Back in late 06, and early 07, my wife and I were looking to remodel our kitchen. The house was mid 80's vintage and so the cabinets were obviously dated. Solid and strong cabinets, and not very worn at all at. Just dated looking. We looked into several options including new cabinets, refacing, painting etc. The problem at that time was both the price, and also the building boom. We didn't know it then, but it was on its way to peaking. The reason that was a problem was it was hard to get people to do such a small job, and nearly everyone we talked to would do something for no less than $25k. I certainly had no desire to spend $25k on a kitchen. Many people would think thats a reasonable price, but I guess it all depends what you are looking for - do you want granite tops, cherry cabinets, nice sink, etc. ? I see people on these stupid shows spending $50k. These same people are the ones in foreclosure now with their houses underwater by 20%, and they also took out HELOC's to pay for the kitchen. Smooth move, those exlax people.
I told my wife I really didn't want to spend that kind of money, and I thought we could do something fairly nice for under $15k (she laughed. thn said I'm cheap. I sighed.)
So I decided time was on our side, and quite simply I went out and bought 20 Gold coins. Around $12,600 at the time. I figured I had done well with gold since 1999, so rather than sink $12k into a halffast kitchen re-do that we'd likely regret, I decided to simply buy some coins. It Alleviated my non-purchase frustration, and we put the kitchen off until we could "afford it." (I hate that word/phrase.)
Fast forward to today: We found that there are a slew of talented people out there now more than willing do quality jobs, small jobs well under $20K. AND THEY WILL BEAT DOWN YOUR DOORS TO GET A SHOT AT ANY BUSINESS ! So now we have the cream of the crop who previously couldn't be bothered. And low and behold prices have actually COME DOWN on many materials such as granite. These places have granite coming out the ying yang. So now we are getting top tier granite countertops, even more cabinets refaced than we originaly planned, with new solid cherry doors, can and pendant lighting installed, re-done foyer wood floors replacing old tile, new vanity in hallway bathroom, and much more for less than $23k ! Its simply amazing. And this guy is going to take my 20 gold coins ! So I'm getting something that probably would have cost me easy over $30k back in early 2007, IF I WAS LUCKY to even get somebody out here, all for the meager price of $12,600 that I paid for those gold coins in 2007. No taxes on the coins. That money could have sat in the bank earning nothing.
Or worse I could have put it out in the "market" watched it go up, and then sink back down to about $7500 in value, only to rebound (MAYBE if I was lucky) back to worth around $12k, and my timing was impeccable back in March. I'd still have to come up with another $12k or so in cash for this guy, and then take a take hit selling my shares of xyz stock(s) (funds, etf's, take yur pick on the poison) on the money I would have put in the market.
Instead I just sat on those gold coins. And now I'm getting a very nice kitchen, which my wife loves designing, and now says she is glad she waited bc we can do so much more, and are getting so much more value for our money. She thinks I even splurged and am paying double what I was willing to pay in 2007.
Gold coins. How they work. A thing of beauty.
P.S. I have many more than just those 20, and also more gold related investments. But I find when I do something like that and invest for a specific purpose, it is so much more rewarding, and I know that $12,000 in 2007, works just as well today in 2009, with the value of $23,000, and really right now over $30k worth of kitchen work. Is it inflation ? Is it deflation ? I don't know. All's I know is Im getting one heck of a deal for $12k.
Also If we get a chance at a nice c wave correction here in the next few months, may I suggest you buy some gold coins, or other bullion. The next rise gold will have will be even more spectacular than any we've seen. Pick something you would have liked to buy right now (except for car.) and preferably something that will hold its value. Chose half of the highest price you'd pay for that something. Buy that value in coins, and then simply sit on them. Watch the magic ( or the horror of the dollar devaluation) whichever view point you wish to chose. I think you will see that something very affordable using gold coins in less than 6 months time. You're going to be able to keep doing that type of investment rotation many times over in the next decade.
