Hiding valuables may give you a sense of greater security over your stuff, but it certainly isn’t without risk. Take the recent case of an elderly Israeli woman who had stuffed her life savings of over $1 million in her mattress, only to have her daughter unknowingly throw out the mattress because it was lumpy. $1 million was literally thrown out to the trash.

This article on MSN illustrates some of the dangers of hiding valuables pretty well. Among the tales in the article were clothes given aways with cash lining the pockets, donated books randomly stuffed with $20 bills, and $20,000 hidden under a sink that was so moldy the Treasury Department had to examine it to figure out what was left.

According to the article, the practice is more common than you might think. They quoted an estate auctioneer in Virginia as estimating that one in ten estates they handle involve “stuffers”. In many cases, surviving family members will have no idea there are valuables stashed amongst seemingly insignificant items.

So what are some lessons to be learned from this? Perhaps the following would be a good start:

• A well-placed and secure safe is the best place to hide valuables on your property. Safe deposit boxes at banks are also relatively inexpensive and offer even stronger security.
• Don’t hide stuff in items that someone may think should be replaced or donated. A well-intentioned friend or loved one may cost you nearly.
• Tell someone where you’ve hidden stuff should you be unable to remember, whether it be due to mental decline or death. Consider writing down your hiding places and leaving the list along with your will in the care of a trusted family member or friend.
• Make sure you hiding spot is reasonably well protected from the elements, excess moisture, and fire.

So do any of you stash your cash, or have you ever found something someone else stashed?

That said, I heard an advertisement on the radio this morning that I think is going off the deep end. During the Glenn Beck radio show this morning, there was an ad for a product called “The Survival Seed Bank“, which claims to offer enough non-hybrid seeds to plant a full acre crisis garden. But hold on to your tin foil hats, because according to the ad the “global elite” are cryogenically storing non-hybrid seeds in the Arctic. Additionally, seeds are being touted as having the potential to be better investments than gold and silver, and it is claimed that seeds have outperformed gold and silver in this country in the past. The ad ends with a reminder that in a true crisis situation seeds would be “the ultimate barter item.” 

The argument for having some seed to be able to plant a garden is a good one, however I wonder if people who buy this product are buying this for any other reason than fear and if they really know what to do with the seeds they are purchasing. A few things to think about:

1. Do you know anything about gardening so you could make the most of these seeds? Gardening isn’t as easy as just putting the seed in the ground and watching it grow. You have to know when and where to plant the seeds, and the when varies based on what part of the country you are in. It is often said that your first garden is an expensive venture as so many of your plants fail as you learn how to care for the plants.
2. Are you planning to use these seeds in the next year or two? If you are planning to store these seeds for the long term, you may be sorely disappointed. Germination rates for most seeds tend to drop off sharply after two years of storage.
3. Would your family eat all the crops from the seeds included in the package, or would all the seeds even grow? Some seeds just won’t grow in some parts of the country. And if the crop isn’t something your family likes, wouldn’t it be better to put together your own package of seeds based on your family’s tastes?
4. Do you have the tools and supplies to create and tend a garden? Those seeds won’t do you much good without basic garden tools or a place to plant the seeds.
5. Is this really the best investment you can make if a crisis is coming? The barter idea just cracks me up. Unless you have a ready supply of everything else you may need to support yourself (including tools, building supplies, hygenie items, etc.), you would be better off buying things you would actually need for yourself rather than buying seeds with the idea you can barter them later.

I’m not saying don’t buy this, but know what you are buying and think any preparations you make through. Don’t just buy this and put it in a closet so you can sleep better at night under the dilussion this will make you ready for the end of the world.

“We live in a free-market economy” – Do we really? The role of government keeps expanding, and the taxes to pay for that expansion are almost inevitable.

“Stocks may be volitale in the short-term, but in the long-term the market always goes up” – This “wisdom” is built on the assumption that we are basically a free-market economy and that the private sector will be relatively unencumbered to operate and create wealth. If the events that are unfolding in the political realm are indeed a fundamental shift in the role of government in our economy, I’m not sure we can consider this to be a certainty.

“It is best to put aside some money for a rainy day” – While I don’t think we should live paycheck-to-paycheck, I am beginning to question whether having excess cash in the bank is a good idea. As our official national debt is already over $10 trillion (and under GAAP would be $65 trillion), it is a very real possibility that the government could “monetize the debt” in an attempt to cover its debt obligations. That basically means that they will just print more money to pay off the debt, which would increase the supply of dollars in the economy leading to runaway inflation, eroding the purchasing power of your savings.

“If you’re money is FDIC insured, you have nothing to worry about” – Considering the recent news that the FDIC is funded at the lowest level in nearly a quarter-century, I don’t think we can take FDIC coverage as a certainty. Especially when they say that they have set aside $22bn to cover expected 2009 bank failures and have an additional $19bn left over. So at this point the FDIC holds $41bn to cover all of the insured deposits in the US? That’s a drop in the bucket! Considering that Bank of America alone had nearly $883 billion in deposits as of year-end and you can see how insignificant the insurance fund amount really is.

“If I invest in a Roth IRA or 401(k), I won’t have to pay taxes on the earnings since I put in after-tax dollars” – OK, I’ve actually questioned this one for a while (see my original post on this subject from July 2007), and my point is still the same: why are we so certain that just because the government currently allows tax-free withdrawals from these accounts in retirement that this will continue to be the case in the future? As the government grows more hungry for tax dollars, the money in Roth accounts represents an easy and ample target.

There are many other pieces of “convention wisdom” that are now called into question, but these are the biggest in my mind. This doesn’t mean that I am cutting myself off from the financial system and buying gold with all my excess cash, but I am looking to hedge my bets. My thought process is that whether my gut is completely right or completely wrong, I want my family to be in as good of shape as possible.

So going forward you will see fewer posts on investing and financial planning topics on this blog, as most of those post would be based on this same conventional wisdom that I am now questioning. Likewise, I would encourage anyone reading this blog and prior posts on these topics to read with a critical and slightly distrustful eye. Future posts will likely focus more on making your money go farther and things that can help you in the short-term.