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Safeguarding Your Money with Alternative Investments – Part 1

Editor’s Note: This is a three-part series on reasons to hold alternative investments. Part 1 provides an introduction and discusses investing for privacy; Part 2 covers investing for security; Part 3 closes with investing for insurance.

Chances are, most of you reading this have a retirement account filled with some mix of stocks and bonds.  Nearly all of you have a credit card or a debit card in your wallet.  Many readers own their homes, have a savings account, or put some money away in a college fund for their children.  These are all mainstream investments, and make no mistake, they are required to live a typical American lifestyle.  Is there any need for alternative investments above and beyond these financial mainstays?

The most common definition of alternative investments includes things like hedge funds, private equity firms, or derivatives contracts.  Here at Liberty Nation, we throw those Wall Street definitions out the window and redefine the term in the spirit of liberty and freedom.  We define alternative investments as items you can own which insulate or protect you from the government, the banks, and the stock market.

Some of you may hear the term “alternative investments” and picture a guy who liquidated his 401(k) and moved to the mountains to live in a cabin and sleep on a pile of gold next to a stack of guns.  Others might envision a man who keeps all his money under a mattress, pays his bills with cashier’s checks and has never had a credit card.  Unfortunately, the Liberty Nation definition of alternative investments gets a bad rap in many circles because many people associate it with paranoia and fear.  Some individuals never consider whether or not these options are ever worth a second look, while others have a small stash of silver coins and have called it a day.  So, why bother with seriously investing in alternative choices when mainstream offerings are good enough for the majority of citizens?  Simply put, alternative investments provide three things that mainstream investments cannot: privacy, security, and insurance.

Part 1: Privacy

Ah, how we long for the days of the humble paper trail.  As in, the literal trail of paper.  Once upon a time, before computers, financial transactions were tracked manually.  Nowadays, corporations permanently and digitally archive everything you have ever done with a credit card or your bank account.  While we may never know how much our great-great-grandparents paid for their house, our ancestors will be able to see how much we spent on a cup of coffee two days ago.  Moreover, the government can see everything.

Cash is the first choice for privacy, and the amount it provides is quite reasonable, but cash has its limitations.  Specifically, cash limits the user to small, in-person transactions if they wish to stay off the radar.  Thanks to the Bank Privacy Act, banks are required by law to report any transaction greater than ten thousand dollars.  This problem is where bitcoins enter into the equation.  Used correctly, bitcoin transactions are entirely anonymous.  Stored intelligently, they are totally secure.

Bitcoins, for those unfamiliar with the digital currency, exist solely in cyberspace.  A vast network of privately owned computers talk with each other and track every single transaction through something called a blockchain, ensuring that the coins are impossible to steal or counterfeit.  Every time you use them to make a purchase, you can select a brand new randomized address for your wallet, thus preserving your total anonymity.  They transfer at the speed of light, and the user can exchange them with anybody who accepts them worldwide.  All this happens with zero government oversight or intervention.

Though many people may not feel the need to use bitcoins today, they can be held for the long haul as an investment.  If you had bought a single bitcoin when the currency debuted for less than a dollar, it would have increased in value to over twelve hundred dollars today.  Even bitcoins purchased a year ago would be worth nearly triple their value today.  They are well worth considering as an addition to your portfolio.

Holding some of your assets through a company may seem like an exotic hassle, but it can be done relatively easily once you find a good guide.  The idea here is that a Limited Liability Corporation (LLC) owns the parcel of land, the vehicle, or another piece of property.  You, in turn, are the sole owner of the LLC.  When most people go to look up details about the assets you own, they will only see a company name which can be as vague as you want it to be.  Hunting down the owner of the company will be an easy task for a Fed, but it is much more difficult for someone outside of government to do.  If you value your privacy from your fellow citizen, this option is worth exploring as well.

Lastly, consider purchasing a few pre-paid Visa gift cards with cash.  These will allow you conduct transactions at a gas pump without the need to interact with a clerk or stand in the range of security cameras or other customers.  They are also useful for their unassuming size.  A thousand dollars in cash is going to take up a decent amount of room and appear rather conspicuous.  A gift card is completely benign.  Nowadays you can find these for as little as a few dollars above the face value, with no annual fees and no expiration date.

Join us tomorrow as we explore alternative investing for security.

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