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

Summary

The video challenges the idea that keeping money in banks helps it grow, arguing that inflation erodes its value. It recommends six assets for building intergenerational wealth: precious metals like gold and silver, industrial commodities, safe-haven currencies, government-backed securities, value stocks, and real estate. It also highlights the potential of collectibles such as vintage cars and rare art. These assets, it suggests, offer better returns and protection against inflation than cash, helping individuals preserve and grow wealth over time.

Takeaways

• 💰 Cash in bank accounts loses value over time due to inflation, even if the nominal amount grows.
• 🏅 Precious metals like gold, silver, and platinum are valuable assets because they can't be easily created and tend to increase in value during inflation.
• 📈 Industrial commodities such as silver, cobalt, and copper are highly valuable due to their growing demand in industries like electronics and electric vehicles.
• 🏦 Safe haven currencies like the Swiss franc offer stability during economic turmoil and geopolitical instability, making them valuable investments.
• 💸 Government securities or 'sovereign guarantees' are considered safe because governments are the least likely to default, offering a stable investment option.
• 📊 Value stocks and mutual funds are a low-risk way to earn higher returns compared to holding cash, offering dividends and steady price appreciation.
• 🏡 Real estate, particularly land, is a scarce and valuable resource that tends to appreciate over time, acting as a strong inflation hedge.
• 🏢 Real estate investment trusts (REITs) allow investors to gain real estate exposure without having to buy properties directly, offering a way to earn from real estate investments.
• 🖼️ Collectibles such as vintage cars, rare art, and luxury items can appreciate significantly in value over time, especially when they are scarce or unique.
• 📚 Online platforms now allow fractional ownership of collectibles, making it easier for average investors to gain exposure to high-value items.

Q & A

Why is keeping cash in the bank considered to erode wealth over time?

Keeping cash in the bank erodes wealth because the interest rates offered by banks often lag behind inflation. While your money grows in number due to interest, its real value declines as inflation increases the cost of goods and services, meaning you can buy less with the same amount of money over time.

What is the primary reason financial experts recommend investing in precious metals like gold, silver, and platinum?

Precious metals like gold, silver, and platinum are recommended because they are scarce, valuable, and cannot be easily created or replicated. Unlike fiat currencies that can lose value due to inflation and excessive money printing, precious metals tend to retain or increase in value over time, making them a reliable store of wealth.

How have gold prices changed from the 1950s to 2023, and what is the forecast for the future?

In the 1950s, an ounce of gold could be purchased for $400. By 2023, that same ounce is priced above $2,000. According to Prime XBT's forecast, the price of gold is expected to rise to $10,000 by 2032, potentially increasing fivefold in about 10 years.

How can someone invest in gold without buying physical gold?

Investors can gain exposure to gold without physically buying it by investing in gold ETFs (Exchange-Traded Funds). Gold ETFs track the price movements of gold, allowing individuals to invest in the commodity without dealing with storage or physical ownership.

What role do industrial commodities like silver, cobalt, and nickel play in investment portfolios?

Industrial commodities like silver, cobalt, and nickel are in high demand for their utility in various industries, such as electronics, medical equipment, and electric vehicle batteries. Investing in these commodities or related companies can provide significant returns as industrial demand rises, making them a valuable addition to a portfolio.

Why is the Swiss franc considered a 'safe haven' currency?

The Swiss franc is considered a 'safe haven' currency because of Switzerland's stable geopolitical environment and strong economy. In times of global instability, such as during financial crises, investors often move their wealth into Swiss francs to protect it from currency depreciation, boosting the franc's value.

What does it mean when a dollar note states 'this note is legal tender for all debts public and private'?

This phrase indicates that the U.S. dollar is recognized by law as an acceptable form of payment for all debts. Since 1971, the dollar is no longer backed by gold but by the full faith and credit of the U.S. government, which ensures its use as a medium of exchange.

How do government securities (G-secs) help protect wealth, and what are the risks involved?

Government securities (G-secs) are considered safe investments as they are backed by the government’s ability to repay its debts, offering stability in uncertain economic times. However, the strength of the issuing government is key—weak or unstable governments, like Greece during its 2009 debt crisis, can pose risks if they default on their obligations.

What is the difference between value stocks and growth stocks?

Value stocks represent companies with stable, established demand, offering steady returns and dividends. Growth stocks, often from the technology sector, are riskier as they involve companies working on innovative ideas or technologies that may fail. Investors often choose value stocks for stability and growth stocks for higher potential returns.

