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Next we have the story of a colleague who put his money where his mouth is. NPR business editor, Uri Berliner, helps us to understand business, so he decided to do some. The cash he was keeping in a savings account was not keeping up with inflation, so he bet on assets - ranging from stocks to a painting bought online. Here's his update.
URI BERLINER, BYLINE: I had up to $5,000 I was willing to invest. A chunk of it would be heading to the stock market. What mattered to me was diversification and keeping my fees and expenses as low as possible. So I reached out to Miranda Marquit, a personal-finance blogger. We went shopping together for low-cost ETF's - funds that match broad portions of the market.
MIRANDA MARQUIT: This has an expense ratio of .04 percent, so that's really - that's low.
BERLINER: I didn't want my basket to be filled entirely with U.S. stocks. It needed an international flavor.
MARQUIT: Yeah, that one would be a good one. So you can get most of the total world stocks.
BERLINER: How am I doing? Since I put together my little stock portfolio last spring, it's gone up 20 percent. What hasn't done so well is a fund I bought that invests in commercial real estate - it's up 4 percent. So that's the plain vanilla chapter of my investing story. Let's move on to a much more speculative bet - coffee futures. Last spring, coffee futures were in a rut at a three and a half year low. I went to Chicago to meet Jack Scoville. He is a futures broker and I asked him - what was keeping prices down?
JACK SCOVILLE: We've had a significant uptick in production. When you look at Columbia, their production's increased. And Brazil has just had a whopper year.
BERLINER: But a year later, the situation has changed. The excess supply of coffee beans - it's gone, and my coffee futures fund is up 21 percent. So I check in with Jack Scoville again and ask him, what's been happening over the past year?
SCOVILLE: What's really sent prices higher is a draught in Brazil, which is threatening to really curtail the production there.
BERLINER: My next investment is a lot more tangible than the future price of coffee. It filled up an entire shopping cart at Costco.
BERLINER: All right, toothpaste, pecans, big bag of onions - we're getting my items run up here. My strategy - bulk buying. Buying in bulk is cheaper than purchasing items one at a time. And if prices are rising, those bulk purchases can be a good hedge against inflation. Last year, I asked economist Russ Roberts to come along while I shopped at a Costco in Washington DC.
RUSS ROBERTS: So it's certainly true that cash, if you can spare it, to convert your cash into real goods, whose price is rising, that's not a bad idea.
BERLINER: A little more than a year later, I put the idea to the test. Here I am at Costco. This is round two, the update. Again, my bet only pays off if the prices on last year's bulk purchases are now higher. OK, last year I bought 3 pounds of pistachios for 14.89, his year they're 18.99 - a lot more expensive. Pistachio inflation - I never would have guessed that. How about a four-pack of toothpaste? So last year this toothpaste went for 12.99. This year, 8.99 with a rebate. So it's a lot cheaper. And so it goes. Trash bags are up in price but tuna fish is cheaper.
All told prices from last year's haul have climbed only around 1 percent, making my hedge against inflation a bit of a bust. For my last investment, I took to the Internet - all the way to Vilnius, Lithuania. An artist named Vladimir Kryloff had put his work on Saatchi online, an art marketplace. I liked his colorful painting called Flower Study 14. So I bought it over the website for $450, plus $139 for shipping. That painting has been on my bedroom wall ever since, until I wrap it in a beach towel and bring it to be appraised.
JEAN PIERRE DAN DINO: I checked the back that I noticed it was signed and dated.
BERLINER: That's Jean Pierre Dan Dino, an art appraiser in Washington. He measures and photographs the painting, and then scans it with an ultraviolet light.
DAN DINO: It will show if there are any repairs or any damages or any condition problems.
BERLINER: Then Dan Dino does some research on the artist and comparable works in the same style, the verdict - $900. That's the market value, what Dan Dino calls a fair asking price. So theoretically I could make more than $300 by selling. But I'd need to find a buyer. And that could take a lot of time. Dan Dino senses my uncertainty.
DAN DINO: You could ask for 900 and give them - if they pay all cash upfront - a 10 percent discount.
DAN DINO: Maybe you could donate it to a not-for-profit institution and get a tax write-off, which you could get for $900 right now. All good suggestions. But in the end, I decided the painting isn't a financial investment, it's an emotional one. I enjoy it. So I'm keeping Flower Study 14 at home, hanging on the wall. Uri Berliner, NPR News.