Are Your Investments Loaner-ship or Ownership?

by Patrick Carroll

Do you base all or most of your financial decisions on a need to play it safe? If so, could fear be driving your decisions, or even a false sense of security?

“Bruce” was a high-net-worth individual whose portfolio included: stocks, real estate, and gold. Note that there are no bonds or certificates of deposit in that asset list because he understood that having “OWNER-ship Investments” is far better than having “LOANER-ship Investments.”

Ownership investments are assets such as stock, real estate, and precious metals. Yes, there is some risk involved: a company you own stock in may flop, the price of gold may fall, or the real estate market could collapse.


Compare those investments to loaner-ship assets such as savings accounts, government bonds, or certificates of deposit. With these, you give an organization your money with the expectation of getting it back. That organization puts your money into ownership assets that make a greater return for them and share only part of it with you.

If you avoid ownership assets, is it because you fear the risk involved? Or, are you ignoring the effect of inflation?

There is a trade-off: In return for the sense of security that comes with loaner-ship assets, you sacrifice the ability to keep up with inflation.

Take a look at your portfolio. If you find that it is heavily weighted toward loaner-ship assets, consider the benefits of incorporating higher-yield investments in a balanced financial plan.

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