"Don't Keep Your Cash In The Bank": 6 Assets That Are Better & Safer Than Cash

The conventional wisdom of keeping significant cash in a bank account has become outdated. As highlighted in the accompanying video, nominal growth from bank interest often lags real value. Soaring inflation drastically diminishes purchasing power. This persistent erosion of wealth is a critical concern for astute investors.

Understanding the actual loss incurred is vital. Cash held simply loses value over time. Smart wealth preservation demands a different approach. Several assets offer superior protection and growth potential. These strategies help build intergenerational wealth.

Here are six categories of assets considered better and safer than cash. They provide robust hedges against inflation. These investments also foster substantial growth.

Precious Metals: The Original Store of Value

Precious metals, including gold, silver, and platinum, represent enduring value. Their scarcity is a primary driver of worth. Governments frequently print more fiat money. This practice devalues paper currency over time.

Gold especially serves as a historical monetary anchor. It has protected wealth across millennia. Financial experts often recommend allocating a portfolio portion to these metals. They act as essential inflation hedges.

Consider gold’s historical trajectory. An ounce of gold cost approximately $400 before the 1950s. By 2023, that same ounce surpassed $2000. Prime XBT forecasts suggest gold could reach $10,000 by 2032. This represents a potential five-fold increase in value. While cash depreciates, precious metals tend to appreciate.

Gaining gold exposure does not always require physical possession. Gold Exchange Traded Funds (ETFs) offer an accessible alternative. These investment vehicles track gold price movements. They provide returns without the complexities of physical storage. Options range from physically-backed ETFs to those utilizing futures contracts.

Silver and platinum also demonstrate strong market fundamentals. Silver has dual roles as both a monetary metal and an industrial commodity. Platinum is critical for catalytic converters and jewelry. Diversifying across these metals enhances portfolio resilience. They are integral to any strategy for assets better than cash.

Industrial Commodities: Fueling Global Growth

Beyond scarcity, many precious metals possess significant utility. This makes them indispensable industrial commodities. Silver, for example, is crucial in electronics manufacturing. It is also used in medical equipment and nuclear reactors.

Other vital metals include cobalt, nickel, and copper. Their natural properties are difficult to replicate. This ensures high industrial demand. Demand for cobalt has skyrocketed since 2020. Its essential role in electric vehicle batteries is a key factor.

Cobalt prices reflect this surging demand. It rose from USD 20,000 per tonne in 2012. By 2022, it reached USD 40,000. This marks a 100% increase over ten years. Exposure to such raw materials significantly boosts portfolios during high demand phases.

Direct investment in raw materials presents logistical challenges. Storing large quantities of industrial metals is impractical for most. However, indirect investment avenues exist. Investing in mining companies like Rio Tinto offers exposure. Mining-focused mutual funds also provide diversification. Derivatives such as futures and options allow for price speculation. These methods facilitate access to this robust asset class.

Safe-Haven Currencies: Stability Amidst Turmoil

In the age of fiat currencies, geopolitical stability is paramount. No major currency today is backed by a physical commodity. Instead, their value hinges on national economic strength. Wealthy individuals frequently hold funds in Swiss banks. Switzerland boasts one of the world’s strongest economic systems.

The Swiss franc (CHF) is considered a premier safe-haven asset. It gains value during periods of global instability. We observed this during the Eurozone debt crisis in 2009. Similar capital flight occurred during the 2008 global financial crisis. Funds moved to Switzerland, protecting against currency depreciation.

The Swiss franc also serves as a robust alternative for international trade. During the recent Russia-Ukraine crisis, sanctions impacted dollar trades. Russia notably executed energy trades in Swiss francs. This boosted demand for the CHF. Its appreciation against other currencies was tremendous. In early 2023, one Swiss franc fetched 1.1074 US dollars. This benefited Swiss franc holders substantially. Other strong currencies include the British pound and Chinese yuan.

Accessing safe-haven currencies is easier for retail investors. Currency ETFs track exchange rate movements. Forex brokers like forex.com enable smaller investments. These platforms allow diversification into superior currencies. This strategy secures assets better than cash.

Sovereign Guarantee: Government-Backed Stability

Examine a US dollar bill closely. It states: “THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE.” This designation gained significance after 1971. President Nixon then abolished the gold standard. The dollar’s value became backed by US law. It functions as a medium of exchange.

