If you want to know what someone’s views of society are, ask what they believe is the best long-term investment.

I am fascinated each year when Gallup Poll asks Americans to choose the best option among real estate, stocks and mutual funds, gold, savings accounts and CDs, or bonds. The results are a pop psychologist’s dream of cognitive issues, belief systems and ideologies.

See the following chart:

Source: Gallup

Now, before we get into the details, some caveats: First, people often don’t really know what they want or think. Instead, when questioning people about their hopes and desires, we end up with a distorted mass-media version of a bad Robin Leach television series. Sad but true, often we don’t know what we want out of life.

Second, survey responses are not all they appear to be. There is value in the collective data, but we need to dive into the details to tease out some fascinating cultural differences.

Consider what happens when we divide the survey responses along income lines. We discover some very telling things about the American psyche.   Continues here

 

 

Category: Gold & Precious Metals, Investing, Psychology, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “The Rich Buy Real Estate; The Poor Want Gold”

  1. VennData says:

    So where do the poor learn about gold? Glenn Beck’s TV ads.

  2. rd says:

    I noticed they didn’t ask about guns in their poll.

    The American dream in the late 1800s was some land, gold, a Colt revolver and a Remington rifle to become rich out West. Despite the West and most other places being suburbanized now, the same dream seems to be continually hitting the airwaves.

  3. b_thunder says:

    “The wealthy like real estate and equities; the poor prefer gold. ”

    Barry provides several good reasons why it is so. IMHO, he still missed a very important (and perhaps The Most Important) reason why “poor” prefer gold: INFLATION. Not the BLS definition of inflation with substitution and hedonistic “adjustments” and renter’s equivalent rent, but the kind of inflation they see daily at the supermarket, gas station, increased medical copays and deductibles, higher rents and utility bills. The BLS formula may be capturing the inflation for the whole economy, but it’s the low income segment that feels IN_flation while wealthier consumers of luxury/discretionary items may feel DE_flation.

    The other 2 reasons why wealthier respondents prefer RE is: #1 – because they predominantly live in the locales where RE has been appreciating in price. Had they lived in Detroit or Cleveland their opinion might have been different. #2 – they’ve been conditioned by recent events that the Gov’t and Central Banks will do, using Mario Draghi’s quote, whatever it takes to prop up the stocks and RE prices. So the wealthy individuals have all the greed and none of the fear and insecurities that the low-income people (naturally) feel.
    Of course it can all change during the next crisis, i.e. what if Fed comes up with another QE and stocks don’t respond (see Japanese stock market)

    P.S. it’s really a “punch below the belt” against the low income population to say that “Gold… it often can be traded extra-legally.” Firstly, the low income people live paycheck-to-paycheck and can hardly afford any gold. They ASPIRE to buy more, but they can’t afford to. I know, I was low-income once. Second, there’s A LOT more “fishy” money in RE than in gold market. Who do you think buys up (and drives up prices for) high end RE in Manhattan, Miami Beach, Beverly Hills and London? Honest russian oligarchs, honest chines communist party bosses, and honest south american laborers with a few oil sheiks in the mix?
    Aren’t they one of the major drivers of high-end RE?
    There’s a reason why the Nat. Assoc. of Realtors lobbied and received an exemption from money laundering laws.

  4. george lomost says:

    Was the headline written by the same person as the text? “The rich buy real estate (and private jets, and yachts and expensive art and gold and politicians? – what do the rich “want”?). The poor want gold (but what do they buy?).

  5. rj chicago says:

    Um..Seems none of the years add up to 100% – I wonder where the remainder of the ‘invisible’ percentages sequester their funds? Just askin.

  6. BennyProfane says:

    “Gold is more or less portable; it often can be traded extra-legally. It is a disaster currency that will have value even in a Mad Max era when society breaks down. Gold reflects a hedge against the potential collapse of the existing order; it is a pessimistic investment.”

    Which is really dumb, because gold will have no value when everything starts hitting the fan. Water, food, fuel (re: Mad max), but gold? It will just weigh you down.

  7. LeftCoastIndependent says:

    The one cash flow investment that has not gone down, in the last 59 years anyway, is residential rent. I’m sticking with residential rental real estate. And what’s more, I don’t know how to do anything else and I’ll be damned if I’m going to get a real job with the lousy wages that are being paid these days.