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3 Amazing ASSETS to OWN! [And yes, Cash is Trash!] | Akshat Shrivastava English - YouTube
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an agricultural land is very difficult
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to create very difficult to destroy and
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it retains its value but on the flip
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side a flat it is easier to create it
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does not retain its value and it is easy
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to destroy also hi everyone welcome to
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today's video so let me start today's
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video by showing you a very interesting
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graphic which talks about the buying
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power of one US dollar over a 220 year
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period there are few interesting
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observation and I will take you through
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it so first and foremost you will see
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that if You observe the period between
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1800s to
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mid-1935 you will see that the
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purchasing power of dollar used to go up
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it used to come down it used to go up
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then it used to come down but after 1935
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I am indicating it through this blue
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line the purchasing power of the dollar
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has been going down down and down now
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why is this such an important video
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simply because of the fact that you
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would have heard people like Mr Ray
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dalio talking about the fact that cash
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is trash you would have witnessed the
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fact that if you keep your money me in
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bank accounts right now you are making
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two percent return on your savings
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account but the inflation is eight
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percent so you are losing cash or Fiat
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money which is INR USD Singapore dollar
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at a rate of what six seven percent also
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things are getting crazy this is a very
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very important video I am not making
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this video to scare you I am making this
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video so that you can systematically
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understand the options associated with
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something called as hard assets versus
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soft assets super super super super
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critical video one of the most important
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videos that I will do on this channel so
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please watch it till the very end also
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please press the like button that helps
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these type of videos get out to more
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people I had to sit and study these
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complex macroeconomic topics for at
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least 14 15 hours before I prepared this
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video so please give it a thumbs up that
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will make my day so let us get the
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discussion started and for all curious
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Souls out there I will also give out the
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answer as to why there has been a
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secular decline of the purchasing power
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of US dollar here and why they're used
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to to be an up and down swings of the
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purchasing power of dollars here right
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so why this difference between Phase 1
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and phase two so let us get the
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discussion started and I will structure
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this video into three parts one I will
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give you some historic context on what
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hard assets and soft assets are second I
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will help you understand the properties
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of hard assets versus soft assets third
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and finally and the most important part
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what are the three excellent hard assets
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that you can own and these are some of
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the hard assets in which I am also
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taking positions so first and foremost
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let us understand the context of hard
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assets what's a soft asset by going and
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looking in history so you must have
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realized that there used to be gold
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coins also and silver coins also back in
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the day several Emperors several Empires
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several countries have used both silver
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coins also and gold coins also but what
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you would observe is that the silver
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standard or the usage of silver as
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currency it started first for example
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some of the earliest modern day Empires
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for example the Sumerians or Egyptian
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they used silver extensively in fact
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that phase in the history was called as
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The Silver standard phase and it was
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during this time that several prominent
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Empires were trading in silver
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extensively and were using silver as a
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standard currency then over time what
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happened was that many of these Empires
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fell and the new empires that came up
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for example the British Empire they
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solidified the gold standards so gold
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standards simply meant that these
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countries or Empires started using gold
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as a tradable currency now the
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fascinating part about this piece of
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history is that many empires which
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switched from Silver standard to Gold
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Standard became prosperous for example
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Germany it used to be on Silver standard
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but after the franco-prussian war it
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switched to Gold Standard it became
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prosperous and it is still one of the
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most prosperous economies in the world
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right now on the flip side Empires that
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did not adopt gold standard they went
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down in value for example China that it
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refused to switch to Gold Standard it
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continued to use the silver standard and
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as a result it saw under a development
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for a period of 50 60 years so the
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important message that I'm trying to