While not backed by physical assets, fiat currencies possess sovereign guarantee. They are backed by the full faith and credit of their government. A currency’s stability mirrors its issuing government’s strength. Investing in sovereign guarantee is a valuable wealth store. A nation’s government is typically the last entity to default. A strong government safeguards national stability.

Government securities (G-secs) offer a safe investment path. These include Treasury Bills, Notes, and Bonds in the US. They offer superior returns compared to bank accounts. They are backed by the US government’s global economic strength. However, selection requires careful due diligence. Only stable governments with investment-grade credit ratings are advisable. The 2009 sovereign debt crisis in Greece serves as a stark warning. Greece required multiple bailouts. Government global strength is therefore a crucial factor.

Small investors can purchase Treasury securities directly. The TreasuryDirect portal provides access. The secondary market also offers purchasing options. These instruments represent a fundamental component of assets better than cash.

Value Stocks & Mutual Funds: Enduring Enterprise

Treasury investments offer better returns than cash. Their low risk profile, however, typically correlates with lower returns. Many investors seek higher growth potential. Stocks provide an avenue for such returns. Not all stocks carry equal risk. The stock market broadly divides into two categories: Value Stocks and Growth Stocks.

Growth stocks, common in technology, entail higher risk. They often rely on nascent ideas with significant failure potential. Value stocks, conversely, are less risky. Companies like Nucor, involved in industrial metals, exemplify this. They operate in sectors with established demand. Their fundamentals are strong and enduring.

Value stocks offer steady price appreciation. They also provide consistent dividends. Researching individual value stocks can be time-consuming. For average investors, dividend-focused mutual funds are ideal. The Vanguard High Dividend Yield Index Fund Admiral Shares is one such example. It boasts a stable dividend-paying history. These vehicles are affordable and efficient. They allow retail investors to benefit from robust equities. They are excellent assets better than cash for long-term growth.

Land & Real Estate: Tangible Foundations of Wealth

Land is considered a non-depreciable asset by accountants. Its scarcity and constant demand justify this classification. Historically, land remains a primary valuable resource. It is essential for housing, industry, agriculture, and commerce. A growing global population ensures sustained demand. Residential homes, office spaces, and commercial properties also maintain high demand. Both land and real estate act as excellent inflation hedges.

Historical data supports real estate’s value retention. A Bloomberg study found housing prices tripled between 1992 and the 2020s. This occurred despite the significant dip during the 2008 housing bubble. Real estate exposure proves beneficial when currency value erodes. Many small investors delay real estate investment. They often view it solely as a primary residence purchase. Owning a fully paid-up home is a significant net worth goal. However, gaining property market exposure is advisable at any age.

Accessing real estate investment does not require vast capital. Real Estate Investment Trusts (REITs) are available. These function like mutual funds but specialize in real estate. Ventas Inc. (VTR) is a popular US REIT. It invests in healthcare real estate, including senior housing and research facilities. Borrowing to own rental properties is another strategy. Rental income covers expenses and mortgages. It also generates profit. Real estate represents a cornerstone of diversified assets better than cash.

Collectibles: Art, Antiques, and Unique Assets

This asset class includes vintage cars, rare art, luxury handbags, and limited edition watches. Even first editions of iconic books qualify. A standard car depreciates immediately upon purchase. Vintage cars, however, often appreciate. Like fine wine, their value increases over time. Autocar reported a 1955 Mercedes-Benz 300 SLR Uhlenhaut Coupe sale. It fetched 135 million Euros in 2022. Only two such cars exist. They are rare connoisseur collectibles.

Similarly, Leonardo da Vinci’s Salvator Mundi sold for $450 million in 2017. A Saudi prince purchased it at Christie’s auction. Wealthy individuals invest heavily in limited edition items. These unique pieces are timeless repositories of value. They can command extraordinarily high prices. Finding the right buyer is key.

Investing in high-value collectibles may seem out of reach. Online marketplaces democratize access. Whatnot enables selling rare baseball cards, comic books, and action figures. Fractional ownership platforms like Konvi and Masterworks allow partial investment. These platforms broaden participation. They transform unique items into accessible assets better than cash.

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