How can small investors gain exposure to real estate without owning property?

Small investors can invest in real estate through REITs (Real Estate Investment Trusts), which are mutual fund-like structures for real estate. REITs allow investors to buy shares of income-generating properties, such as commercial spaces or healthcare facilities, without the need to purchase or manage physical properties.

Outlines

00:00

💸 The Hidden Truth About Bank Savings

Banks often mislead us into believing that our money grows in bank accounts due to interest. However, with inflation surging, the real value of money in savings is eroded over time. This section explains that keeping cash in the bank can lead to wealth loss, and it introduces the concept of investing in alternative assets to protect and grow wealth in real terms.

05:00

🏅 Investing in Precious Metals to Preserve Wealth

Gold, silver, and platinum—often referred to as 'God’s money'—are considered valuable because of their scarcity and ability to preserve wealth. Unlike fiat money, which can lose value due to government money printing, precious metals have historically appreciated, especially during inflationary periods. This paragraph provides insight into the rising value of gold, which is projected to increase significantly by 2032, and explains how investors can gain exposure to precious metals through physical investments or ETFs.

10:02

🏭 Industrial Commodities: Essential Investments for Future Growth

Industrial commodities like silver, cobalt, nickel, and copper hold intrinsic value due to their widespread use in manufacturing and technology, such as in electronics and electric vehicle batteries. The paragraph highlights how demand for these materials has grown, with cobalt’s price doubling between 2012 and 2022. It also outlines investment opportunities in commodities through mining company stocks, mutual funds, or derivatives like futures and options.

💶 Safe Haven Currencies: Protecting Wealth Amid Geopolitical Instability

Safe haven currencies, such as the Swiss franc, offer stability in times of geopolitical and economic turmoil. The Swiss banking system and strong currency make Switzerland a favored destination for the wealthy during crises. This paragraph explains how geopolitical events can drive up demand for these currencies, leading to substantial wealth appreciation. For smaller investors, currency ETFs and Forex brokers provide accessible ways to gain exposure to these currencies.

🛡️ Sovereign Guarantees: Government-Backed Investments

Since 1971, fiat currencies like the U.S. dollar have been backed by the government’s full faith and credit, making sovereign guarantees one of the safest investment options. This paragraph discusses the stability of government-backed securities, such as U.S. treasury bonds, and emphasizes their reliability as an investment. It also advises investors to consider the global strength of a government when choosing sovereign securities.

📈 Value Stocks and Mutual Funds: Low-Risk, High-Return Investments

While government securities are safe, they often offer lower returns. Value stocks, on the other hand, present a balance between risk and return. Unlike growth stocks, value stocks have steady demand and provide stable dividends. The paragraph suggests that investors focus on dividend-paying mutual funds like the Vanguard High Dividend Yield Index Fund to achieve stable growth and income without the complexity of picking individual stocks.

🏡 Real Estate: The Timeless Inflation Hedge

Real estate, including land and residential or commercial properties, is an ideal inflation hedge because of its scarcity and ever-growing demand. This section explains how land values have consistently increased over time and why it’s crucial to have real estate exposure early. It highlights options like REITs (Real Estate Investment Trusts) for smaller investors, which allow them to benefit from real estate without large upfront investments.

🖼️ Collectibles: Timeless Repositories of Value

Collectibles like vintage cars, rare art, and limited-edition luxury items appreciate over time, making them a valuable asset class. The paragraph shares examples of rare items that have fetched exorbitant prices at auctions and explains why the wealthy invest in unique, timeless objects. For average investors, platforms like Whatnot and Masterworks provide opportunities to buy, sell, or invest in partial ownership of collectibles.

Keywords

💡Inflation

Inflation refers to the rise in the prices of goods and services over time, which erodes the purchasing power of money. In the video, inflation is portrayed as a major threat to wealth stored in cash, as bank interest rates typically lag behind inflation rates. This results in the value of money decreasing in real terms, emphasizing the need for alternative investment strategies.

💡Precious Metals

Precious metals, including gold, silver, and platinum, are highlighted as 'God's money' and serve as a hedge against inflation. Unlike fiat currencies, these metals are scarce and hold intrinsic value, making them reliable stores of wealth. The video argues that precious metals appreciate over time, offering an example of gold’s value rising from $400 per ounce before the 1950s to over $2,000 in 2023.

