"Don't Keep Your Cash In The Bank": 6 Assets That Are Better & Safer Than Cash
Summary
TLDRThe 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
💸 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.
🏅 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.
🏭 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.
Mindmap
Keywords
💡Inflation
💡Precious Metals
💡Industrial Commodities
💡Safe Haven Currencies
💡Sovereign Guarantee
💡Value Stocks
💡Real Estate
💡Collectibles
💡Gold ETFs
💡Real Estate Investment Trusts (REITs)
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
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