Sunday, December 7, 2008

The most secure places to put your remaining assets.

Unless all your worldly assets are tied up in cashmere sweaters, Prada or food, chances are, you’ve lost at least lost 40% of your net worth. And no matter where your remaining assets are, you’re probably also deeply in debt. Your main concern right now is to protect what little capital you have left

Some say keep it in the market; now is no time to sell. They argue that sooner or later it’ll go back up again. Aside from the obvious question of whether the upturn will happen in this millennium, what if some emergency expense pops up when the market is at its most volatile? You could wind up selling your entire portfolio to buy a tank of gas when technically, a tank of gas should really cost you half your portfolio. Or what if the market crashes and burns completely, leaving you with no pension and a worthless portfolio?

Some people still prefer the “security” of a large institution for their remaining assets. Most banks offer FDIC protection for deposits under $100,000, so even if the bank goes under, the insurance covers your $100. That’s providing the insurance company doesn’t go under, of course.

You may want to do a rudimentary check to make sure your chosen bank won’t be melting down soon. Extensive research, Googling and common sense should be your guide. My general rule is if a bank has recently sent me a pre-approved credit card offer, they’re a poor risk and will likely go under soon. What kind of idiotic company would extend credit to me? That probably eliminates every bank you’ve ever heard of.

Many banks won’t accept deposits of less than $100. Those that do tend to get a little uppity when presented with a deposit in 20 lbs of rolled pennies. You might get a little more respect and service from a piggy bank, without the fees.

Speaking of fees, if you decide to go the bank route, you must be vigilant. If you’re not paying attention, your $100.00 deposit could become a negative balance in a matter of months. Be prepared to spend at least two working days a month scouring your statements and balances with a fine tooth comb, and then another two working days trying to find the person to talk to, who will return the $44.00 in hidden fees to your account. In other words, you should really be unemployed to make having a bank account a sensible option for your remaining assets..

Which leads to another tried and true option: the mattress. The pros of the mattress are obvious: Unlike a bank account, when you put your money into a mattress, you know you’re also getting a service—a place to sleep. And unlike a bank account, you won’t wake up one morning to find that half your money is missing in service fees (unless you shop in your sleep) .

But the lack of portability can also be considered a plus. Since you can’t carry your mattress around like a debit or credit card, you’ll find it harder to impulsively fritter your life savings away on a mocha frappucino and ant traps.

But in these troubled times, we should be considering new places to put our assets rather than resorting to methods that have been used in the past. Here are a few thoughts:

Stuff it in your bra. If you’ve ever considered breast implants, this could kill two…no, three birds with one stone. If you’re over 40, you can be certain that nobody will ever touch your money but you. And it’s one of the few places left where you have the hope of getting a return on your investment. Rumor has it, that’s where Dolly Parton keeps her assets and even in a lousy economy, they seem to be growing.
If you happen to be male, apply the same concept to your pants.

Diversify—Keep some under the couch cushions, some in various pockets, briefcase, glove compartment, use some as bookmarks. This way, you’ll never lose everything and you get to experience the elation of finding five bucks in your pocket every now and then. It may be the only source of joy you have left.

Buried in a jar in your back yard (if you still have one). It’s safe, cheap and jars are portable. If you must flee the premises suddenly, the jar won’t hinder your escape, unless you can’t remember where you buried it. Make detailed notes or a map.

Booze and guns. Statistics show that even in the deepest darkest depression, booze and guns are always in demand. Stock up while the price is still low and sell when demand peaks. This may be one of the few places to put your money that could earn dividends. And if not, you still have the booze and guns to comfort you.