Safe as Houses: Majorities of Americans See Home Ownership, Gold and Jewelry as Safe Investments

    NEW YORK , N.Y. – September 4, 2014 – Despite periods of volatility in the real estate market over the past few years, over seven in ten Americans (72%) see owning a home as a safe investment. Majorities agree on this point across generations, albeit with considerable shifts from one generation to the next: nine in ten Matures (89%) see home ownership as a safe investment, compared to just over three-fourths of Baby Boomers (77%) and seven in ten Gen Xers (70%). Even among Millennials – for whom the subprime mortgage crisis of 2007-2008 and the ensuing financial crisis it helped kick off is likely a more formative experience – the majority still see home ownership as a safe investment (63%), albeit with a slimmer majority vote than any of their elder counterparts.

    Majorities of Americans also see gold (65%) and jewelry (59%) as safe investments.

    These are some of the results of The Harris Poll¨ of 2,306 adults surveyed online between July 16 and 21, 2014.

    Risky Business

    Turning to the other end of the scale, eight in ten Americans see owning one’s own business as a risky investment (80%), while two-thirds say the same of stocks/bonds (68%) and luxury or classic cars (67%).

    • Perceived investment risk varies, as one might expect, according to what one has on hand to invest. As such, it should come as little surprise that those with higher investable assets are less likely to see owning a business and investing in stocks/bonds as risky investments than those with less available to invest.
      • Owning your own business – 67% among those with $500,000 or more in investable assets vs. 81% of those with $10,000-$49,999 and 85% for those with under $10,000 to invest.
      • Stocks/bonds – 52% of those with $500,000 or more in investable assets see this as a risky investment, vs. 70% of those with $10,000-$99,999 available to invest and 73% for those with under $10,000 on hand for investments.

    Slimmer majorities see wine (60%), investment property ownership (56%) and art (55%) as risky investments, though it’s worth noting that strong minorities do rate each of these as safe (45% art, 44% investment property, 40% wine.

    • The perception of wine as a safe investment varies considerably by generation, with half of Millennials (49%) and four in ten Gen Xers (41%) rating it safe, compared to fewer than a third of Baby Boomers (32%) and Matures (31%).

    Money makers

    When asked which of these types of possible investments have strong earning potential, stocks/bonds (45%), owning an investment property (43%), and gold (42%) are the top selections, with over four in ten seeing each as potentially to be strong money-makers. Roughly a third each see owning a home (36%) and owning a business (32%) as having strong earning potential.

    Fewer see investments in art (16%), jewelry (14%), luxury/classic cars (11%) or wine (7%) as having strong earning potential.

    • Generational divides show up again on this measure, with Millennials more likely than any other generation to see strong earning potential for owning one’s own business (39%, vs. 28% Gen Xers, 29% Baby Boomers and 29% Matures) and investing in wine (11% vs. 6%, 5% and 3%, respectively).
    • What one can afford to invest also repeats as a factor in responses.
      • Those with higher investable asset levels are more likely to see strong earning potential in stocks/bonds (71% $500k+ vs. 54% $100k-$499.9k, 44% $50k-$99.9k, 36% $10k-$49.9k, 39% <$10k) and owning an investment property (54% and 52% vs. 37%, 37% and 42%, respectively).
      • Meanwhile, those with less on hand to invest are more likely to see strong earning potential in gold (46% <$10k, 47% $10k-$49.9k, 45% $50k-$99.9k vs. 30% $500k+) and jewelry (19% <$10k, 18% $10k-$49.9k vs. 10% $100k-$499.9k, 9% $500k+) investments.

     

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    TABLE 1a

    PERCEIVED SAFETY/RISK OF INVESTMENTS

    How risky or safe do you believe each of the following investments is, with a risky investment being one where you stand to lose money and a safe investment being one where, regardless of potential profit, you don’t stand to lose money?

    Base: All adults

    SAFE (NET)

    Very safe

    Somewhat
    , safe

    RISKY (NET)

    Somewhat risky

    Very risky

    %

    %

    %

    %

    %

    %

    Owning a home

    72

    24

    48

    28

    22

    6

    Gold

    65

    24

    42

    35

    26

    9

    Jewelry

    59

    13

    46

    41

    30

    11

    Art

    45

    9

    36

    55

    39

    16

    Owning an investment property

    44

    7

    37

    56

    42

    14

    Wine

    40

    10

    30

    60

    36

    25

    Luxury/Classic cars

    33

    7

    27

    67

    41

    26

    Stocks/Bonds

    32

    5

    27

    68

    45

    22

    Owning your own business

    20

    4

    16

    80

    47

    32

    Note: Percentages may not add up exactly to 100% due to rounding

     

    TABLE 1b

    INVESTMENTS PERCEIVED AS SAFE (NET)

    By Generation, Investable Assets & Self-Assessed Financial Literacy

    How risky or safe do you believe each of the following investments is, with a risky investment being one where you stand to lose money and a safe investment being one where, regardless of potential profit, you don’t stand to lose money?

