As I was reading today, it seems the expectation that interest rates are down and might be down for a substantial time is still front and centre. As I rambled around the Internet on my morning exploration I was revisited by the reality of what these low rates will do to the markets and the investors who rely on this interest income.
Simply put, not many people can survive on 2.5% and they will be forced to pursue other solutions. This will most likely lead to higher stock prices as investors chase growth and dividends. How long this will stay in a positive trend is anyone’s guess. When this next stage of the market drops and a possible second wave of the chaos (similar to 2008-9) presents itself, what will people do?
I sometimes jest with clients, when they say they want to buy gold, “be sure and buy coins as you might find it difficult to cut up a gold bar to buy that loaf of bread.” I usually follow up with advice that they might be better served owning corn seed and water stores if they truly feel a full economic collapse is imminent.
After today’s reading and Internet exploration I have a different solution for the end of days. Go out and buy a Replicator 2 Desktop 3D Printer and put a solar panel on your roof. Really. Have a look at a video on YouTube (search “National Geographic Known Universe S03E06 Print Tools”). Star Trek is here.
I was amazed to see a printer/machine create a 3D object from a digital model. The printer works on what is called an “additive process.” The printer lays down successive layers on a platform until the object takes shape. The one in the video above uses a form of composite powder combined with a binding agent to create a crescent wrench that you can use. MakerBot can sell you a Replicator 2 printer for around $2,400
So now that you can make anything you need in your basement you just need to ensure a source of power and that could easily be a solar panel on your roof. When I renovated my house a few years back I made some quick inquiries into creating my own power grid. It was hard to find anyone who could do it and it was expensive. My best guess based on that homework and what I read today was that you could be looking at around $40,000 to install panels that would run everything in your house. But just think of no more electric bills
I think we should be safe for the next few years in the diversified yield space getting by on that 5-6% return, but in the event that the markets do collapse you can now have a contingency plan.
Les Consenheim is a financial adviser with Raymond James — Consenheim and can be reached at 250-372-8117 or firstname.lastname@example.org">email@example.com. Raymond James Ltd. is a Member — Canadian Investor Protection Fund. "This article is for general information purposes only. The views of the author do not necessarily reflect those of Raymond James. Individuals should seek professional advice prior to acting on any information referred to herein. "