💡Industrial Commodities

Industrial commodities are raw materials like silver, cobalt, and copper, which are crucial for various industries, including electronics, medical equipment, and electric vehicles. These commodities are in high demand due to their unique properties and scarcity, making them valuable investments. For example, the price of cobalt doubled between 2012 and 2022 due to its increased use in electric vehicle batteries.

💡Safe Haven Currencies

Safe haven currencies, such as the Swiss franc, are currencies that maintain their value during times of economic or geopolitical instability. The video explains that these currencies are favored by the wealthy as a store of value in uncertain times, such as during the Eurozone debt crisis or the global financial crisis. Swiss franc's stability is a prime example of how these currencies help preserve wealth.

💡Sovereign Guarantee

Sovereign guarantee refers to the backing of a currency or financial asset by the government. Since fiat currencies are no longer backed by gold, they derive value from the faith in the government that issues them. The video suggests investing in government securities, like U.S. Treasury bonds, which are considered low-risk and stable because they are backed by the full faith and credit of the issuing government.

💡Value Stocks

Value stocks are shares of companies with strong fundamentals that are undervalued by the market. These stocks offer stable dividends and steady price appreciation over time. The video contrasts value stocks with riskier growth stocks, pointing out that value stocks, such as those in industrial sectors, are less volatile and provide consistent returns. Mutual funds focused on dividend-paying stocks are recommended for retail investors.

💡Real Estate

Real estate, including land and property, is described as a non-depreciable asset due to its scarcity and constant demand. The video explains that land and real estate serve as excellent hedges against inflation, with property values appreciating over time. Investors can also gain exposure to real estate through REITs (Real Estate Investment Trusts), which allow small investors to benefit from real estate without directly owning property.

💡Collectibles

Collectibles, such as vintage cars, rare art, and limited-edition luxury goods, are presented as alternative investments that increase in value over time. These assets are often unique or scarce, making them valuable to collectors. The video provides examples like the sale of a 1955 Mercedes-Benz for 135 million euros and Leonardo da Vinci's painting, 'Salvator Mundi,' selling for $450 million.

💡Gold ETFs

Gold ETFs (Exchange-Traded Funds) allow investors to gain exposure to gold without holding physical gold. These financial instruments track the price of gold, offering a more affordable and convenient way for retail investors to benefit from gold's price movements. The video recommends gold ETFs as a viable option for those who want to protect their wealth from inflation but prefer not to store physical gold.

💡Real Estate Investment Trusts (REITs)

REITs are companies that own, operate, or finance income-generating real estate. They allow investors to buy shares and gain exposure to the real estate market without directly owning property. The video highlights REITs as a convenient way for small investors to invest in real estate, offering an example of Ventas Inc., a REIT focused on healthcare facilities. REITs offer regular dividends and can be an inflation-resistant asset.

Highlights

Banks deceive us by claiming that money grows in value in bank accounts, when in reality it grows only in numbers, not in purchasing power, due to inflation.

Precious metals like gold, silver, and platinum are considered valuable because they are scarce and cannot easily be created, making them a hedge against inflation.

Gold prices have steadily risen over time, from $400 per ounce before the 1950s to over $2,000 in 2023, and are expected to reach $10,000 by 2032.

Industrial commodities like silver, cobalt, nickel, and copper have high demand due to their essential uses in various industries, such as electronics, medical equipment, and electric vehicle batteries.

Cobalt prices have doubled in 10 years, from $20,000 per ton in 2012 to $40,000 per ton in 2022, due to increasing demand for electric vehicle batteries.

Safe haven currencies like the Swiss franc, British pound, and Chinese yuan are valuable during geopolitical instability because they offer stability and wealth protection.

Swiss franc values surged during events like the Eurozone debt crisis and the Russia-Ukraine conflict, illustrating the currency's value as a wealth multiplier.

Government-backed investments like treasury bills, notes, and bonds offer stable returns with low risk, as they are backed by the government’s financial strength.

Stocks are a higher-return investment compared to government securities, and value stocks with strong fundamentals provide steady growth and dividends.

Land and real estate are non-depreciable assets, and their demand consistently grows due to population increases, making them reliable inflation hedges.

Real estate prices, especially housing, have tripled between 1992 and 2020 despite the 2008 financial crisis, making real estate an attractive long-term investment.

Real Estate Investment Trusts (REITs) are affordable ways for small investors to gain exposure to the real estate market without needing substantial capital.

