Recently, I listened to a podcast on techniques used by “old wealth affluent families” whose wealth has survived economic collapses, world wars, natural disasters, and more over 300 years.
How did these families sustain their wealth for so long? “A third, a third, a third.”
The first time I heard this, I wondered probably the same as you. What does “a third, a third, a third” mean?
The basic understanding is to divide wealth investments into “one-third art, one-third land, and one-third gold.”
The reason given for splitting investments into these sectors is it is believed that art, land, and gold outperform more volatile investments such as stocks, bonds, and cash on hand due to market and economic changes. In contrast, the value of art, land, and gold remain unvarying.
In economic downturns, the value of gold increases in contrast to cash. Additionally, if held gold and art can both be packed and moved to another location. Although land cannot be moved as easily, land can remain and reclaimed by the family in case of natural or economic disasters. Additionally, it has been recommended that land can reap with rewards such as building cheaply during the right real estate cycle.
Of course, there are risks in all investment strategies. However, it is important to find ways to reduce risks by investing cash in investments with lower risk. Gold, for example, may be overlooked by some investors due to the fact it does not have yield but, it can reap benefits in value if the dollar of the value decreases and additionally, if it needs to be moved.
Currently, Denny and I are expanding our investment portfolio into gold as we are restructuring our investment portfolio to include investments with less volatile assets. We will keep you update on the process and results of our progress.
References and Recommendations
Article, James Rickards ‘Three Ways “Old Money’ Holds Onto Its Riches
Podcast, A FINANCIAL CRASH IS COMING. FIND OUT HOW YOU CAN SURVIVE AND THRIVE – Robert Kiyosaki, Jim Rickards from Rich Dad Radio Show: In-Your-Face Advice on Investing, Personal Finance, & Starting a Business in Podcasts. https://itunes.apple.com/us/podcast/financial-crash-is-coming-find-out-how-you-can-survive/id833641766?i=1000393675890&mt=2
Here are blog-related posts you should take a look at:
Complete Guide to Buying and Selling Apartment Buildings
5 Ways to Invest in Real Estate with Little to No Money
Where to Start
What is your opinion on the investment strategy, “one-third art, one-third land, and one-third gold”? Have you or will you invest in any of these investment assets?