Happy Tax Day, everybody! Whether you’re frantically finishing up some complicated math before you file at the last minute, or relaxing while you wait for that refund check to roll in, April 15th is a day when money is on our mind. How much have we made? How much have we saved? What have we done with what we have, and how can we get more?
I especially love checking on my interest and investments at this point in the year and watching those baby percentage points grow up. However, there’s one important investment that doesn’t show up on my 1040. That’s my food storage.
Never thought about food storage as an investment? Let me offer two points that may change your mind. And who knows? It might even inspire you to invest that tax return.
Security. For many of us, the purpose of a financial investment is some sort of protection against an unpredictable or unexpectedly lean future. We invest in insurance in case something happens to our home or our car, or in our retirement knowing we won’t have a regular paycheck after a certain point. Food storage works along the same lines. Any number of unforeseen events could interrupt our ability to purchase food for a time, and comestibles previously purchased and stored for future use protects and preserves normalcy during those interruptions.
And if you’re waiting for something big, like an earthquake or tornado, to knock out power lines and close grocery stores, think again. A few years ago, CNN reported that somewhere close to 50 million Americans experienced “low food security” in 2011 as a result of layoffs, unemployment, and underemployment.
- Appreciation. The hope with any investment is that your return will be greater than your initial buy. So, how does that work with food storage? It’s not like you buy three bags of rice and in five years you magically have four bags. And besides, food—unlike gold or real estate—eventually goes bad. Isn’t that depreciation?
Nope! Here’s how Stanford economist Russ Roberts explained it to an NPR reporter:
"Inflation is low these days, running at a 1.7 percent annual rate. Still, it outpaces the return on a savings account. Roberts says if inflation starts rising, to say, 5 percent, the argument for bulk buying becomes more powerful. 'Do you have an investment now that pays 5 percent? The answer is: not easily,' he says.
"He explains that a mutual fund might achieve a 5 percent return — but that's only if the stock market is doing well. Savings accounts and money market funds don't pay anything close to that. 'So it's certainly true that cash, if you can spare it to convert your cash into real goods whose price is rising, [buying in bulk] is not a bad idea,' Roberts says."
In other words, because of inevitable inflation, you will get more food for the same amount today than you will in the future. Buy those three bags of rice now for $15, because that same $15 will only buy one or two bags down the road. Make sense?
Not only does food go up in value, but assuming you store it properly and rotate it regularly, it’s also a low- to no-risk prospect; the only way you’re going to lose that investment is if your teenagers raid it frequently.
So, in the spirit of smart investments, check out our monthly sales and food storage specials. And tell us what you’re doing with your tax return this year!