As investments go, this one's not so much a 401(k), as a 401(cow).
One Middle Tennessee family may be sending their boys to college with the help of a pair of breeding cows. Every year, the cows have a calf, which the family sells. They sock the proceeds away in a college fund for 11-year-old Ethan Lee and his 6-year-old brother, Eli.
"We talked to a financial adviser, and we're kind of glad we did this instead of putting the money in the markets," said their mother, Jennifer Lee of Greenbrier. "College is not getting any cheaper."
With the stock market in convulsions, the real estate market in a slump and even the most reliable traditional investments suddenly in doubt, a growing number of Middle Tennessee residents are looking for new ways to invest, or at least protect, their money.
Even the experts are feeling their way across an investment landscape that suddenly looks as alien and hostile as the surface of Mars.
"The situation is rife with risk. It's scary. You don't know who to trust," said Bill Garrett, a certified financial planner who pulled most of his clients' money out of the stock market a year ago. "How can a company be AAA-rated on Monday and bankrupt on Friday?"
Now, he is picking his way through the markets, sifting through fire-sale priced stocks, looking for the rare few that still offer high yields, exploring municipal bonds — a calculated risk, considering the financial straits many municipalities are facing.
For the most part, he is keeping his clients' money in cash, money markets and bargain hunting. One day, it's a little Oklahoma savings and loan that never got into the subprime gambling game and is still churning out a steady 4 percent return for its investors. The next, it's a AAA-rated municipal bond project, insured by Warren Buffett's firm, which is probably as close to a safe bet as anyone's going to get in the markets these days.
Tangibles draw buyers"It's a minefield right now," Garrett said. "You just have to be very discerning, very patient. … You have to keep nosing around and finding stuff. Remember, more millionaires were created during the Great Depression than at any other time in our history."
Other Tennesseans are turning their backs on the market altogether and looking to invest in something more tangible. Gold. Collectables. Art.
On Thursday, Nashville art dealer Anne Brown sold four Ansel Adams pieces in rapid succession. Even in this economy, art collectors know a solid investment when they see one.
"If you know the market, you can make money" investing in art, said Brown, owner of the Arts Company in downtown Nashville, which is featuring Adams' works through Dec. 19. "My belief is, buy it if you love it, but if you love it and want to make an investment out of it, you really have to know what you're doing."
Investing in art, Brown said, takes a combination of luck and skill, and she usually urges would-be collectors to look first for pieces that appeal to them, rather than just for pieces that may increase in value. Shopping for art with the sole aim of hoping to turn a profit, she says, is as risky as buying a car and asking the dealer how much it's going to be worth as a collectible in a few decades.
"But if you're lucky and savvy both, you can invest and do well in that," she said.
Investors like goldThe customers at Nashville Coin & Currency aren't looking for a personal statement. They're looking for gold — gold coins, bars and ingots that they can carry home and lock away for safekeeping. Company President Mike Mouret estimates the number of people coming in and looking to invest in precious metals has tripled or quadrupled in the past year.
"In this financial crisis, people are scared of having anything of value in the banks," said Mouret, who has seen customers place orders of $10,000 and higher, hoping that the value of the gold will rise, or at least hold steady, as the value of the dollar drops.
If nothing else, having gold on hand will give them a tangible asset if worse comes to worst. Mouret also has seen a jump in the number of people coming in trying to sell back gold, everything from gold coins to wedding rings, "just to pay the electric bill."
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