Alex’s Financial Advice 2009: 6% Growth and no risk, guaranteed…

With investors losing retirement funds and housing values, it’s hard to find a good place to put your money these days (I’m speaking theoretically here – luckily, I have no money). To help out my parents and friends who are concerned about this, I think I’ve found the best investment target of 2009. Since the market hasn’t hit rock bottom yet, there really aren’t any safe bets in stocks. Bonds are yielding pretty low returns, and even they aren’t safe – who knows where the next defaults will be? If you want safety, you could buy treasury-bills, but currently, these are only yielding about 1% per year – hardly a worthwhile investment.

So using my advanced analytical skills and financial expertise, I’ve scoured the market and figured out where we should all be putting our money. It’s risk free, has never lost value, and grows at 6% per year. You ready for this? Invest in TTC tokens.

Think I’m crazy? Here’s the logic:

TTC Tokens: In 1995, you could have bought a batch of tokens for $1.30/token. Again, think of this in investment terms. If you were promised, in 1995, annual growth of 6% per year, you’d be expecting a value of $2.77/token by 2008. And the 2008 (and 2009) price of TTC tokens? $2.75.

Let’s compare this to, say, Royal Bank stock. RBC stock was valued at $20.75 per share in 1995, and is at $28.76 today. At 6% annual growth from 1995, this would have been over $44 today. Now, RBC stock did hit $54 at its peak in mid-2007, but it’s since lost almost half of that value – pretty brutal for something that should have been a safe investment.

Back to TTC tokens. Simply put, these are as safe as you get – they just don’t lose value. A 6% average annual return, with virtually no risk? Phenomenal. What really kicks ass is that you can always expect these prices to go up, since they rise with operating costs. Want the proof? Check out an article from the Toronto Star this week: Expect future TTC fare hikes: Increases inevitable, councillors say, as costs to system grow.

I wish I was really clever for having figured this out, but check out these two posts from Toronto Star readers:

“Just before the old aluminum ones went obsolete, I went to 1900 Yonge St. and traded them all in for the new two-tone ones we use now. While I was waiting for my replacement tokens, TTC staff told me there were others who exchanged THOUSANDS of the tokens at a time.”

“Let the TTC raise raise fares as much as they want. During the summer of 1995, I bought 20 rolls of tokens (50 in each) for $65 each, and I’ve still got at least *half* of them.”

So how do you go about making this investment?

1) Buy $10 000 worth of TTC tokens. Ideally, buy them all from the same station, so as to create a bitch of a shortage. The more you fuck things up, the more their operating costs rise (which makes them boost fare prices).
2) Find other ways to boost operating costs. Campaigning for a subway extension is one possibility. Heck, if we get enough people to do this, we could all join together and hire a professional lobbyist to fight for increasing TTC fares. Politics is beautiful.
3) Wait a few years until the market hits recovery mode, and start unloading your tokens at a tidy profit. Just check out this craigslist post, or this one. Or, if you value video games more than cash, you could talk to this guy, who’s willing to trade a supernintendo for 20 tokens, a PS1 for 10 tokens, or a broken PS2 for 10 tokens.

Remember folks, investments come in all shapes and sizes. During a recession, you have to be creative if you want your money to grow. Tune in next week for part 2 of my forthcoming series Growth in Recessionary Times: Wonky Investments that Crazy People in Downtown Toronto Tell Me About.