Collectibles like vintage cars, rare art, and limited-edition luxury items appreciate in value over time and can fetch substantial returns when sold to the right buyer.

In 2022, a rare 1955 Mercedes-Benz 300 SLR sold for €135 million, highlighting how limited-edition collectibles can become immensely valuable over time.

Online platforms like Whatnot allow everyday investors to buy and sell collectibles such as rare baseball cards, comic books, and action figures, offering a path to collectible investments for smaller investors.

Transcripts

one of the biggest lies Banks tell us is

that our money grows in our bank

accounts the truth is while money grows

in number because of the interest it

doesn't grow in value or in real terms

with inflation soaring through the roof

and Bank interest lagging way behind

keeping cash in the bank is actually

burning a hole in your pocket in this

video we will tell you six assets that

will stop this wealth erosion and help

you create intergenerational wealth one

God's money Gold Silver and platinum one

of the biggest reasons why money is

considered valuable is because it is

used to store value for the future

however governments today print more and

more money to finance their deficits

therefore you never know when that piece

of paper you call the Dollar will become

worthless

this is why Financial gurus recommend

investing in something valuable that is

scarce and can't easily be created this

is the biggest reason why the rich have

a portion of their portfolio always

reserved for precious metals precious

metals such as gold silver and platinum

will always rise in value when inflation

rips through the ceiling before the

1950s an ounce of gold could be bought

for four hundred dollars in 2023 the

same ounce is priced above two thousand

dollars

and according to Prime xbt's gold

forecasts this is supposed to go up to

ten thousand dollars by 2032.

that is in about 10 years your gold

investments will be five times what they

are now

so while cash keeps going down gold

keeps going up similarly other precious

metals are also better than holding cash

in the bank

if you are wondering how to gain gold

exposure to your portfolio without

buying physical gold you can invest in

gold ETFs gold ETFs are highly

affordable investment vehicles which

give you returns based on gold price

movements without you or having to hold

physical gold

2. industrial Commodities raw materials

while scarcity is one reason why

precious metals are so-called precious

these have natural utility value also

and this makes them indispensable

industrial commodities for example

silver is used in the production of

electronics medical equipment nuclear

reactors and whatnot

similarly other metals such as Cobalt

nickel and copper have high industrial

demand due to their natural properties

that can't be easily replicated by

alternative materials to draw a much

clearer picture since 2020 the demand

for Cobalt has skyrocketed the biggest

reason is its crucial use in producing

batteries for electric vehicles

commensurately its prices have risen

from US Dollars 20 000 per ton in 2012.

