Something better than cash under the mattress?
May 4, 2013 3:29 PM Subscribe
Let's say hypothetically someone had $100,000 in cash and they wanted to convert it to some other item of equal value and store in a safe deposit box. What would the best item be? In the movies it tends to be some kind of certificate like bearer bonds, or precious metals, artwork, or jewelry. What choice is the most secure and likely to retain its value over time?
How long is your planning horizon? Are we talking about 5 years, 20 years, or 100 years, or even longer?
posted by deadmessenger at 4:03 PM on May 4, 2013
posted by deadmessenger at 4:03 PM on May 4, 2013
What do you mean by secure? In a post apocalyptic (or even just recessionary) situation I wouldn't want to try to find a buyer for a Vermeer. In an unstable political situation I wouldn't want government bonds. (My favorite part of Gone With the Wind is Scarlett's dad mentioning that all his money is in Confederate bonds.)
Without more specifics, I'm going with metals, in increments small enough to barter with.
posted by payoto at 4:17 PM on May 4, 2013 [1 favorite]
Without more specifics, I'm going with metals, in increments small enough to barter with.
posted by payoto at 4:17 PM on May 4, 2013 [1 favorite]
Best answer: Agreeing with metals, and agreeing with smaller amounts (so no 10oz or 500g gold bars), stick with easy-to-liquidate 1oz coins and include a mix of metals (platinum sells in the same ballpark as gold).
That said, the PMs market still has some deflating to go before it comes off its bubble-high of the past couple years, so I wouldn't suggest going all-in today. I might suggest starting to buy an ounce a month, and when you feel the market has bottomed, then pick up the pace. But for now, you may well lose up to a third of your investment before the wind changes again.
posted by pla at 4:44 PM on May 4, 2013
That said, the PMs market still has some deflating to go before it comes off its bubble-high of the past couple years, so I wouldn't suggest going all-in today. I might suggest starting to buy an ounce a month, and when you feel the market has bottomed, then pick up the pace. But for now, you may well lose up to a third of your investment before the wind changes again.
posted by pla at 4:44 PM on May 4, 2013
Bearer bonds are not used much these days because, unlike registered securities, bearer bonds allow whoever holds them in his hand to claim them as his. This creates obvious security risks that are not present with registered bonds (or other securities).
If you want something that would fit in a safety deposit box, convert your cash to gold or platinum or palladium. Though the prices of these metals does fluctuate over time, they will also be readily convertible for goods and services.
posted by dfriedman at 5:21 PM on May 4, 2013
If you want something that would fit in a safety deposit box, convert your cash to gold or platinum or palladium. Though the prices of these metals does fluctuate over time, they will also be readily convertible for goods and services.
posted by dfriedman at 5:21 PM on May 4, 2013
Best answer: Real estate deeds. They're not making more land.
posted by Cool Papa Bell at 6:44 PM on May 4, 2013 [3 favorites]
posted by Cool Papa Bell at 6:44 PM on May 4, 2013 [3 favorites]
I think the answer depends entirely on what you're trying to hedge against. Inflation? Collapse of the economy? Collapse of civilization? The answer will be different in every case.
posted by Justinian at 8:27 PM on May 4, 2013 [4 favorites]
posted by Justinian at 8:27 PM on May 4, 2013 [4 favorites]
In Zombie World: Remington 870 pump (and shells).
In Post-Apocalyptic World: Food. Also, Remington 870 pump.
In reality: TIPS (see first comment) or an index fund.
posted by NYC-BB at 8:33 PM on May 4, 2013
In Post-Apocalyptic World: Food. Also, Remington 870 pump.
In reality: TIPS (see first comment) or an index fund.
posted by NYC-BB at 8:33 PM on May 4, 2013
Maybe you could buy some intellectual property. Totally safe!
posted by oceanjesse at 9:36 PM on May 4, 2013
posted by oceanjesse at 9:36 PM on May 4, 2013
I think raw diamonds are traditional because they're incredibly portable. I have no idea how they do against inflation or whether De Beers will be able maintain their monopoly over the next few decades but if you want to be able to walk into another country and start over they seem like a good bet.
posted by rdr at 9:47 PM on May 4, 2013
posted by rdr at 9:47 PM on May 4, 2013
Gold is a crap-shoot. Markets fluctuate on luxury. With the status of real estate in today's market, I'd invest in some property deeds. The value of gold will obviously rebound to make quick money. Gold as a long term investment in this day and age won't get you very far, IMO.
posted by Wynkoop at 9:57 PM on May 4, 2013
posted by Wynkoop at 9:57 PM on May 4, 2013
I'm partial to real estate, being a landlord, and as it happens so are a lot of people with spare liquidity these days. If you don't need the money anytime soon, and you can wait for something to appreciate or hire somebody to manage it and give you cash flow, it's about as good as anything else out there. You have to choose which land to buy, though, and that's the real trick.
