not be current. As such, any annuity rates listed on this page are only believed to be accurate as of the date shown at the top of the page. Montana Life Group is compensated by insurance carriers for the sale of annuities. Montana Life Group is compensated by SilverGoldBull.com for precious metals purchases directed from this site. Montana Life Group has prepared the material on this page for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

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