Every week, I like to pass along some of the most interesting and entertaining stories happening in the unconventional investing world.
The sorts of stories that go great with a quiet morning, some form of drink with steam curling upward… and the unhurried time that comes each weekend.
Well, now that we’re in the dog days and even Alaska is hitting triple-digit heat indexes now and again, I’ll bet you’ve set your sights on a cooler beverage.
Regardless! Relax, read, enjoy.
That’s Not Very Safe…
For a long time, banks represented safety. Designed to keep your money safe, they would protect your deposits, even from robberies or disasters. And of course, if you had anything truly valuable hanging around the house, you always felt nervous. Better to use one of the bank’s safes to store your valuables — like a safe-deposit box.
But in the ensuing years, we’ve seen just how unsafe banks can be.
They frittered away your money on subprime loans. They created disasters that could have wiped out your balance in a blink, through no fault of your own — only government bailouts prevented such things (and not in all cases).
And it turns out, safe-deposit boxes aren’t safe at all.
The fact is you have just about zero protection when it comes to the belongings in your safe-deposit boxes — even if the contents are lost due to the bank’s negligence. (Every year, a few hundred people complain about safe-deposit thefts — many more likely never come forward.)
You’d be better off keeping your items at home, protected by homeowners or supplemental insurance.
Or of course, you could use the storage and insurance options offered by select companies — such as Hard Assets Alliance, which will store and insure any precious metals you buy through them, often for free.
Sure beats a safe-deposit box — which, while we’re on the subject, probably could do with a name change.
The 50th anniversary of Neil Armstrong taking that famous first step on the moon is fading back into the background. All the hoopla and celebration and wacky conspiratorial whispers are behind us.
But the moon landing has left quite a memorabilia boom in its wake.
Original moon rocks are invaluable — they have so much scientific value, now and in the future, that monetary value seems paltry by comparison. (Plus, there’s only one sample on Earth that might ever come up for sale.)
But iconic videos, on the other hand, feel just right for monetary value. Indeed, three original videos of the first moonwalk just went for $1.82 million at auction.
Those videos aren’t the only items that have gone for record-setting prices in the last few days — all space memorabilia have enjoyed a boom.
Part of the excitement comes from the slow opening of the new space age — this one pioneered by private companies.
But there’s no doubt — the anniversary plays a major role.
Just goes to show — if you can pinpoint an upcoming cultural moment, you can often get in on a collectible category just before it jumps in a predictable manner.
For instance, if I were you, I’d buy rare investment-grade British stamps ahead of the London 2020 stamp show.
Catch Me, You Definitely Can
There might not be a direct investing angle to this story. But a look at the biggest fails in the history of art heists is too much fun not to highlight.
From a Dali forgery that looks like it was created by a talentless 2-year-old… to the worst homage to Ocean’s 11 possible… to some thieves who were foiled by the size of their car… these eight failures are full of people who thought they were in heist movies but were actually in slapstick comedies.
Art theft does affect art prices — and more to the point, every successful theft leads to higher insurance costs. But these failures didn’t move the needle.
Everything Old Is New Again
You can’t scan the headlines without hearing about the crisis in college costs…
Tuitions shoot skyward, student debt becomes an ever-greater burden and every presidential candidate comes out with their own plan to fix the problem.
Well, some colleges are trying to figure out a solution themselves — through a modern-day form of indentured servitude.
Some universities are experimenting with income share agreements (ISAs). First proposed by Milton Friedman, ISAs might be having a moment.
Here are the basics: Say you’re an undergrad who’s totally tapped out. Your funds are gone, your grants are used up and your loans are piling sky-high.
You can get some of your tuition and other expenses paid for by the university in exchange for a percentage of your earnings over a period of future time (usually 10 years or so).
The percentage you pay varies — you’ll pay a higher percentage as an English major, for instance (because degrees in the humanities tend to lead to lower-paying jobs than, say, chemical engineering).
The amount you’ll pay back is capped at a little over twice what you borrowed. And of course, if you wind up with bad jobs, you could wind up paying a lot less than you were lent. (No goofing off for a decade to avoid payments, though. If go travel the world for a year, your clock gets paused.)
All in all, it’s a pretty good idea. It may not be right for everyone — but it’s certainly a good deal for some folks.
It’s a sad commentary that we’re back at this same sort of place again. The gap between the upper class and everyone else is opening up to levels worse than the Gilded Age — and we’re starting to see the consequences.
This feels almost exactly like the young apprentice who has to spend 10 years paying off instruction from the master…
ISAs aren’t quite as usurious — these college kids will still get to keep the majority of their future income — but we’re sliding backward toward a strict class system. And I don’t think any of us wants that.
Even those at the top — who surely must realize that too much inequality breeds unrest. If they can come for Marie Antoinette, they can come for you.
Editor-in-chief, Unconventional Wealth
P.S. Running over to your bank to check on your safe-deposit box right after you finish reading this? Know a great stupid-thief story you want to share? Know anyone who could use an ISA, which is a better deal than unshakeable, unpayable student loans? Let us know at firstname.lastname@example.org.
Ryan Cole is the editor-in-chief of Unconventional Wealth. He’s been covering the alternative investment space for nearly a decade and writing about finance and investment for almost 20 years.
Ryan has walked the walk for years, living a very unconventional life. He’s led snowmobile tours through the mountains of Colorado, settled in Japan for five...