# The safest way to protect your money is to spend it



## z107 (23 Nov 2011)

There is one way to eliminate risk for deposits entirely.
It is to spend your deposits.

I am not being facetious with this. If you spend your deposits (or a portion of them) then you are realising their value.

I would suggest buying things of long term value (eg, antiques), or items that you would have to buy anyway (eg, long life food, fuel, warm, good quality clothing, old age items etc). 

Even spending money on luxuries should be considered.


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## Brendan Burgess (24 Nov 2011)

Hi U

I have moved this from the Key Post on protecting against the collapse in the euro as I don't see it as an advisable option. 

However, if people want to debate it and if there is a case for it, which I don't see, I will then link from the Key Post to this thread. 

Feel free to edit the title if it does not reflect what you are saying.

Brendan


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## cashregister (24 Nov 2011)

_ off topic stuff deleted - please restrict this thread to the subject matter only. 

Brendan_


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## z107 (24 Nov 2011)

For context, this post originally appeared here:
http://www.askaboutmoney.com/showthread.php?t=163133

Like many people, I've thought through various options on how to protect my deposits against collapse. I want my money to be able to withstand a financial catastrophe, such as the break up of the Euro.

I could convert it into another currency, but which one is 'safe', and which one will be the next to crumble after the Euro has gone? I don't know. Gold, silver etc, is another option, but I fear that I'm too late to the party with that. The smart money got there long before me and I may now be buying into a bubble.

It seems to me that traditional methods of preserving wealth may not solid as they once were, as we enter new territory. I don't know enough about various financial instruments and vehicles (as I'm neither a financial musician or mechanic) to invest in them. I believe they are all fundamentally flawed anyway as they are still based on an underlying currency.

So what's left? Well what did we do throughout the ages, before fiat currencies, before the gold standard etc? We bartered. Wealth was stored as goods and commodities.

Money is meant to be a store of wealth. A promise to pay the bearer. Well these promises look like they are going to be broken, so I'm bailing out. I'm calling in the promise and releasing my store of wealth. I know I'm going to get value for money because I know what the value of my money is, right now. 

I'm not just spending my money on useless tat, but on other items that have value. Somewhere else to store my wealth. So I'm spending my money.
What better way to spread risk as well. It also harder for the government to take away my antiques, groceries or artwork. 

Items to consider:
 - Antiques
 - Long life food (things could get _really_ bad
 - Artwork
 - Good quality clothing
 - house improvements
 - upgrading security systems
 - old age items
 - conveniences (upgrade or replace broken household appliances, robot vacuum cleaners)
 - 'Apocalypse' items


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## Conshine (24 Nov 2011)

What are:

 - old age items
and
 - 'Apocalypse' items


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## z107 (24 Nov 2011)

Conshine said:


> What are:
> 
> - old age items
> and
> - 'Apocalypse' items



Old Age items could be stuff you may need to buy when (or if) you reach old age. A bit hard to define exactly, but some people may know that they'll need certain items, due to medical conditions etc.

Apocalypse items are things to use if stuff gets really bad, like a war. Things that are easily traded, or for self defence/security.


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## niceoneted (24 Nov 2011)

I am spending a fait bit on the moment on home improvements and getting my house the way I want it - I had planned to do this over a longer period but have the money saved. I am also considering buy ing a brand new or very nearly new car (for cash) next year to replace my 7 yr old one, but knowing I will have it for a good 10 yrs. 
I am also considering the likes of art and some luxury items for myself. 
My savings would be well reduced then. I have a modest mortgage.


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## Gervan (24 Nov 2011)

I think you are right. I will buy a stove. Mine has been broken since May, and I have been saying I can manage without. But while the money is there...


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## horusd (24 Nov 2011)

I've made a few art purchases in the last few yrs. Prices have dropped thro the floor. Personally I only buy art that I like anyway, not really for investment per se.  I am also considering either doing  a few jobs on the house or moving, probably a good time to trade up a bit.


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## Marc (24 Nov 2011)

“Money itself isn't lost or made, it's simply transferred from one perception to another,” Gordon Gekko Wall Street.

Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context.

The main functions of money are distinguished as: a medium of exchange; a unit of account and a store of value.

Any kind of object that fulfills these functions can serve as money.

Therefore in order for this suggestion (to spend in order to protect wealth) to make any sense then the item acquired must meet these three criteria of the functions of money.

Otherwise the process is really just consumption and cannot be considered to be protecting wealth in any meaningful sense.

Wasting Assets such as food cannot be considered a store of value for example.

So using this framework let's consider some of the suggestions


Items to consider:
- Antiques
Generally accepted as a means of payment? Can you barter a hip replacement for a Georgian Sideboard?


- Long life food -is still a wasting asset so not a store of value. A greenhouse maybe, or an allotment or water butt anything that would help you to grow or hunt or catch food. These could be considered investments as you could receive a recurring dividend i.e. Some food
- Artwork- see antiques
- Good quality clothing - similar arguments to food above. I would consider a loom to be an investment but not a jumper.
- house improvements

An example might be putting in a new kitchen in your home. Your home already has a kitchen therefore changing it is a consumption preference you are not investing.

