Shipping Containers Top List of Income-Generating Investments

A growing number of investors are seeking investments that will put their money to work and generate a stream of residual income. Most are looking for an investment opportunity that can supplement a fixed-income, like a disability or retirement. Regardless of the motivation, the demand for income-producing investments is rising.

At the top of the list of income-generating investments is shipping container investing. This is an investment in a hard, tangible asset that is used globally to facilitate trade. Different types of shipping containers can be found working on trains, trucks, and ships, all around the world.

With the help of a container investment and leasing company, investors can own a fleet of hard-working cargo containers and earn a monthly income for themselves. The shipping containers purchased by investors are deployed by the leasing company on busy trade routes between the continents and shipping ports of the world. Employed by shipping industry leaders to meet the import and export demands of countries around the globe, these cargo containers spend years crossing the world’s oceans and seas.

The expected lifespan of a new shipping container is more than a decade. So, an investment in shipping containers could deliver monthly returns for 10+ years! This time period, and associated risk, is comparable to an investment in a Treasury bond. The thing that differs most between the two is the rate of return. Shipping container investments generally pay between 10 percent and 15 percent for the duration of the agreement, whereas a bond will yield approximately two percent over the same time frame. Moreover, investing in shipping containers provides a monthly return in the form of lease income; bonds do not.

Despite increasing talk of protectionism in the United States, other economic giants – like China and India, the U.K, Canada, and the European Union – are moving ahead with free trade deals that remove many of the tariffs and taxes that impede economic growth. Over the next half-a-century this will create a rising demand for shipping containers to transport cargo to emerging markets and developed countries alike. Count on this to produce a dependable, long-term income for container investors.

My Investment in Shipping Containers With Davenport Laroche

With the stock market rising to record highs, my fears of a bubble-burst were growing. So, I sold a majority of my stock holdings and invested my profits (not principle) in an alternative investment; shipping containers. Yes, the giant steel boxes you see on ships, trains, and trucks.

My decision to seek an alternative to traditional-type investments came after I considered options like bonds, gold, and real estate. In most instances, those would be my go-to three. Not this time. With interest rates set to rise, the bond market seemed like a risky investment. Gold has been a poor performer and a disappointment for years. And, the real estate market is challenging and subject to political influence; take Brexit for instance. Because of these reasons, none of the usual investments interested me.

Shipping containers, on the other hand, are the workhorse of the global economy. I recently discovered that more than 90% of the world’s trade is moved by the container shipping industry. If countries around the world want to increase their GDP, they’ll need a lot of cargo containers to do it! Consider for a moment the economic potential of China and India alone.

To purchase and lease my three shipping containers I enlisted the help of Davenport Laroche. They are a container leasing company based out of Hong Kong, one of the world’s largest shipping centers. In fact, in 2016 there were nearly 20 million containers moved through the port of Hong Kong. This performance has placed it number five on the list of Top 50 Container Ports in the world.

The kind representative from Davenport Laroche helped me better understand the outlook for the container industry and explained the rising demand for shipping containers, particularly in Asia. She explained to me that with China’s introduction of their One Belt, One Road initiative, container traffic in Asia and Europe is expected to rise significantly, over the next decade. The containers purchased from Davenport Laroche will be participating in, and profiting from, this strong Eurasian growth. Factor in the 12% annual return on investment and a container lifetime of more than 10 years and you have a residual income for more than a decade.

Certainly there are other container leasing companies that offer opportunities similar to Davenport Laroche. However, some investors had a good experience investing with another company, while others questioned whether the whole thing was a scam or not. I decided against the other companies and instead choose Davenport Laroche because of their pristine record and transparency.

Hard Assets Make Gains in The Face of Economic Uncertainty

There is an old saying, “You have to see it to believe it.” This is the strongest argument for an investment in hard assets. The appeal for many investors is that hard assets can be seen and touched, making them tangible and somehow safer to invest in.

The four hard asset investments below have demonstrated the ability to preserve investors’ capital. As well they have shown that they can make gains in the face of economic uncertainty and the rising costs of living.

Precious Metals

Gold has seen has seen a meteoric rise in value. Prices of this hard asset have appreciated over 500% since the year 2000 alone. Buying gold bars, coins, and jewelry ensures that the value of the assets in your hand will move in partnership with spot gold pricing.

The appeal of investing in silver and platinum is two-fold. On one hand, the precious metals are considered to be a worthy hedge against inflation. On the other hand, widespread industrial use is what separates platinum and silver from gold, and really adds to its value.

Farmland

An expanding agribusinesses has caused the price of farmland to greatly appreciated in recent years. Historical data shows us that this hard asset – between 1987 and 2004 – averaged annual increases of 4.8%. Farmland prices averaged annual gains of 15% between 2004 and 2008, demonstrating to investors that this hard asset can deliver returns uncorrelated to broad equity markets.

Shipping Containers

Much like other hard assets, shipping container investments have the potential to generate impressive, uncorrelated returns. This is especially true when stock markets are performing poorly. Directly tied to the global economy, shipping containers are used to transport approximately 95% of the world’s cargo. This consistent demand over the last half century has treated investors to returns as high as 35%, even during the financial crisis in 2008-2009.

Collectibles

Most collectibles, like classic cars and fine wine, are luxury goods that can also be used for personal enjoyment. These hard assets are a viable alternative investment for one simple reason; they can preserve an investor’s capital because they posses intrinsic value given their limited supply.

The Challenge To Owning Hard Assets

The challenge with owning hard assets is that they often require proper storage. Like investing in fine wine for example, careful maintenance is needed to retain and increase the investment’s value. Gold bars must be securely stored, farmland must be mowed, and classic cars and shipping containers must be maintained. If this is something you cannot do yourself, it may become an additional, unexpected expense.