Which One is The Best Investment, Deposit, Gold, or Real Sector

Well, I don’t plan to write in this blog exclusively about audio software and mp3. This world is so wide and it is boring if we stuck ourselves in particular theme. Today I plan to rewrite an article by Muhaimin Iqbal, founder of Gerai Dinar, it was written in Indonesian, and here I try to translate it to English (If you understand Indonesian, check his blog). Be patient, this will be, more or less, like an economic lecture in High School.

He stated that the best investment is in real sector, with properly managed efforts. Real money is real object whose value is determined by that object itself, not by law imposed to object. Sadly, throughout the world today, money is fiat money. The money’s value is almost zero but law impose a value to money. If that law suddenly changes or becomes outdated, the amount of money we have will become worthless.

If we have money, it better to invest it in real object whose value will not decreasing across time such us property, gold, precious metals, or even livestock like cattle. If we deposit money in bank, sure there is interest with numerous rates, the money will decrease in value because of inflation.

Here Muhaimin Iqbal gave us a simulation. In 2001, money 38.5 million in Indonesian Rupiah is equal to 100 gold dinars. Please remember, 1 gold dinar is 4.25 gram gold 22 carats.

• If we deposit that money in bank, with interest rate averagely 6% per year, today in 2008 that money is about IDR 58 million. We have extra money about IDR 20.5 million.

• Suppose we change that IDR 38.5 million into dinar, in 2001 we would have 100 gold dinars (in 2001 gold dinar is equal to IDR 385,000), and we keep this. In 2008 1 gold dinar is equal to approximately IDR 1,3000,000.00, so that 100 gold dinars today is equal to IDR 130 million, just by keep it. Far more than any deposit in various bank. This is in Indonesia, in other countries, please re-simulate it again.

• Last month, Iqbal visited his friends who run a mahogany plantation in Gunung Ringgit Jember East Java. Here he simulated that if that IDR 38.5 million was invented to plant mahoganies, today in 2008 we will have IDR 1.35 billion. So it is right, if you have skill, better to invest in real thing than save it in bank account.

Today we face 2008 economic crisis, and governments across the globe is still doing nothing. It is likely we should make efforts by ourselves. May be we can say that that things about investment above is easy in words. Yes, that is absolutely right, everything is easy in words, just when will you begin to make efforts? Off course there are many reasons to disagree with those, and conversely, thousand reasons is available if we make it.

-