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Some free personal finance advice for Walter White

One writer has a few words of advice on the fine art of money laundering for the main character in 'Breaking Bad.'

By Smart Spending Editor Sep 12, 2013 3:53PM

This post comes from Brett Arends from partner site MarketWatch.com


MSN Money Partner"Breaking Bad" is careening toward the climax to end all climaxes. Vincent Gilligan, the creator of AMC’s stunning hit drama series, says this weekend’s episode will be even better than the last one. Yes, this is some of the best television ever made.


Image released by AMC showing Bryan Cranston as Walter White in a scene from But as I have watched the downward spiral of protagonist Walter White, the high-school chemistry teacher turned drug lord played by Bryan Cranston, I’ve had one big thought at the back of my mind.


Doesn’t anybody here know how to launder money properly?


Walt hires attorney Saul "Better Call Saul" (Bob Odenkirk) because, in the words of his former partner Jesse Pinkman (Aaron Paul), "You don’t need a criminal lawyer... you need a 'criminal' lawyer."


Hey, Walt! You need a "criminal" financial adviser too! Just the right person, with just the right touch, could have saved you a lot of problems.


Over the course of six seasons, we’ve watched White ratchet slowly downward, from an average man desperately trying to protect his family to a ruthless sociopath who will stop at almost nothing. Each turn of the screw has been driven by necessity, of a sort, as White has resorted to ever-more-desperate measures to undo the damage caused by the previous desperate measures. (Spoiler alert: If you haven’t seen the episode that debuted Sept. 8, don’t read on till you have -- I’ll reveal what happens.)


But most of White’s problems haven’t been caused by the difficulty of cooking crystal meth to 99% purity, or even by whacking his enemies. They’ve been caused by his inability to launder the money he’s made.


It was the need to do that which led Walt and his wife Skyler to buy the carwash.


It was the purchase of the carwash that forced them to reveal their wealth to others, creating the opportunity for them, later, to become suspicious.


It was the need to keep away the IRS that caused Skyler to blow all that money covering her former boss and lover’s fraud... which in turn led Walt back into the meth business.


And it was Walter’s decision to bury his cash in the desert that allowed Hank, his brother-in-law and an agent with the Drug Enforcement Administration, and Jesse, his former partner, to spring a trap on him in last week’s episode. 


It was trying to protect that money that left Walt, at the end of last week’s episode, cowering in the bottom of his brother-in-law’s SUV while bullets rained around him.


Walt: None of this had to happen.


Forget Saul. Better call Brett! My fees are reasonable and my advice is impeccable.


In a nutshell, Walt: Haven’t you ever heard of gold bullion?



I watched in disbelief as Walt dug his giant hole in the desert and buried seven 55-gallon drums full of cash.


We weren’t told how much money it was, but blogger James Hong estimates it comes to around $40 million.


Cash? Seriously?


Greenbacks are physically impermanent. They are vulnerable to things like fire -- as Walt realized last episode. They are also vulnerable to inflation, a phenomenon the government is determined to create.


At 2% inflation, the current rate, $40 million loses $800,000 in purchasing power just in its first year. Over 20 years it will lose a third of its value. And that’s assuming inflation stays at a modest 2%.


Walt, you are the best argument for gold -- plus silver, and platinum -- I have seen in a long, long time.


Bullion is one financial asset that requires no identification. It has no nationality and no records. It would seem tailor made for money laundering.


Oh -- and it doesn’t burn.


Yes, gold bullion has come tumbling down in price in the last two years -- from more than $1,900 an ounce at the peak to around $1,360 currently. But that’s after soaring from a low of around $250 over the previous 11 years. Presumably it will continue to be volatile. But the risks and costs of gold, for Walter White, pale compared with the alternatives.


To launder his money, Walt could have walked into gold dealerships in Albuquerque, Phoenix, Las Vegas, Dallas and Los Angeles and purchased bars of bullion -- gold, silver and platinum. For cash.


Sure, he’d have to do it in stages, over time, to avoid arousing attention. But isn’t this easier than buying a carwash? (He also could have bought rare stamps, rare baseball cards, other collectibles, and cut diamonds. But bullion’s the easiest.)