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deliver here is that Empires kingdoms
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people that pick the right set of assets
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they go on to become rich and people and
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Empires and countries that invest in Bad
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Assets they become poor over a long term
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so now relating all this knowledge to
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modern day contemporary world as we are
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sitting in 2022 looking at government
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churning on its printer at a crazy speed
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so how does all this knowledge apply in
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2022 well it applies quite prominently
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now because now there are talks that the
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US dollar is going to fall there are
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talks that Chinese currency is going to
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take over the world what not it's very
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very important for you especially in
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this juncture when the world is moving
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away from the primary fiat currency or
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the Apex fiat currency which is the US
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dollar the world is moving away I hope
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all of us can see that and agree to that
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if the world is moving away from this
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fiat currency then what are some of the
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hard assets that you can invest your
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money in right now so for that let us
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first and foremost build a framework to
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understand what is hard asset versus
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soft asset so there are three primary
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differences between hard assets and soft
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assets the first key difference is that
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a hard asset is very very difficult to
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produce or increase the supply of for
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example here is the entire supply of
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gold and I'm showing you roughly 200
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audio data and you can see how smooth
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this gradient is this shows the rate at
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which the supply of gold is rising and
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it roughly Rises by two to three percent
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on an average per year why is that the
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case because gold is very difficult to
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mine and process so there is only a
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certain rate at which that gold can be
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mined and processed so therefore the
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supply of gold is very limited to begin
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with so now let me compare this to a
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soft asset and the softest asset being
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the cash or Fiat money it could be US
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dollar INR Etc and let us do the same
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analysis for USD as to how much USD has
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been added into the economy over the
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last several years so here is the slope
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for you and you can clearly see that the
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gradient is not smooth at all it is
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somewhat exponential in a way and this
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is really worrying in a way because so
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much money has been added into the
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economy and what does it conclusively
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prove that gold Supply is very hard to
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create but money supply or Fiat Supply
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is very easy to create so this is the
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first prominent difference between hard
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asset and soft asset the second key
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prominent difference between a hard
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asset and a soft asset is that a hard
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asset is very difficult to destroy for
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example something like gold cannot be
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destroyed it's chemically impossible to
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destroy gold you can melt it create new
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jewelry out of it but you can't destroy
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gold so gold is very very difficult to
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destroy but what about money so I'll
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give you the example of 2016
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demonetization that money is very easy
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to destroy in fact if you have thousand
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rupee note lying somewhere yeah try to
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buy something out of it you can't do
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anything with it that's very easy to
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destroy and governments can destroy
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money anytime that they want so this is
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the second key difference between a hard
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asset and a soft asset third and the
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most important difference between a hard
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asset and a soft asset is the amount of
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value that it loses with time so again
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let us revisit the chart that I was
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explaining you about cash or Fiat money
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or US dollar and let me then compare it
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with gold so in order to help you
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understand at what rate the dollar has
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been destroyed pick a very simple
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example let's assume that in 1935 you
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picked up like one dollar and kept it
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under your bid then how much is that
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dollar worth now it is worth point zero
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five cent so dollar has roughly lost 95
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percent of its value now the argument
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that is given here is that actually you
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know what the excess money printing it
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leads to creation of more products in
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the economy okay agree but what does
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that have to do with anything for
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example you could have simply picked
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this dollar and exchanged it with gold
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so now let me show you the goal chart so
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let's assume that you would have
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purchased 744 dollars worth of gold in
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1935. in real terms inflation adjusted
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how much did it become now it almost
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three accident price so the point that
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I'm trying to drive home is fairly
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simple that economics is very very
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complex people get married to different
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asset classes for example consider the
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case of china they were married to
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Silver they just assume that you know
