Economic uncertainty and turmoil around the world is leaving investors looking for a “safe” place to invest money. There are as many different investment strategies as there are investment gurus touting the safest place to invest your money in this economy. But what really constitutes a “safe investment” these days?
Currently in most of the major cities across our nation, people are gathered in parks and banding together to “Occupy” and protest. What they are protesting, even they aren’t in agreement on. But they are bent on shutting down Wall Street, burning trash in the streets, and vandalizing businesses. All while 90% of Americans are able to get up and go to work every day. Imagine if things got really bad. Just look at the protests in Greece or France right now that are sparked by their economic woes. So far our protests are reminiscent of those from the 1960’s. But what if our economy deteriorates, and the protests become like those of the 1860’s?
In my mind the definition of a “safe investment” has changed somewhat over the past year. As a land agent I believe land is inherently a good place to invest money; one that has historically shown appreciation in value. And I believe rural land, if purchased at the right price, is still a great investment to make. But it is the word “safe” that I have placed more weight on in recent months. Here is why I personally believe land is the safest investment the average person with some means can make now.
Land is Permanent
When you purchase land, you can rest assured that your investment will be in the same place every day. It is not going anywhere, because it is fixed. I read in a May 2010, New York Times article that up to 75% of trades made on the NYSE are done electronically, taking place in millionths of a second. These are computer-generated transactions with no human involvement other than inputting what should signal a trade. This scares me to think that so much of our nation’s wealth depends on this imperfect system to work perfectly. All of that money is simply floating around in the air. Not so with land. It is a certainty that if the sun comes up tomorrow, your land will be there too.
Land is Useful
Stocks, bonds, and gold have all been solid investments at times, however In periods of uncertainty, people should put their money into an asset that not only has potential to appreciate in value, but is also useful. Rural land is the safest investment to me because if things get really bad in our country it may be necessary to grow your own food, fuel your own home, and provide your own water for some period of time. You simply cannot do this in a studio apartment in a major city. In this survival scenario, owning a property than can sustain livestock, support some agriculture, and provide fuel in the form of wood or gas will be more important than having gold bars and stock certificates in your safe deposit box. If you don’t own land, you’ll be looking for someone you know who does.
Land is a Buffer
People are great. Crowds are crazy. Mobs are madness. People in close confines meld into mobs that lose all reason in a hurry. Just last week we witnessed the riots at Penn State by students that were incensed at the firing of Joe Paterno. Their support for the coach degenerated into flipping a van and setting fires in a matter of minutes. In 2009, in my small town of Marion, Alabama I witnessed about 200 people assailing the police station in protest of a person being arrested. State troopers, sheriffs’ deputies and officers from surrounding counties rushed to the scene to disperse the crowd and restore order. I have seen officers with automatic weapons on the street corners in my town. Owning acreage is a great way to put a buffer between you and the potential madness that economic distress causes. Having a defensible space will be important in that scenario.
I am not normally prone to be a conspiracy theorist or one to cry it’s the end of the world. But I look around at what is happening in Europe and see that it could happen here. Greece is going under because of a little over $50 billion in debt. The US owes more than $14 trillion. The Federal Reserve Bank is leveraged 53 to 1. If a client came to me saying they wanted to finance land with only 2% down, I would say “good luck”. Our country is there right now. The Discovery Channel recently aired “What’s America Worth?” hosted by Donald Trump. The premise of the show was Trump stating the dollar value of residences, infrastructure, agricultural assets, etc… The most telling statement Mr. Trump made was that he valued all of the residences in our nation at $16 trillion. I instantly connected the fact that Americans would need to sell nearly every private residence in the nation to cover our national debt! That is staggering and scary.
The takeaway from this article is that land is the safest place to put your money. Not merely to protect your money, but to protect you and your loved ones. This investment strategy is not limited to the super rich. Smart investors like George Sorros and Ted Turner are way ahead of me on this. This advice is aimed at the person that can scrape together at least $10,000 for a down payment and can make monthly payments of $500. In many areas, you can find a property that will sustain a family for that price. I have looked at purchasing two properties personally for my family in that range this month. I wasn’t able to negotiate a deal with either seller, but I am looking for something just like what I am writing about.
Land is the safest place to invest. If times get tough land will be a life-saver. Someone is going to own it, will it be you?
Written By Jonathan Goode.