Whereas putting in more bedrooms is a decision which increases the utility of the property which can now accommodate more people. So this would be an investment decision.

- upgrading security systems see home improvements
- old age items -essentially this is pre-payment and would work if the future cost of an item was higher than now.

Generally speaking costs decline over time with advances in technology. Or you might be stocking up on a treatment for a problem in the future that has a cure.

- conveniences (upgrade or replace broken household appliances, robot vacuum cleaners) consumption not investment
- 'Apocalypse' items seriously do we live in West Virginia? If you see chicken licken give him my regards.


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## z107 (24 Nov 2011)

> The main functions of money are distinguished as: a medium of exchange; a unit of account and a store of value.
> 
> Any kind of object that fulfills these functions can serve as money.
> 
> ...



That's an interesting analysis, thanks for that.
I selected the items in my original post purely as an example. Some items might be a bad idea, but others may be fantastic. Please don't take them as a direct suggestion of what to spend your money on.

Some of what I've suggested is consumption. What is the point of money if it is never to be consumed? What is wrong with consumption anyway? It is releasing the value of your money.

Other items, like antiques, do meet at least two of your criteria (I don't know what 'unit of account' means). Lets say that the value of currency collapses. I have stored my wealth in antiques. Who is more likely to get the hip replacement? me with my sideboard, or joe broke with his pile of useless paper notes? If a new currency is formed, I also have the option of selling my sideboard.

If you are going to buy something anyway (like the kitchen), buy it sooner, rather than later.

You made some interesting observations with 'investments'.


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## Bronco Lane (25 Nov 2011)

Not everyone will have the money to purchase your antiques when you go to sell them. There might be a limited market with lots of people trying to sell.


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## ClubMan (25 Nov 2011)

I don't know - when war breaks out the first thing I'm going to look for is a nice _Chippendale _chaise longue!


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## gillarosa (25 Nov 2011)

ClubMan said:


> I don't know - when war breaks out the first thing I'm going to look for is a nice _Chippendale _chaise longue!


 
Reading between the lines..."after the revolution that chaise longue is mine"


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## rikt (25 Nov 2011)

I have around 110K euros in deposits one in BBVA and another in Barclays. I'm thinking of buying a house with the money. The best house I can get, now that they are cheap here, and that the banks are desperate o sell them anyway.

Is this a good idea? I live in europe.


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## horusd (26 Nov 2011)

rikt said:


> I have around 110K euros in deposits one in BBVA and another in Barclays. I'm thinking of buying a house with the money. The best house I can get, now that they are cheap here, and that the banks are desperate o sell them anyway.
> 
> Is this a good idea? I live in europe.



Buy a house for what purpose? Investment?  Despite the decline in  house prices,( and I'm not discussing that as it 's not allowed here), 110K is not a lot of money for a house.


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## Sue Ellen (26 Nov 2011)

Marc said:


> If you see chicken licken give him my regards.



  All laughing aside, very good post.



ClubMan said:


> I don't know - when war breaks out the first thing I'm going to look for is a nice _Chippendale _chaise longue!



Let me know when you're throwing it out


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## z107 (27 Nov 2011)

I do not believe that the collapse of a major currency, with apparently no contingency plans by governments (that we are aware of so far) is going to be sunshine and lollipops. The most likely outcome is probably a war of some sort, if history is anything to go by.

I don't fancy my chances of trying to get all of my savings out of a German bank.

I'll be avoiding putting the bulk of my wealth within easy grasp of any government. There won't be any dolly mixtures where we're going.


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## rayatron (27 Nov 2011)

Ive been lucky enough to have a chance at investing my meager savings(always improving) into a long term though eventually perishable food(5+years though). I like it because the basics is always something that can be relied on. Judging from the records ive looked at, whether the boom or recession, sales of some basic stuff stays nearly the same. We all need to eat, basic comforts, and basic entertainment and needs. 

I wonder if alcohol would be a good investment. Its always required, always selling, and if production slows, stuff like this would go up in value. I think in any war ever made, alcohol was always welcome


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## horusd (27 Nov 2011)

rayatron said:


> Ive been lucky enough to have a chance at investing my meager savings(always improving) into a long term though eventually perishable food(5+years though). I like it because the basics is always something that can be relied on. Judging from the records ive looked at, whether the boom or recession, sales of some basic stuff stays nearly the same. We all need to eat, basic comforts, and basic entertainment and needs.
> 
> I wonder if alcohol would be a good investment. Its always required, always selling, and if production slows, stuff like this would go up in value. I think in any war ever made, alcohol was always welcome



Unlikely that food or alcohol would make  good investments. You may personally hedge against an increase in prices for food, and fine wines or brandies and the like might be a good investment, but 12 bottles of Coors light is not likely to do the trick. Anyhow the idea of a war is pretty unlikely.


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