“I don’t know what to do. I know I should do something. Every time I think about it, it scares the hell out of me! Maybe I should just hide everything in a mattress.” So said my good friend Rob after inviting Jo and me to dinner for the third time in two weeks.

Rob is a sharp guy—he’s done well for himself and his family. He also recently settled the last details of his parents’ estate. Upon banking part of his inheritance, the branch manager magically appeared, introduced himself, and invited Rob into his office to discuss “some really good rates” the bank had to offer.

Apparently the drive-through window hasn’t helped Rob fly under the radar either. It still takes but a few seconds before the manager appears and starts his pitch. He’s started to wonder if the drive-through tellers have a bright yellow “sic ‘em” button.

Rob is a veteran subscriber to Miller’s Money Forever, reads our material faithfully, and isn’t shy about asking questions. He knew this large influx of cash was coming two years ago, and he’s made it a point to learn how to handle it.

Up to this point Rob’s wealth consisted of home equity, retirement plans managed by others, and some collectible hobbies about which he’s an expert. Now he has a sizable chunk of cash to invest, and he’s understandably scared.

Now, Rob has lots of book learning under his belt, but little real-life investing experience. Every option we discussed at that third dinner evoked a “Yes… but!” After much back and forth, I finally realized Rob’s Achilles heel isn’t a lack of investment knowledge. He’d already tackled that issue head on. Instead, it was his fear. Rob is not alone.

The following morning I received a timely message from a subscriber and regular correspondent, Bee H. Bee shared a laundry list of places to store money—banks, real estate, precious metals, annuities, a mattress—and all the terrible, horrible ends one’s money could meet in those places. Government seizure, market crashes, eminent domain, theft, inflation… the list went on.

Bee’s concerns are not unfounded. I even shared them with Rob under the heading: “See, you aren’t alone.”

Rob’s response: “Wow. She’s reading my mail! … I’m stewing over this very same issue…”

Then it hit me hard: What are they afraid of? Not the market and investing, but rather the adverse consequences of government behavior. After nearly every “yes, but,” Rob expressed fear about what the government might do: a haircut, bail out, bail in, outright confiscation. Call it what you will.

These fears cross partisan lines. We all have some sense—even if we can’t quite put our finger on it—that our personal and economic liberties are threatened. Heck, every time I look in the sky now, I scan for NSA drones. If I see a tiny speck, I look at the television camera, wave my hand, and say, “Hi, Mom!”

Many friends—Independents, Libertarians, Republicans, Democrats, maybe even a Green Party member or two—have told me, “For the first time in my life, I’m afraid of our government.”

Commonsense Alternatives to Your Mattress

If you’ve been reading this column for any length of time, you know I worship at the altar of practical wisdom. So, my response to Rob and Bee came from that same place.

• Maintain perspective. You and I cannot get rid of these political risks entirely (although a little international diversification will help). Vote for the candidates you think are least likely to make things worse, and move on.
  
  Learn the rules, pay your taxes, and fill out the proper forms. You don’t have to like it, but the punishments for noncompliance can be harsh. Behaving yourself is the best route.
  
  Plan and execute a retirement approach that will be successful despite foolhardy government action. This is more challenging than it was for our parents’ generation, but it is within your reach.

• Pay off debts. Rob told his accountant he was going to pay off his house with part of his inheritance. His accountant replied, “No! That’s a terrible plan. Invest the money! You can earn better returns than the interest rate on your mortgage.”
  
  Are you kidding me? Rob’s a rookie investor who’s scared to death, and his accountant is telling him to go into the market with borrowed money? Hell, that guy might as well have shown him how to buy on margin while he was at it! Rob held his ground, saying, “I plan to get out of debt and stay that way.”

• Keep saving. Once you’re out of debt, start making those debt service payments to yourself each month, first. Then live on the rest. Concerns about government confiscation or higher taxes should motivate you to save even more. If the worst comes, you want to have enough left over so you and your family survive.
   
• Get a financial checkup. Find a good financial planner, preferably one with a fiduciary responsibility to you (not all do). Mark your goals, set a realistic plan, and check in annually.
   
• Never turn over all of your money to a money manager. Some money? Sure. But ultimately, the only way to protect your money is to learn how to invest it yourself.
  
  The first time anyone clicks his mouse to make a real trade, his heart will be racing. It’s an emotional experience, but each trade—good or bad—teaches you something and brings more confidence.

• Understand the motivations of brokerage firms, insurance agents, and banks. Rob experienced this in action. The branch manager offered him a “special rate” on a CD that wouldn’t even keep up with inflation.
  
  Brokers and captive houses will gladly do a free financial checkup and encourage you to put your money in their company-sponsored funds. The same is true of insurance companies. While there may be better options, they push for what compensates them the best. Caveat emptor!
  
  A money manager with a fiduciary responsibility must put your interests ahead of theirs. You want advice from people who are not stakeholders.
  
  Always ask, “Are there better options available?”

• Learn the lessons pundits cannot always teach. When you make an asset purchase, write down why. What is your stop loss, and what are your earnings targets? When you sell, investigate what made you successful or what happened that caused you to lose money.
  
  You’ll take some losses. Just don’t panic! They don’t have to be expensive learning experiences. As a wise old baseball coach once said, “Make your outs count!”
   
• Doing nothing is a choice. It’s an expensive one at that, as your cash loses its buying power to inflation. Invest to protect, invest for income, invest for growth.
   
• Take a giant leap of faith… in yourself. Trust your ability to learn, assess a situation, control your emotions, and exercise sound judgment. You’ve already honed those skills in other areas of life; now it’s time to apply them to investing.

Throughout history governments have taxed, spent other people’s money, and made stupid rules. People have succeeded anyway, and you can be among them.

On the Lighter Side

Rob and Bee’s fears are very real. Governments have and will continue to run amok. We are far from immune to that threat here in the US. Watch Meltdown America to hear the harrowing stories of Zimbabwe, Yugoslavia, and Argentina—three failed or failing states. This online event will help you understand your risks here at home and the concrete steps you can take to protect yourself. Click here to begin watching now.

And finally…

Dear friend Toots supplied the cartoon humor for this week.

Jo really liked this one because it’s practical advice.