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what if we have silver great we are
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never going to move to gold and guess
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what they suffered for 50 more years
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similarly right now people are believing
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that you know what if we own Fiat money
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you know what it's great asset
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government is going to take care of us
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guess what if it does not stay as a hard
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asset and if it keeps losing its value
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you will go bankrupt that's the simple
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message that I'm trying to give you now
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let us go back to this chart of gold and
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what you will observe is that there are
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periods in which gold has gone down
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right for example this period here this
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period here this period here if you look
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at any of these three gradients gold has
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lost more than 50 percent of its value
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also at times so does that mean that
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gold is not a hard asset anymore the
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answer is no because you have to take
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longer term view on assets and this is
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where people get confused what you are
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mixing is volatility of gold right there
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are phases when the cycle of gold is
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such that it is not giving any returns
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in fact it is going down in value then
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there are Cycles when it will give you a
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lot of returns so if you study the
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returns of gold for over 100 years you
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will realize that gold has given between
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5 to 12 Returns on an average but yes if
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you just keep on considering this phase
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phase one phase two phase three and look
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at that you know what gold fell by like
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50 how can it be a hard asset then
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unfortunately I'll not be able to say
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anything so if we study gold then it
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meets all three of our criterias for a
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hard asset number one it is very
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difficult to create only two percent
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Supply is added it is impossible to
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destruct and over a long term period it
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does not go down in value there can be
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short-term volatility but from a long
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term perspective it is still preserving
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your will now with that Viewpoint and
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framework out of the way let me start
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analyzing three investment opportunities
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and hard assets right now and I will
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also explain my favorite hard asset the
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first hard asset that I am going to
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discuss is real estate it is one of my
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favorite assets but what type of real
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estate this is where people get confused
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because real estates are of different
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different types and the nature or the
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hardness of that real estate changes
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with the type of real estate that you
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are buying so let me juxtapose this
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example if you go and if you buy a flat
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in the 70-story building then what is it
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that you are exactly owning then you are
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owning this particular unit now compare
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this with owning an agricultural land
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now again use that same framework that
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number one is agricultural land easy to
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produce the answer is no because there
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is finite amount of that is an apartment
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easy to produce the answer would be
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somewhat yes because there can be
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another building that can be created it
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can be a 50-story building another
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building can be created on this same
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piece of land you yourself in created
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and then you can add 70 more units of
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Supply this apartment a harder asset or
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is an agricultural land a harder asset
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and agricultural land is a very hard
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asset can I provide it to you the answer
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is yes how because the value of an
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agricultural land you buy it today and
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you keep it for 50 years it will go up
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but if you buy a unit here and hold it
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for 50 years and as your flat gets older
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the value of that flat is likely to come
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down so this is the difference between
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hard and soft asset that and
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agricultural land is very difficult to
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create very difficult to destroy and it
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retains its value but on the flip side a
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flat it is easier to create it does not
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retain its value and it is easy to
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destroy also and what about commercial
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real estate now the commercial real
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estate if you have purchased it in a
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good location and if you outright own it
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then it becomes like an excellent
[699]
investment I will link my Hindi Channel
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video in the comment box you can go and
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check it out I have done more analysis
[705]
on the difference between a house
[706]
agricultural land and commercial
[708]
property so you can learn more about it
[710]
but to cut the long story short here if
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you're looking to invest in a hard asset
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called as real estate please consider
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buying a plot slash agricultural land or
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a commercial property over buying a flat
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why because these two assets plot
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agricultural land or commercial property
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are much much harder assets compared to
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something like a house so this is the
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first category of investment in which
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you should consider moving your
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investment in what are some of the
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prominent things or problems that you
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will witness here first and foremost
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owning any of these three things
