I sold 55.13% of my precious metals holdings today, and bought a nice two-storey penthouse apartment and a plot of land.

This move is contrary to what I would consider smart, because the precious metals valuations are below what they should be, and real estate is greatly overvalued. However, I am very happy with my decision, for the following reasons.

First, this is the first real estate property I ever bought; I’ve been renting so far. The problem is, the very nice place I had rented since 2009 to 2021 lulled me into a false sense of complacency; I had a very unproblematic situation there (other than a humidity/mold problem) until the earthquake that damaged the structure so hard, the flat roof became porous to water, and the owners couldn’t fix it while I was inside, and probably can’t fix it at all due to the nature of the damage, and when water intrusion became so bad it flooded the central heating boiler and we lost both hot water and heating during the winter, I had to move in the most inopportune moment, with huge rental prices and incredibly poor choice. Renting no longer looks like a great idea, especially on the eve of a great geopolitical disaster that’s developing as we speak. Also, there is a problem with real estate that’s even worse than price, and that’s availability, The choice is poor, and when a good one appeared on the market, together with a piece of land I could later use for whatever purpose, I decided to halve both my risk and my potential earnings from metal growth; having no place that I can reliably depend on in this situation looked like something that’s far too dangerous in comparison with the possible reward in the best case scenario; the risk/reward ratio was poor. I have nothing against risk, but having so much money in form of metal, and not having a place of my own, in a situation where renting no longer feels like a good solution, that was foolhardy.

Also, my original reason for buying precious metals was to save for real estate, because money on a bank account is always too tempting to spend on some “lesser goal” that invariably appears; someone always “needs” a new car, or something along those lines. Also, I don’t trust banks as far as I can throw them, and keeping money there feels inherently dangerous. As I had a very strong “hint from above” to buy gold bullion, that’s what I eventually did, after initially dismissing the “hint” to my detriment. The problem is that I started thinking about precious metals then, and decided that they are hugely undervalued and a price revision is somewhere in the future, making it a very tempting prospect to just hold on to the gold until this comes to fruition, and only then solve the real estate problem. However, this is not the whole story, as I tried to buy real estate at several points before, and it turned out that either the houses were poorly built or inadequate, or the sellers were unreliable in some way; in any case, by trying to find something good for several years, I learned how hard it is to find that “unicorn” place, and so when one appeared, and passed several of my tests, I decided to just go for it and split my holdings just about straight in the middle, between real estate and precious metals.

Buying land was a spur of the moment thing; it felt like something that makes my situation less limited and allowed me to explore options in the future, if need arises, and although it increased the cost by a quarter, it increased potential benefits by an order of magnitude, so I just went for it.

It is good that I could do this and not enter the worst of the crisis with no money; that would be even worse than entering it without a place of my own, from which I can’t be arbitrarily thrown out when the landlord feels shit hit the fan too hard and he wants his house back. I remind you that laws and contracts are worth very little in a societal breakdown scenario. However, you can’t eat real estate, and being completely without money because I bought real estate was the reason why I missed out on a few previously available, and marginally acceptable places; buying them would dry me out completely. This, on the other hand, feels financially comfortable.

This recent drop in gold price did hurt me somewhat, but it only reduced my profits from gold by a fifth or so; it reduced my profits from 12% to 10.5%. As I said, it hurt, but not to the point where it would really compromise anything. I would be lying if I said I didn’t expect gold to grow more, but all in all, if I just left the money on the bank account, I would probably have spent it already, and it would also generate no interest if I didn’t. This way, I had moderate earnings, the kind you expect from a solid stock market investment, not from something that supposedly just sits there and makes you no money.

The nice thing is, nobody is going to ask me why I didn’t just invest money in crypto, because those who did are still nurturing their very tender nether regions. 🙂