I think, though, that anything you could "put in a safety deposit box" is essentially a market good that has no guarantee of retained value. This is why there are so many investment vehicles that guarantee certain returns or at least your principal (at the cost of some risk and consequently some reward as well). Given that I watched my mother's retirement 457 (a government-employee version of the 401(k)) plummet during the financial crisis from $60,000+ to less than $30,000 in a single quarter (it eventually regained some of that), my chariness about investments is rather keen at the moment. But then investments are essentially something public.
So there are just a lot of trade-offs, no guarantees as in life, and the hypothetical holder of this $100,000, assuming it's legally held and all, would be best to seek out a fee-based financial adviser.
posted by dhartung at 10:10 PM on May 4, 2013 [2 favorites]
I think, though, that anything you could "put in a safety deposit box" is essentially a market good that has no guarantee of retained value. This is why there are so many investment vehicles that guarantee certain returns or at least your principal (at the cost of some risk and consequently some reward as well). Given that I watched my mother's retirement 457 (a government-employee version of the 401(k)) plummet during the financial crisis from $60,000+ to less than $30,000 in a single quarter (it eventually regained some of that), my chariness about investments is rather keen at the moment. But then investments are essentially something public.
So there are just a lot of trade-offs, no guarantees as in life, and the hypothetical holder of this $100,000, assuming it's legally held and all, would be best to seek out a fee-based financial adviser.
posted by dhartung at 10:10 PM on May 4, 2013 [2 favorites]
Best answer: I'm not sure what the right answer is, but "diamonds" is almost certainly the wrong answer.
posted by pont at 11:34 PM on May 4, 2013 [9 favorites]
posted by pont at 11:34 PM on May 4, 2013 [9 favorites]
Copper.
posted by oceanjesse at 7:42 AM on May 5, 2013
posted by oceanjesse at 7:42 AM on May 5, 2013
If you're concerned about TEOTWAWKI, silver coins are recognizably valuable, in manageable increments, and easily purchased. Copper is likely to continue to have value because of its usefulness, but storing a lot of it would be a huge pain. Gold is incredibly subject to price swings and speculation, but is also likely to retain value due to its usefulness. The movies use art & gems, etc., because they are more dramatic. Keep in mind that the safe deposit box is not free, so investment will lose some value because of that.
posted by theora55 at 8:18 AM on May 5, 2013
posted by theora55 at 8:18 AM on May 5, 2013
Copper? What?
Copper is something like $3 per pound. So we're looking at 16 tons of copper.
What kind of safety deposit box holds 16 tons?
posted by Justinian at 11:07 AM on May 5, 2013
Copper is something like $3 per pound. So we're looking at 16 tons of copper.
What kind of safety deposit box holds 16 tons?
posted by Justinian at 11:07 AM on May 5, 2013
I came in here just to see if anyone said comic books. They've been as reliable a store of value as anything else since the '90s, beating out other, more traditional forms of investment.
posted by gerryblog at 12:21 PM on May 5, 2013
posted by gerryblog at 12:21 PM on May 5, 2013
I'm liking the 16 tons of copper. Get $100k worth of pennies. That way if we end up in a deflationary spiral you're RICH! If we end up in an inflationary spiral sell 'em for the copper.
It does pose a storage problem, though...
posted by karst at 2:41 PM on May 5, 2013
It does pose a storage problem, though...
posted by karst at 2:41 PM on May 5, 2013
I agree about buying US Treasury TIPS (which you can do directly online) because the US government is considered to be one of the most credit-worthy entities in the world.
posted by Dansaman at 9:39 PM on May 5, 2013
posted by Dansaman at 9:39 PM on May 5, 2013
US one cent coins have been made of zink and plated with copper since 1982.
posted by The 10th Regiment of Foot at 7:47 AM on May 6, 2013
posted by The 10th Regiment of Foot at 7:47 AM on May 6, 2013
Vintage electric guitars. 1950s fender, gibson, rickenbacker, and gretsch. They seem to skyrocket in value every ten years or so... They won't fit in a standard safety deposit box, but I'd imagine some sort of safe vault storage solutions are available...
posted by stenseng at 1:58 PM on May 6, 2013
posted by stenseng at 1:58 PM on May 6, 2013
This thread is closed to new comments.
posted by the jam at 3:49 PM on May 4, 2013 [4 favorites]