the US Dollars forty thousand in 2022

that's a 100 increase in just 10 years

therefore having exposure to such raw

materials can significantly boost your

portfolio in high demand phases however

not everyone can invest huge sums of

money in acquiring raw materials nor can

we physically store them or find the

right buyers therefore investing in

stocks of mining companies such as Rio

Tinto mining focused mutual funds or

even derivatives such as Futures and

options are all great ways of gaining

such exposure

3. Safe Haven currencies

in the current world of Fiat currencies

where no currency is backed by gold

geopolitical stability is a crucial

Factor while investing your money this

is why the rich always keep their money

in Swiss banks Switzerland having one of

the world's strongest economic systems

offers a much more stable geopolitical

environment therefore the Swiss franc is

considered a safe haven asset in times

of turmoil and instability we have seen

this time and again for example during

the Eurozone debt crisis in 2009 and in

the global financial crisis in 2008

sizable funds flew from these countries

to Switzerland to prevent wealth erosion

due to currency depreciation also the

Swiss franc acts as a valuable

alternative to the US dollar for

international trade for example during

the recent Russia Ukraine crisis when

the U.S imposed sanctions on Russian

energy trade Russia executed trades in

Swiss franc such events soared the

demand for the Swiss franc leading to

its tremendous appreciation against all

other currencies in early 2023 one Swiss

franc fetched

1.1074 U.S dollars making Swiss franc

holders multiply their wealth overnight

therefore Superior currencies such as

the Swiss franc British pound and

Chinese Yuan are a great store of value

but as not all of us can open Swiss bank

accounts currency ETFs and Forex Brokers

such as forex.com help smaller investors

gain currency exposure with as little as

one hundred dollars

4. Sovereign guarantee have you ever

looked at the dollar very closely it has

the words this note is legal tender for

all debts public and private ever

wondered what it means

since 1971 when President Nixon

abolished the gold standard the dollar

became the legal tender by U.S law this

made it valuable as a medium of exchange

and we started considering it a

commensurate repayment for any good or

service although no fiat currency in the

world is backed by gold or any other

physical asset they are still considered

to be backed by the full faith and

credit of the government

in plain terms your money is as stable

as the government that backs it this is

why investing in Sovereign guarantee is

a valuable store of value

the government of Any Nation is always

the last to default if the government

defaults the whole nation will default

and no strong government will let that

happen therefore one of the safest ways

of investing in Sovereign guarantee is

through government securities or G sex

however only stable government g-sacs

with investment grade credit ratings are

advisable remember 2009's sovereign debt

crisis in Greece IMF eurogroup and ECB

had to bail the company out of its debt

multiple times therefore a government's

Global strength should always be

considered while investing in G6 in the

U.S you can invest in treasury bills

notes and bonds to gain Sovereign

guarantee exposures these offer better

returns than keeping money in the bank

also they are backed by the U.S

government's strength in the global

economy small investors can buy treasury

Securities directly from the government

through the treasury direct portal or

from the secondary Market

5. value stocks and mutual funds

treasury Investments definitely provide

a better return than cash however

because of low risk they offer lower

returns than stocks and while low risk

is a crucial investment Criterion for

risk-averse investors higher returns are

sought by almost all investors and

stocks are a great way of achieving that

also not every stock is equally risky in

fact the stock market is broadly divided

into two types of stocks value stocks

and growth stocks growth stocks such as

technology stocks are riskier because

they deal in ideas and technologies that

have a high failure potential

however value stocks such as new core

which deals in industrial metals are

less risky due to established demand for

the foreseeable future therefore value

stocks with strong fundamentals not only

provide steady and stable price

appreciation but also provide stable

dividends however researching the

fundamentals of each and every Value

stock can become very time consuming and

cumbersome for average investors

therefore dividend-focused mutual funds

such as the Vanguard High dividend yield

Index Fund Admiral shares with a stable

dividend-paying history or ideal and

affordable investment vehicles for

retail investors 5. land and real estate

accountants consider land as a

non-depreciatable asset for a very valid

reason it is scarce and always in demand

since the beginning of time land has

been one of the most valuable resources

in the world we need land for homes

schools factories Agriculture and

Commercial spaces among others and with

a growing human population its demand

will never fall similarly residential

homes office spaces and Commercial

properties built on the land are also

always in demand therefore both land and

real estate act as excellent inflation

hedges in your Investment Portfolio to

look at some numbers according to a

Bloomberg study housing prices have

tripled between 1992 and 2020s despite a

huge dip during the 2008 housing bubble

therefore having real estate exposure

always comes in handy when the dollar

starts losing value however most small

investors only think of getting into

real estate much later in their lives

because they only think of real estate

in terms of the house they live in while

owning a fully paid up home is a net

worth goal for when you are in your 40s

having a slice of the retail property

Market is recommended at every age

also against the most common belief you

don't need to have a lot of money to

gain real estate exposure you can invest

in REITs or real estate investment

trusts which are similar to mutual funds

but for real estate one of the most

popular REITs in the US is ventas Inc

VTR which invests in healthcare real

estate including senior housing research

facilities hospitals among others or

else you can borrow to own rental

properties your rent will take care of

the expenses and mortgage payments and

also bring you some profits 6.

Collectibles vintage cars rare art

pieces handcrafted luxury handbags

limited edition watches and even the

first edition of iconic books fall into

this asset class in the case of a

regular car the price depreciates by

half the moment you put it on the road

however the math Works in Reverse for

vintage cars like wine they get more

valuable with time

in fact according to autocar a 1955

Mercedes-Benz 300 SLR ulenhout Coupe was

sold in 2022 for an eye-watering 135

million euros only two such cars have

ever been produced and therefore they

are considered rare Collectibles by car

connoisseurs

similarly in 2017 Leonardo da Vinci's

most controversial painting Salvatore

Mundi was bought for a massive 450

million dollars at a Christie's Auction

by a Saudi Prince the reason why the

rich spend significantly high amounts of

money on limited edition products is

that these unique pieces are Timeless

repositories of value they can fetch an

unimaginably high price if you find the

right buyer however for average

investors investing in Collectibles can

feel like a distant dream therefore

online marketplaces such as what not are

fantastic options for selling rare

baseball cards comic books action

figures and much more and if you can't

buy the whole thing you can even invest

in partial ownership of collectibles on

platforms such as convey and Masterworks