Two more High Yield Low Risk Investments - Part Two

We all work hard for the money we earn. Most people understand that due to inflation (or more accurately the devaluation of the dollar) we can not just stuff our savings in the mattress and expect to see it grow. In fact for the last few years we have seen three to four percent inflation which means that for every dollar we earn, we can buy three to four percent less than we could the year before. In order to either keep up with inflation or hopefully see our savings grow we turn to investment vehicles. There are several traditional investments available from your bank or stock broker. Most traditional investments earn between 3 – 15% during good years. Lately with our economy where it is, we are seeing 0.5 – 2% growth from traditional investments. Remember that the old adage still applies, “The higher the yield the higher the risk”.

I mentioned two other non-traditional investment ideas in my last blog post and this time I would like to show you two others that can yield fairly high returns with very little risk. Other than paying off your debt which yields the highest return for your investment dollars, the second highest yielding investment that I have found anywhere will probably surprise you as well unless you have been reading my blog for a while. It is one that most people would never consider to be an investment because it is so easily overlooked. How many traditional investments do you know of that will give you an 18% return on your money, and even if they don’t they are guaranteed to give you back 100% of your initial investment? Not many, I believe. There is one non-traditional investment that does provide that security, here it is: Food. Everyone is complaining about high food prices, but were you aware that food prices rose 18% from 2008 to 2009? I have mentioned that storing extra food today will provide your family the ability to eat if you have some sort of local emergency. I usually think of it as food insurance. It also makes a lot of economic sense to store some canned goods and long term store-able items such as rice, beans, and pasta. There are a lot of other food available in your local supermarket that store well. Don't forget to use your coupons and try for those buy-one-get-one-free items to save money. There you have it, you can have your investments and eat them too.

The other non-tradition investment vehicle that is becoming more mainstream lately is investing in Precious Metals. I have mentioned in previous blog posts about how precious metals hold their value. An ounce of silver purchased just two years ago would have cost you $5.00 and today that same ounce is selling for a little over $18.00. There are a few tin foil hat wearing folks on the Internet that claim that the days are numbered for our current fiat based money system, and we should all go out and convert all of our savings to gold. Again there is probably some truth in their ramblings but when you take just about anything to the extreme you tend to lose. I personally think that the proper level of investing in precious metals lies in the range of 5% to 15% of your total investment portfolio. This is where you must use your own common sense and invest at a level that you feel comfortable. You might limit yourself to just 1% or you might feel comfortable at 20% or higher. While there are several methods of purchasing precious metals via COMEX and ETF vehicles, I tend to stay away from them at this time. When it comes to precious metals I think there are some good investment opportunities in the paper investments through brokers, but again the higher the return the higher the risk. For now there is an old rule that I follow because I think is very wise, “If you can't touch it, you don't own it”. Physical gold and physical silver are tangible assets. If the stock market crashes or the brokerage firm that holds your gold/silver goes bankrupt your metal investments can vanish overnight. One other nice feature of investing in physical precious metals is you can start with very small amounts of money. Purchase just one, one ounce silver round at your local coin dealer and you are in the market. If any of you are interested in purchasing silver or gold I have a couple of suggestions that I will share with you via email if you ask.

Your feedback is important to me. Let me know what you think of my blog. You can email me at larrygriffin@carolina.rr.com or drop in for a visit on Facebook. I am always happy to share ideas with others and hopefully answer some of your questions. By working together we can build happier, more secure, and more self sufficient lives for our families.