CNBC.com published an article entitled, “40-plus? It’s not too late to start saving”. The thrust of the article is that, while it’s best to start saving for your retirement long before you turn 40—it’s still possible to accumulate meaningful savings if you start shortly after 40:
“From a retirement-planning perspective, this is the decade [from age 40 to 50] where the rubber meets the road.
“Those who started socking money away sooner are best positioned to meet their long-term goals, of course, but there’s still plenty of time to shore up your savings if you’ve been hitting the snooze button on your 401(k) plan for the last 20 years. “
But what about those who haven’t saved anything and turn 50? Or even 60? Is there any hope for them to save enough for their retirement? Or is it too late to start saving? Must they instead rely only on So-So Security?
Generally speaking, those who don’t start saving for their retirement until they’re over 50 are unlikely to save enough to build a “nest egg” big enough to get them through their “golden years” with anything other than So-So Security.
But that generality depends on how they save.
In other words, if you store your savings in a bank account in the form of cash that are subject to devaluation by inflation, your post-50 savings may not generate much of a retirement “nest egg”.
On the other hand, if you saved your wealth in the form of stocks, you might do better.
In you invested your savings in U.S. bonds, which are comparatively “low” right now and therefore destined to rise, you might do even better (assuming the government doesn’t repudiate its bond debts).
But what if you started saving right now in the media of gold? We can’t predict the future with any accuracy, so there’s never a guarantee. But we can see a couple of fundamentals and probabilities:
1) As compared to paper dollars, the price of gold is up 3,700% since A.D. 1971.
2) Even after the painful correction of A.D. 2012 & 2013, the price of gold has increased by an average of 13% per year over the past thirteen years.
3) The price of gold fifteen years from now (and perhaps even five years from now) will be several times higher than it is today.
That means that instead of investing your savings in bank accounts, stock or bonds—which will be lucky to generate a 5% annual return on investment and thereby increase by 40% every seven years—you could invest in gold which can be reasonably expected to increase by a factor of 13% per year to a 135% increase over seven years. That’s over three times the increase you might expect from conventional investments. Thus, if you start saving late, you may be able to overcome that disability by saving in gold and enjoying a much higher annual return on your investment.
If the price of gold rises by 20% per year (and it did from A.D. 2000 through most of A.D. 2011), any savings invested into gold today, might increase 250% within the next seven years—and it could conceivably go even higher and/or in a shorter period.
In truth, most of your conventional investments (bank accounts, stocks, bonds, pensions, etc.) will be lucky to generate more than 5% return on investment each year. That means that $1,000 saved today in conventional investments will probably be worth no more than $1,400 seven years from now.
That same $1,000, saved in the form or gold or silver, will probably be worth $3,500 seven years from now—and maybe much more.
These kinds of returns on precious metals can’t be guaranteed, but they’re not only possible, they’re probable. Over the next seven years, the total return on gold could be at least 250%. Over the same seven years, the total return on conventional paper and digital investments are unlikely to be more than 40%. Thus, there’s a strong possibility that, over the next seven years, the valued of currency invested in gold today will appreciate (at least) six times faster than the value of currency saved in the form of conventional investments.
If you want to start saving late in life, conventional savings in the form of digital or paper vehicles are unlikely to do much for your retirement.
But, if you start saving in gold or silver, there’s a good chance that a relatively small amount of savings might serve you very well in just a few years.
When it comes to savings, the issue isn’t merely how much you save, but also in what investment media do you save? It’s a virtual certainty, that if you save your wealth in conventional investments, you’ll be lucky to receive an annual return of your investments of more than 5%. If you save in the form of precious metals, you can expect an annual return of 15% to 20%.
If 5% can’t possibly add up to enough to make much difference in your retirement savings, but 20% just might make a significant difference, where should you put your savings? Conventional investments in paper debt-instruments? Or precious metals?
The answer’s obvious.
You could even start saving for your retirement as late as age 60, and—if you lived frugally and saved in gold—you might still generate a decent nest egg for your “golden years”.
No matter how old you are and when you started saving, if you don’t have savings in the form of gold, you shouldn’t be surprised if your “golden years” turn to “brass”.