Diamonds, Krugerrands, and scorched greenbacks...

Unsafe Safes

by Bill and Brenda Evans

Samuel thrust his hands into a dented Chase and Sanborn coffee can and fished out two handfuls of rusty nails, then a plastic lid he had trimmed to fit beneath the nails. When he tilted the can, I saw the Krugerrands—dozens and dozens of $50 gold pieces with a soft luster.

 “Wow,” I said. “I’ve never seen Krugerrands before.”

He grinned: “These are what I wanted to show you.”

Samuel was a There’s-No-Place-like-Texas 72-year-old sporting low-heeled boots, jeans, and a plain western shirt. His sandy hair was clipped short and brushed to the side. He was put together like a Friday Night Special. The glint in his eyes was warm, sincere.

Then there were the Krugerrands. Outside, his detached one-car garage was clapboard; inside, open studs. It contained a shelf of miscellaneous tools and a short workbench. Between the studs a dozen 3-lb. coffee cans filled with rusty nails, nuts, bolts, and screws sat along a concrete footer. Under the rusty nails, each can contained stashes of gold Krugerrands.

I didn’t fail to grasp the irony of it. Samuel’s “Texas spread,” a modest white clapboard house and detached garage, stood between Corpus Christi—Latin for Body of Christ—and the 825,000-acre King Ranch, which is larger than the state of Rhode Island and the symbol of one man’s enormous hold on wealth. Like many, Samuel was trying to balance his life between the two—Christ and gold.

 

A Safe Investment

Samuel was clear about the Krugerrands. He had purchased them long ago, paying just over their $50 face value. Along the way, he sold them as needed at their gold value. While he was certainly not the millionaire next door, he was certainly a well-fixed bachelor living modestly and giving generously. In fact, his clapboard house and garage had already been placed into a Life Estate agreement with the Christian charity for which I worked. He would maintain the property and live there until death, at which time the property would be sold to fund missionary evangelism around the world.

But Samuel was worried—and rightly so. “I’ve been thinking…someone might come in here after I die and haul these old coffee cans to the dump. I just want you to know what’s under these nails and put it in the record, because that’s for missionary work.”

I asked why he bought the Krugerrands in the first place. “Part for retirement and part for the Lord. A lot will be left, I’m sure, for Him. I don’t need much. Krugerrands are better than gold bullion, you know, because bullion has to be assayed each time it’s traded. I can take these to a collector or precious metal trader. The market price is good right now.”

I understood his reasoning. Some investors were high on gold and silver—precious metals—both for their escalating value and for inflationary hedge. Samuel was one of those. His Krugerrands were both valuable and beautiful.

Larger and thicker than a US half dollar, each coin is minted with 22-karat gold alloy and contains one troy ounce of gold. On one side of each coin was a leaping eland; on the other, the profile of former apartheid South African president Stephanus Johannes Paulus Kruger. First minted in 1967, the coins exploded in popularity, reaching their investment peak in the early 1980’s, when the coin held an 89% share of the entire gold coin industry. By the end of that decade, however, some of the luster, both literally and monetarily, had worn off.

 

Irrational Response

I was amazed on two counts. First, I held Krugerrands in my hand, something I’d long wanted to do. Second, Samuel’s “safe” for protecting his gold was far from safe. Samuel seemed like such a wise, common sense kind of guy, but storing his Krugerrands in coffee cans under rusty nails was neither common sense nor wisdom. Truth is, Samuel’s unsafe safe wasn’t the first I’d seen. I’d been shown these kinds of “safes” in homes, garages, basements, and yards of otherwise smart people all over the place.

Two sisters in the upper Midwest hid lots of money in their antique spool chest under stacks of store coupons. One former military man put 1,700 silver medallions in PVC pipes and buried them in his greenhouse and flowerbeds. A Long Beach woman stowed three enormous diamond rings in the pocket of a housedress hung in her crowded closet. She was certain her diamond cache was safe and secure. I wasn’t.

A widow in St. Louis put $20 bills in her stash of Reader’s Digest Condensed Books. A businessman hid enormous wads of unreported cash in a large safe deposit box at his bank in hopes that Uncle Sam would never know. My aunt stuffed a fist of $100 bills into the opaque globe of a lamp she rarely used. They were safe until she forgot about her greenbacks, turned on the lamp, and scorched them to flaky ashes.

Why do otherwise smart people resort to unsafe safes? I’ve heard it all over the years: liquidity, convenience, control, and independence. Then there’s the matter of distrust, including banks and Uncle Sam. Speaking of the government, I’ve met both laymen and preachers who create “safes” to avoid taxes. Income, whether received over the table or under, should be accounted for ethically to both God and Uncle Sam. Jesus said so in no uncertain terms.

Most often, unsafe safes are about power to do what I want, when I want, and with what is mine. Or at least that’s how we rationalize it. This-Is-Mine trumps all other motives, but it doesn’t trump Jesus’ parables, nor the Old and New Testament teachings on stewardship.

 

Find a Better Option

Why avoid unsafe safes? First, improperly protected assets are highly vulnerable to fire, thief, or loss…and remember, possession is nine-tenths of the law. Second, in his talent of parables, Jesus condemned the one who “buries” rather than “grows” the assets in his hand. When not invested to grow, money loses value and is needlessly eroded by inflation and time.


Third, hiding large caches of money or valuables is irresponsible stewardship, although a small cash stash may be legitimate. Debit cards and ATMs offer speed and convenience as well as safety. Fourth, distrust of banks or Uncle Sam is mostly misplaced. Certainly, stay alert, check bank statements (bank employees are human), watch your assets as godly stewards must, get good tax advice and be cautious, but avoid paranoia and irrationality. Reasonable trust is not gullibility.

Fifth, look beyond your local bank or investment firm for safe places for your assets. The Free Will Baptist Foundation offers several safe options including revocable trusts with interest rates higher than Money Market Accounts and most CDs, and a list of deferred giving arrangements similar to Samuel’s Life Estate.

So don’t resort to unsafe safes. There are better ways to protect and grow your assets.

 
About the Writers: Bill Evans, former director of the Free Will Baptist Foundation, lives in Cattletsburg, Kentucky, with his wife Brenda, a retired English teacher. Visit www.fwbgifts.org for more information on planned giving.