Chapter 13

Exploring Other Investment Vehicles


Digging into gold and other commodities

Considering collectibles

Exploring annuities and insurance

In the earlier chapters of this book, I present and discuss a pretty wide range of investments that are time-tested. You’ve probably already heard of and been pitched “other investments.” The vast majority of these alternative investments are flawed due to high fees, lousy performance, or worse.

In this chapter, I discuss the most common of these alternative investments: gold and other commodities, collectibles, and annuities and cash-value life insurance. In each case, I explain each investment’s redeeming qualities as well as its flaws.

Considering Gold and Other Precious Metals

Of all the commodities, gold and silver have gotten the most attention over time, especially in recent decades. Gold and silver are also known as precious metals.

Gold and silver have served as mediums of exchange or currency over thousands of years because they have tangible value and can’t be debased the way that paper currencies can (by printing more money). These precious metals are used in jewelry and manufacturing.

As investments, gold and silver perform well during bouts of inflation, especially when the inflation is unexpected. During the 1970s, for example, when inflation zoomed into the double-digit range in the United States and stocks and bonds went into the tank, gold and silver prices skyrocketed more than 500 percent.

Precious-metals ...

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