Prepper Finance: An Outline

Prepper Finance: An Outline

This is something I came up with a long time ago, with some recent changes, and was never able to follow through on. Just consider what might apply to you and forget the rest.

This is what I would do if I could start over. This is investment/retirement money only, not total income use. It pre-supposes extensive preps and back up funds in place all the time. At least a year of preps, a year of equivalent salary for normal things if income stops, and a large emergency cash fund for the unexpected expenses such as car repairs or medical bills.

A Prepper Finance Plan

The plan is approximately 1/3 each income producing property (35%), more or less regular financial investments, diversified as to type (33%), and precious metals (32%) to spread the risks, no matter what happens. I do not think it is possible to accurately predict what will work in the future, so I prefer to cover as many bases as possible.

If there is not a reasonable amount for an item, shift the amount 50/50 to the other assets and PM assets, and then transfer to the item when enough is accumulated.

The Warrant trading account has to be managed, as do the separate parts of the selfmanaged Permanent Portfolio Fund I know that Permanent Whole Life Insurance gets a very bad rap. I think it is unjustified, if one understands just how it works and takes advantages of the possibilities, always knowing that it, like a 401(k) or any retirement fund, is a long term investment and will not have much value, especially compared to what goes into it, during the first 20 years.

Conventional Products

With this in mind, if you are approaching retirement age or are past it, Permanent Whole Life Insurance might not be a good idea. If you can find one where you can buy a paid up policy, it would, but that costs a huge amount of money, and will only benefit you if you live quite a while longer. If you do not think the whole life insurance fits your portfolio, split the value into the other investments.

But the payoffs are great, if it is practical for you, and it is one of the few ways to pass an inheritance down to future generations with only minimal tax impacts. And be aware that one of the reasons that I like it is that the investments that pay the dividends are not just conventional stocks and bonds. The applicable insurance companies that one would want to get a Permanent Whole Life Insurance Policy with are the same ones that one would use for Annuities.

And they have a wide portfolio of investments, including hard assets such as raw and income producing property, things like businesses, leasing of railroad rolling stock and motive power, warehouses, trucking fleets, fisheries, and all sorts of things besides just stocks and bonds.

Pretty much the same goes for the Annuities. You will hear lots of bashing. Research everything and think it through.

The rest can pretty much just be watched and changes made when the overall percentages get out of whack.

Investments

I am not an investment person. This is just what I would do with a significant amount of money I wanted to diversify so as not to lose too much in any one account. Seek professional advice before you make any investments.

For someone starting out, I would build solid credit, maintain a very minimum amount of debt in order to build that credit, and otherwise pay as you go, living a reasonable lifestyle without overdoing the fun, but having some, and always buy quality for a good price rather than just cheap. Keep long range goals in mind even when considering short term decisions.

And if you are working for a company that has a retirement plan that provides matching funds, invest in that at the matching level as well, as a separate part of your retirement, as it comes out of the paycheck before you get it. Do choose some type of fund(s) that diversify that investment, too.

Income Producing Property – 35% of total

1) 20% – Income producing working farm/ranch primarily as a hedge for bad times so you’ll have food, plus income. Buy in and perhaps even some sweat equity when possible, but not to run and operate oneself.

2) 15% – Quadraplexes on corner lots in small towns with live in manager as income producing property (usually not subject to apartment rules and restrictions in most places that can have rent controls put into place)

Conventional Market Investments – 33% of total

Permanent Portfolio Fund as envisioned by Harry Browne, in a single fund 1) 5% – Permanent Portfolio Fund (PRPFX)

A Self-managed Permanent Portfolio, the four parts equalized each year

2) 2% – US Treasury Bonds (28+ years)

3) 2% – US Treasury Money Market Fund

4) 2% – Gold coins

5) 2% – Growth Funds

A set of mutual funds, dividends rolled back into each fund 6) 3% – Blue chip mutual funds (PRFDX) (FBGRX) (FBCVX) (YAFFX) 7) 1% – Gold Mining Mutual Fund (GLD)

8) 1% – Gold Royalties Mutual Fund (RGLD)

A warrant trading account, checked daily and buy/sell decisions made and implemented. (Never buy more warrants than the money would buy of the stock.

9) 5% – Warrant trading account

Deferred annuities. Paid into until retirement. (Hartford, John Hancock, Met Life, Mutual of Omaha, and Prudential)

10) 2% – Deferred annuity #1 – For monthly income

11) 3% – Deferred annuity #2 – For big ticket items A trust fund to capitalize a few projects I have in mind.

12) 2% – Commerce Trust Company

Permanent Whole Life Insurance – dividends reinvested/no withdrawals (If under 50, else put the money in the trust fund.)

13) 3% – Permanent whole life insurance

(Hartford, John Hancock, Met Life, Mutual of Omaha, and Prudential)

Precious Metals – 32% of total

Common date US mint Gold Eagle coins, kept in hand

14) 5% – 1-ounce Gold Eagle

15) 5% – ½-ounce Gold Eagle

16) 5% – ¼-ounce Gold Eagle

17) 5% – ⅒-ounce Gold Eagle

Circulated pre-1965 90% silver US coins, kept in hand 18) 2.5% – Dimes

19) 2.5% – Quarters

20) 2.5% – Halves

Common date US Mint Silver Eagle rounds, kept in hand 21) 4.5% – 1-ounce Silver Eagle

Just my opinion.

About the author:

Jerry D Young is an Author, Prepper, Consultant, Philosopher who resides in Nevada. He has written over 100 books, many of which are available at this link:

“I have been a prepper for more than 50 years. I believe that the Boy Scouts and Girl Scouts have had it right for decades…”Be Prepared.” Unfortunately, we, as a country seem to have gotten away from that philosophy. There has been a disconnect from the “Old Ways so profound, some people don’t really understand where their food comes from. 

That’s not a problem until the “System” fails. Be it from a hurricane, earthquake, tornado, flood or even a closed road or train route. The system is designed to get JUST what is needed to the stores JUST when it’s needed. So if the “System” fails, then the things we need…the things we believe will be there aren’t. That’s when being a prepper makes sense. Being able to be self-sufficient for the the time needed until the “System” recovers…regardless of how long that takes. 

That’s why so many of my books incorporate the theme of “Being prepared.” Hope you enjoy them!”