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outright is going to be expensive
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because any type of real estate is
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expensive whether you are buying a plot
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commercial property outright house it is
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going to be expensive so what people say
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is that you know what I'm going to go
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and buy a REITs please don't do that
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here is a snippet which shows and I'm
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not naming the firm otherwise they will
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sue me so here are the commissions
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associated with REITs you are roughly
[760]
paying four percent commission on reads
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so yeah please be mindful before making
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investments in commission oriented
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properties so naturally your question
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would be the rakshat I don't have that
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amount of money I am looking to buy a
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hard asset but unfortunately I can't buy
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a real estate what is it that I should
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be doing then you can consider option
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two or option three option two is that
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buy one of the hardest assets or
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Commodities out there which is gold now
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there are two three things that you need
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to remember about gold purchases in fact
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there are a lot of things but I'll
[790]
outline some important points so first
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and foremost that out of all the
[793]
commodities for example copper silver
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diamond gold gold is one of the hardest
[798]
Commodities that are out there it is
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very difficult to increase the supply of
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very difficult to destroy gold and it
[804]
usually retains its value so this is the
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first key thing second key point that
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you need to remember is that the returns
[809]
of gold usually lies between five to
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twelve percent over a long period of
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cycle this is the problematic area
[816]
regarding goals because if you are
[818]
investing in gold for example many a
[820]
times we say that you know what I want
[822]
to invest in gold then gold is a very
[824]
bad instrument from an investment point
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of view why because the commodity return
[828]
cycle is huge it takes years and years
[830]
to recoup your investment and if you get
[832]
stuck in a bad cycle then you will not
[834]
be making any returns but if you are
[836]
using gold as a savings instrument so
[839]
savings instrument simply means that
[840]
that you purchased 100 worth of gold I'm
[843]
saying worth of gold then worst case
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scenario is that it will remain at
[847]
hundred dollars only so at least it is
[849]
not going down in value so it is much
[850]
better to hold gold compared to the cash
[852]
that you are holding but yes from an
[854]
investment point of view gold is a very
[856]
bad asset to hold and there are multiple
[858]
reasons for it first and foremost
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verifying the authenticity of gold is
[862]
very very difficult unless you actually
[864]
melt it there is no way to verify the
[866]
purity of gold that's one second if you
[869]
are investing in jewelry really bad
[871]
investment because again like reads you
[873]
are losing like four or five percent
[875]
commission in terms of making charges
[876]
selling charges what not so please don't
[879]
buy gold jewelry third and final problem
[881]
with gold is that it is very difficult
[882]
to store gold if you buy gold if you buy
[885]
like kacha gold what are you going to do
[887]
with it are you going to stick it in a
[888]
locker you might do it how many lockers
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are you going to purchase you have to
[892]
pay maintenance fees also and whatnot
[893]
right so it becomes really difficult to
[895]
store gold this brings us to the third
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asset and it's a controversial asset and
[899]
a lot of people will give a lot of
[901]
negative commentary around it I will
[902]
share my perspective I'm giving you
[904]
three options whichever option works
[906]
best for you please purchase it which
[908]
option am I investing in I am investing
[910]
in option one and option three option
[912]
three I'm going to speak about now the
[914]
third hardest asset is Bitcoin and let
[916]
me run it through the exact same
[918]
framework that I'm using for all the
[919]
assets so number one is the supply of
[922]
Bitcoin limited the answer is yes the
[924]
supply is 21 million Bitcoins and it is
[926]
one of the hardest assets out there
[928]
because the supply is mathematically
[930]
driven as per the smart contract and
[932]
that smart contract has not undergone a
[934]
fundamental shift in its 13 years of
[936]
existence so this is a fact I'm not
[939]
giving you any hypothetical things here
[941]
second thing can it be destroyed no
[943]
because it is one of the most
[944]
decentralized assets out there in case
[946]
you don't understand what
[947]
decentralization is please read it up
[949]
please watch some of my other videos but
[951]
no agency controls Bitcoin it is a smart
[954]
contract it is running like a computer
[956]
code and you can't do anything with it
[958]
then comes the third point that hey is
[960]
it value destruction because I've been
[961]
reading about the crypto Market that
[963]
Terra Luna fell by 99 and Bitcoin also
[966]
fell by 50 okay so let us look at
[968]
numbers then so in total in the last 13
[970]
years Bitcoin has given a return of 11
[973]
000 is it a small return the answer is
[975]
no this is what the math tells us have
[978]
there been phases when Bitcoin has
[979]
fallen by 50 80 the answer is yes has
[983]
gold also Fallen by 50 80 yes the gold
[986]
has also Fallen I've shown you last 200
[988]
year cycle on gold please do not confuse
[990]
volatility by preservation of wealth if
[993]
there is a general decline in something
[995]
it is very different from volatility so
[997]
when you are considering these asset
[998]
classes please consider slightly longer
[1000]
term View and this is what the Bitcoin
[1002]
data tells us again stating a fact here
[1004]
now comes the final Point introduction
[1006]
you know what Bitcoin does not have any
[1007]
usage you can't buy anything with it see
[1009]
guys I cannot explain you the usage of
[1011]
Bitcoin in case you have made up your
[1012]
mind that everything is evil think about
[1014]
it this way that I am a diverse
[1016]
certified investor I talk about all the
[1018]
asset classes including Bitcoin so this
[1020]
is 0.1 regarding the usage let me throw
[1022]
couple of puzzles at you and I'll be
[1024]
very happy to read your commentary in
[1026]
the comment section please respond to
[1028]
this simple question let's imagine that
[1030]
you have to move 10 million dollars from
[1032]
India to Nigeria try moving it through a
[1035]
bank you can't do it that's a simple
[1037]
point there are layers and layers of
[1039]
blockages that are built in fact try
[1042]
moving like 20 lakh rupees or 30 lakh
[1044]
rupees from India to the US interaction
[1046]
I don't need to move like 20 lakh rupees
[1048]
30 lakh rupees from India to the US or
[1050]
from us to some other country why do I
[1052]
bother because there are a lot of rich
[1054]
people who need to move that money in
[1056]
that bulk Bitcoin right now is one of
[1059]
the prominent solutions for that second
[1060]
thing that hey I can't buy anything with
[1062]
Bitcoin you can in fact there are kiosks
[1065]
in developed Nations like the us there
[1067]
are kiosks in Turkey where you can
[1069]
exchange any form of currency into
[1070]
Bitcoin similarly there are governments
[1073]
for example El Salvador and bunch of
[1075]
other different countries that are
[1077]
keeping Bitcoin in their treasury it's
[1078]
fine if you do not believe that
[1080]
narrative this is not a push from my
[1081]
side to make you invest in Bitcoin
[1083]
please invest it whenever you have
[1085]
fundamental faith on that asset all I'm
[1087]
trying to tell you is that if we have
[1089]
developed a framework and if you have
[1091]
run all three different asset classes
[1093]
that you have analyzed please pick
[1095]
whatever hard assets you consider to be
[1097]
hard you don't need to go and purchase
[1099]
Bitcoin if you have more faith on gold
[1100]
purchase gold if you have more faith on
[1102]
real estate purchase real estate please
[1104]
don't keep your money in Fiat because
[1106]
that is going down my favorite hard
[1108]
asset is Bitcoin I can be wrong I'm not
[1110]
saying that you should also believe in
[1112]
the same narrative read about it learn
[1114]
about it and depending on whichever hard
[1117]
assets you have faith on you can take
[1118]
some investment position I hope you
[1120]
enjoyed the economical historic analysis
[1122]
if you did do press the like button and
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I will see you tomorrow
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