6 Assets that are Better and Safer than Cash

In a world where inflation is soaring and traditional bank interest rates lag behind, the belief that money grows in value by keeping it in a bank account is being challenged. In this article, we will discuss six assets that serve as better and safer alternatives to cash, enabling individuals to protect their wealth against inflation and create intergenerational prosperity.

Precious Metals: Gold, Silver, and Platinum

One of the primary reasons money holds value is its ability to store wealth for the future. However, with governments continually printing money to finance deficits, the risk of currency devaluation looms large. To counter this, financial gurus recommend investing in valuable assets that are scarce and cannot be easily replicated, such as precious metals.

Gold, silver, and platinum are highly sought-after precious metals that historically have proven to retain and increase their value during times of high inflation. As an example, the price of gold has surged over the years, indicating its ability to preserve wealth. Investing in gold ETFs allows individuals to gain exposure to this precious metal without physically owning it.

Industrial Commodities: Harnessing the Power of Raw Materials

In addition to precious metals, industrial commodities present another compelling investment opportunity. These raw materials not only benefit from scarcity but also hold natural utility value due to their widespread use in various industries. Metals like silver, cobalt, nickel, and copper, which find applications in electronics, medical equipment, and clean energy technologies, are particularly attractive.

Investors can participate in the growth potential of these commodities by investing in stocks of mining companies, mining-focused mutual funds, or utilizing derivatives like futures and options.

Safe Haven Currencies: Seeking Geopolitical Stability

In today's world of fiat currencies backed by nothing but government promises, geopolitical stability is a vital factor to consider when safeguarding wealth. Safe haven currencies like the Swiss franc, British pound, and Chinese Yuan are sought after in times of economic turmoil and uncertainty due to the robust economic systems and geopolitical environments of their respective countries.

While not everyone can access Swiss bank accounts, currency ETFs and Forex Brokers provide smaller investors with exposure to stable currencies with minimal capital requirements.

Sovereign Guarantees: Backed by Strong Governments

Despite being unbacked by physical assets, fiat currencies are still considered valuable as they rely on the full faith and credit of the government issuing them. Therefore, investing in sovereign guarantees becomes a valuable way to preserve wealth.

Government securities, also known as G-secs, are a prime example of such investments. However, it's essential to research and choose stable government G-secs with investment-grade credit ratings to avoid potential risks.

Value Stocks and Mutual Funds: Striking a Balance between Risk and Returns

For investors seeking higher returns than those offered by cash or treasury investments, value stocks present an appealing option. Unlike high-risk growth stocks, value stocks are backed by strong fundamentals and offer steady price appreciation and stable dividends.

For individuals who find researching individual value stocks cumbersome, dividend-focused mutual funds offer an affordable and hassle-free alternative to gain exposure to these stable investments.

Land and Real Estate: A Time-Tested Hedge Against Inflation

Land and real estate have been coveted assets throughout history, and their demand remains steady due to various human needs, including housing, agriculture, and commercial spaces. As the population grows, so does the demand for land and properties, making them excellent inflation hedges.

Investing in real estate can be accessible through real estate investment trusts (REITs), which function similarly to mutual funds but focus on real estate properties. REITs provide a way for small investors to participate in the real estate market without the need for significant capital.

Conclusion

With inflation eroding the value of traditional cash holdings, exploring diversified investment options becomes crucial to safeguarding wealth. The six assets discussed in this article—precious metals, industrial commodities, safe haven currencies, sovereign guarantees, value stocks and mutual funds, and real estate—offer viable alternatives to help individuals weather economic uncertainties and build a secure financial future. By understanding and utilizing these investment avenues, individuals can protect their wealth and pave the way for intergenerational prosperity.