Then when he wanted money to spend, he could have cashed out some of his gold, and declared a capital gain on his tax return. He’d have just looked like a brilliant investor.


The only people who would have seen his gains would have been the IRS. And as long as he was paying taxes on his gains, would they have really cared about anything else?


Gold isn’t just helpful for laundering money. It’s also great for storage -- the cause of Walt’s latest problems.


That $40 million would have bought about 21,000 pounds of gold at current prices. He could have buried it very easily in a dozen different places, and never worried about Jesse setting it on fire.


Okay, so I’m just having fun. No, I’m not going into the money-laundering business. But there is a (slightly) serious side to this.


While bullion has fallen out of favor of late, those who say gold and silver and platinum are completely useless financial investments are missing one key point. These are, today, among the few assets which give you complete privacy and anonymity.


In an era of growing federal regulation and intrusion, it’s not just drug dealers who might like a little more privacy. It might just be anybody who believes in personal freedom.


Bullion may underperform equities over time, but if I were Walter White I would hold a lot of my money as bullion, not cash.


Even if Jesse Pinkman doesn’t burn your cash, over time, inflation will. 



13Comments
Sep 12, 2013 6:53PM
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This is just stupid...buying large quantities of gold and silver will attract attention. Oh...and had Walt bought gold a couple years ago when he first started accumulating that wealth, he would have MUCH less money now than with the cash. Oh sure...gold is a hedge against inflation all right..unless it happens to lose 25% of its value in a couple years like it has.

 

I am wondering if the author of this silly article was purposely trying to sound ignorant to make it clear that he is not a criminal. Because "buy gold and silver" is certainly not a money laundering plan.

Sep 12, 2013 6:40PM
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This crap is proof what a pile of **** MSN Money is thank you!
Sep 12, 2013 8:41PM
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This truly is shockingly ignorant about laundering money. Does the moron who wrote this RELY not understand why buying a BUSINESS is better for laundering money than buying gold? Buy the business and you can siphon  extra money in every week, claiming that you washed more cars than you actually did. ONE big purchase and you can launder the money every single week.
Sep 12, 2013 6:35PM
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Never understood why anybody needed to launder money, or convert it into other than cash.

 

Just don't live too high.

 

...and burying all one's money in one place...sheesh.

Sep 12, 2013 5:11PM
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Better even than Gold is ammunition.

When the Zombie apocalypse comes. the guy with the most 22 LR ammo will be king.

Like gold, you can't eat it - but you can shoot the guy who hoarded canned goods.

Sep 12, 2013 11:30PM
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And how long would it take to buy $40 million of gold and keep the cash transactions under the $10,000 cash transaction limit to avoid a federal report?  In reporting a capital gain upon the sale of gold, one would need to have record of the original cost of the gold.  Receipts from the original purchase would create a paper trail and may require explaining the source of the cash used to buy it if you ever got audited on the capital gain. 

Furthermore, storing more than 10 tons of gold would be no simple task.

I have no need or desire to launder money, but this plan is full of holes.

Sep 13, 2013 8:37AM
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Buying gold is OK, but the part about paying taxes on the capital gains is a problem.  Pretty soon, he's going to have huge capital gains, and the basis will be huge.  The IRS should be asking, "Where did the guy get all the money to buy that gold?  We didn't see it on his taxes..."
Sep 13, 2013 10:46AM
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If you saw the very first episode this season, in the beginning, WW has a disheveled look, his house is trashed, skateboarders using his empty pool, and 'Heisenberg' written across the wall of the living room. He retrieves something hidden behind a electrical outlet - its the ricin - so what do you think he is going to do with that ? Stay tuned !
Sep 12, 2013 5:40PM
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He should have invested in meth labs in Mexico. There is no law down there for the big time druggies.
Sep 13, 2013 10:37AM
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Diversification, diversification, diversification! Gold fluctuates just like anything else. The combination of car wash, cash, gold, diamonds, collectibles, etc..may be a better way to go. The car wash is a well known method of claiming whatever you want to claim in profit because of the amount of cash involved. The key is to keep it cash-only and not accept debit or credit. To the author of this article...don't put all your eggs in one basket...investing 101!
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