Safe Investments in a Recession?

If your dreams are filled with nightmares of recession and impending economic doom, a user from the community weblog Ask MetaFilter asks the simple but pertinent question: What's the safest possible thing that I can do with my money? The folks at MetaFilter provide heaps of great suggestions while sticking to the low-to-no-risk requirement, suggesting everything from CDs and short term bond mutual funds to investing in yourself. As many folks are quick to point out, virtually any interest-bearing savings plan requires some form of risk—hence the reason for the interest. But some investments are safer than others, so let's hear your thoughts on safe investments in the comments.


    My safety is in property. Here's my scenario: Buy one property a year for 10 years, in areas of good growth, with good tenants. You then have (roughly) a value of $3M, a debt of $2.5M & a pretty even balance sheet. If you do nothing for the next 10 years, you will have a value of $6M, a debt of $2.5M & a very healthy income. At some point you start to borrow $100k a year (each year, tax free) & retire. Your value continues to grow exponentially, while your debt growth is linear. So recessions can come & go - you don't care!

    Of course, this is the highly simplified version. For more details, check it out at


    Australia is soon to experience the Kevin 09 mother of all recessions. Private debt is up to people's ears and many are only just starting to drown. The Reserve Bank kept interest rates too low for too long and printed money out of thin air. Higher interest rates are now the only way housing affordabilty will return. Go Kevin!

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