Today I came face to face with the Gun and Butter theory. This theory goes way back to the founding of America. The Indians had butter, the settlers had guns. We know who took over. Today the gun and butter theory is used as an investment analogy. Basically, we can buy two things with our money; gun or butter. What’s the difference between the two? Guns appreciate while butter depreciates. Examples of guns include stock, real estate, collectible, anything that goes up in value or makes income (other guns). An example of butter is almost anything in your house, except the house itself.
It’s pretty simple and easy to say that we should all be acquiring guns, because guns make more guns, while Butter just melts. However, most people go through life buying butter and no guns, or they buy butter thinking it’s a gun, when in fact it’s just a very expensive piece of butter.
Why am I talking about this? Well today is Dell’s 2nd day of their 12 days of deals and today’s deal is on their LCD displays. They have the 20.1” wide screen for $499.00 and the 24” unit for $849.00. Great prices for sure and I was really tempted to pick up two 20.1” for Sarah’s computer. Then we will have matching monitors. However, Sarah reminded me that computer hardware is really fast melting butter, and our job is to acquire more guns.
For many people the only gun they have is their house, and the truth of the matter is, it’s not really a true gun. When I look at the amount of guns I hold I realize that I really need a lot more if I’m to create the kind of lifestyle I envision for myself. The truth of the matter is, you can’t get there by working – you can only work 24 hours in a day. However, guns make more guns, and those guns make more guns, and so on. Get enough guns and you can have all the butter you want.