My wife is going back to work at the office she left ten years ago. Our ten year old boy is no longer in need of our constant attention, and the extra money will come in handy. We'll be able to live off of what my wife will be earning, so my fixed annual income will no longer be needed for immediate consumption. It will be a windfall that we'll have to find a sensible way to deal with.
Our plan is to divide my income into three parts, with one part going to consumption. We've been keeping consumption to a minimum over the years that we've been relying on my income. Spending a little more on ourselves is therefore high on our wish list. But we've been comfortable, and we have never held back on consumption to the point of sacrifice, so one third is plenty good enough to give us that sense of affluence that comes with the occasional luxury purchase.
The other two thirds will be divided equally between cash and gold, where cash goes into a bank account for medium term savings and gold is held for longer term savings. My wife needs to buy a new car, so that's the most likely future purchase done with our cash. Gold will eventually be traded for shares, real-estate or land as the case may be. However, all available long term data indicate that now is not the time to buy any of the alternatives to gold, and so we remain in our current position.
None of this requires any expert advice. We're not taking advice from any bank clerks. Rather, we follow my long term strategy. This saves us a lot of bother. There's no stress. We know what we're looking for and how to judge the relative price of things. This strategy has served us well so far, and I see no reason to believe that it won't continue to work fine going forward.
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| Sovereign |
By Heritage Auctions for image, Mary Gillick for coin - Newman Numismatic Portal, Public Domain, Link
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