Long term material investments instead of cash?

[dvs_dave]

So it seems that governments are sneakily ridding themselves of debt by simply allowing inflation to exceed interest rates by a considerable margin, therefore devaluing any cash deposits or debts over time.

Seems like the only way of avoiding this sneaky move over time is to buy commodities with your cash to protect its worth in the long term. Missed the boat on precious metals, and gold will likely do a "silver" fairly soon as it's over priced. So what else is worth a punt?

How about gem stones, particularly diamonds? Buy well and keep them in a safe deposit box for 20 years, they're going to be a lot more than you paid for them.

What are the pitfalls of doing this as a cash safe haven?

[NorthernBoy]

Diamonds can already me made in the lab, and De Beers are apparently holding the prices of natural ones up by restricting supply. Both of these facts suggest that you might not want to rely on them for your retirement.

What about some land? A forest is a nice thing, and might one day get planning permission.

[cymtriks]

dvs_dave said:

...and gold will likely do a "silver" fairly soon as it's over priced.

Once we get a major default todays price might look cheap. Or perhaps not.
What makes you so certain? It was higher 30 years ago allowing for inflation.

dvs_dave said:

How about gem stones, particularly diamonds? Buy well and keep them in a safe deposit box for 20 years, they're going to be a lot more than you paid for them.

They won't be worth any more at all, the money you sell them for will just be worth less.

Could I suggest a car?

How about taking a punt on the value of metals used in electric motors (Think of all those hybrids..)

Or something that will be in demand, or change value, if the climate gets colder (global warming turns out to be very wrong, think heating and wines from northern vineyards which won't happen again..)

[dvs_dave]

They've been making very high quality synthetic diamonds for 50+ years and it's not affected values of natural ones yet?

As a cash safe haven, say you've got 10k cash sat in a bank earning no more than 1% interest in a world where inflation is at 4+%. The cash value in real terms is decreasing by the day.

Buy a diamond for 10k and worst case it will appreciate at least in line with inflation meaning that after 20 years your 10k diamond (having cost you little to nothing to keep) is going to be worth approximately 80% more than that same 10k left in the bank.

Looking at historic prices, diamonds appear to be a far more stable and predictable commodity than gold.

[Jasandjules]

Buy a cheap house at auction, do it up, let it out.

[98elise]

Jasandjules said:

Buy a cheap house at auction, do it up, let it out.

Doesn't even need to be at auction. I bought a 2 bed 1970's EOT for 107k in the south east. It has off street parking and an attached garage. We are in the process of doing up for rental and we already have a tenant lined up.

[groak]

I could feel very smug about the direction this thread's going in.

(But nemesis inevitably follows hubris)

[markcoznottz]

Probably missed the boat, but Ferari f40's were making 40k a year at least up until last year, porsche 964rs's about 15k a year.

[ExChrispy Porker]

There are some real bargains to be had in antiques at the moment.

[johnfm]

1970s Porsche 911s seem to be appreciating at a ridiculous rate.

Lots of spares.
Lots of buyers.
And you can drive them if all else fails.

[dvs_dave]

I know fiat money is backed by nothing and whatever currency you choose to have deposits in could all of a sudden become worthless relative to another. Which is why I'm interested in converting cash deposits into tangible low maintenance assets that have an inherent value, be it's realised value being in renminbi's, tiddlywinks or whatever's. Buying a doer upper or a classic car is hassle, is not low maintenance and is inherently much riskier in terms of maintaining your capital.

Fact of the matter is that the actual value of cash left in the bank is depreciating by the second with inflation getting on for 5% and typical interest rates being <1%

Maybe gold is set to go higher still but what's it's long term forecast......million dollar question, but bubbles have a 100% habit of bursting.

Edited by dvs_dave on Sunday 9th October 19:46

[Skywalker]

Wine.




That is all.

[Seek]

dvs_dave said:

Which is why I'm interested in converting cash deposits into tangible low maintenance assets that have an inherent value

You mean like gold?

[Hobo]

Copper.

[caziques]

NorthernBoy said:

What about some land? A forest is a nice thing, and might one day get planning permission.

It appears wood will always be in demand - and unlike other investments it grows with time.

So yes, invest in land and trees.

(PS - I have a spare 168 acres of pine trees planted about fifteen years ago in south New Zealand if you are interested, only two hundred thousand pounds).

[RichyBoy]

They won't stop printing money now unless forced (who's going to force them to stop) so I'm sticking with gold. Would be nice to know what the people of greece are doing to preserve their wealth because after labour wins the next election we might have the same imf influence.

[audidoody]

A Rolex Sub/GMT/Explorer about five years old should do a reasonable job of beating inflation over a 10-year period as long as Rolex prices keep rising 10c a year.

[cymtriks]

So we now have:

Cars
Wine
Land
Woodland
Antiques
Copper
Gold
Diamonds
Watches
Rental property

I've often wondered what the attraction of woodlands are as investments, surely few trees at any one time will be worth cutting down and they take decades to grow back?

Shares may still be worth considering. Food retail will always be with us and even if the price goes down there are still the dividends. Typical FTSE100 dividends are circa 4.5% IIRC. Surely worth considering?

[hollydog]

NorthernBoy said:

Diamonds can already me made in the lab, and De Beers are apparently holding the prices of natural ones up by restricting supply. Both of these facts suggest that you might not want to rely on them for your retirement.

What about some land? A forest is a nice thing, and might one day get planning permission.

Diamonds are abit risky . If the powers that by ever released all the dimonds onto the open market it would devalue them massively .They hold them back to keep the price of them high .

[cahami]

Of all of the above it seems to me (as it has allways done) that copper has the highest demand, advancing economies cant advance without it.