    Base: All adults

    Total

    Generation

    Investable Assets

    Financially Literate (self-assessed)

    Millennials (18-37)

    Gen Xers (38-49)

    Baby Boomers (50-68)

    Matures (69+)

    <$10k

    $10k-<$50k

    $50k-<$100k

    $100k-<$500k

    $500k+

    Not very/ Not at all

    Very/ Somewhat

    %

    %

    %

    %

    %

    %

    %

    %

    %

    %

    %

    %

    Owning a home

    72

    63

    70

    77

    89

    68

    71

    69

    79

    80

    62

    77

    Gold

    65

    62

    63

    69

    68

    70

    66

    63

    71

    55

    65

    66

    Jewelry

    59

    60

    61

    55

    65

    60

    62

    57

    61

    56

    60

    59

    Art

    45

    44

    47

    45

    46

    45

    46

    43

    49

    41

    47

    44

    Owning an investment property

    44

    39

    47

    48

    43

    41

    41

    47

    58

    52

    36

    48

    Wine

    40

    49

    41

    32

    31

    40

    45

    40

    35

    31

    42

    39

    Luxury/Classic cars

    33

    37

    35

    31

    26

    35

    30

    35

    38

    28

    32

    34

    Stocks/Bonds

    32

    31

    31

    33

    37

    27

    30

    30

    41

    48

    25

    36

    Owning your own business

    20

    22

    19

    19

    21

    15

    19

    22

    20

    33

    15

    23


    TABLE 1c

    INVESTMENTS PERCEIVED AS RISKY (NET)

    By Generation, Investable Assets & Self-Assessed Financial Literacy

    How risky or safe do you believe each of the following investments is, with a risky investment being one where you stand to lose money and a safe investment being one where, regardless of potential profit, you don’t stand to lose money?

    Base: All adults

    Total

    Generation

    Investable Assets

    Financially Literate

    Millennials (18-37)

    Gen Xers (38-49)

    Baby Boomers (50-68)

    Matures (69+)

    <$10k

    $10k-<$50k

    $50k-<$100k

    $100k-<$500k

    $500k+

    Not very/ Not at all

    Very/ Somewhat

    %

    %

    %

    %

    %

    %

    %

    %

    %

    %

    %

    %

    Owning your own business

    80

    78

    81

    81

    79

    85

    81

    78

    80

    67

    85

    77

    Stocks/Bonds

    68

    69

    69

    67

    63

    73

    70

    70

    59

    52

    75

    64

    Luxury/Classic cars

    67

    63

    65

    69

    74

    65

    70

    65

    62

    72

    68

    66

    Wine

    60

    51

    59

    68

    69

    60

    55

    60

    65

    69

    58

    61

    Owning an investment property

    56

    61

    53

    52

    57

    59

    59

    53

    42

    48

    64

    52

    Art

    55

    56

    53

    55

    54

    55

    54

    57

    51

    59

    53

    56

    Jewelry

    41

    40

    39

    45

    35

    40

    38

    43

    39

    44

    40

    41

    Gold

    35

    38

    37

    31

    32

    30

    34

    37

    29

    45

    35

    34

    Owning a home

    28

    37

    30

    23

    11

    32

    29

    31

    21

    20

    38

    23

     

    TABLE 2

    INVESTMENTS PERCEIVED AS HAVING STRONG EARNING POTENTIAL

    By Generation, Investable Assets & Self-Assessed Financial Literacy

    Thinking of the same list of possible investments, which do you feel have strong earning potential? Please select all that apply.

    Base: All adults

    Total

    Generation

    Investable Assets

    Financially Literate

    Millennials (18-37)

    Gen Xers (38-49)

    Baby Boomers (50-68)

    Matures (69+)

    <$10k

    $10k-<$50k

    $50k-<$100k

    $100k-<$500k

    $500k+

    Not very/ Not at all

    Very/ Somewhat

    %

    %

    %

    %

    %

    %

    %

    %

    %

    %

    %

    %

    Stocks/Bonds

    45

    45

    39

    47

    51

    39

    36

    44

    54

    71

    35

    50

    Owning an investment property

    43

    42

    46

    44

    35

    42

    37

    37

    52

    54

    37

    46

    Gold

    42

    37

    46

    45

    40

    46

    47

    45

    41

    30

    44

    41

    Owning a home

    36

    33

    34

    39

    42

    31

    33

    42

    47

    48

    31

    39

    Owning your own business

    32

    39

    28

    29

    29

    34

    27

    32

    26

    42

    26

    35

    Art

    16

    15

    20

    14

    19

    15

    16

    19

    16

    20

    16

    17

    Jewelry

    14

    15

    17

    12

    12

    19

    18

    12

    10

    9

    17

    13

    Luxury/Classic cars

    11

    14

    11

    9

    9

    13

    10

    14

    8

    13

    8

    12

    Wine

    7

    11

    6

    5

    3

    8

    8

    6

    6

    9

    5

    8

    Other

    4

    4

    5

    3

    4

    4

    4

    3

    3

    1

    4

    4

    None of these

    11

    13

    11

    11

    8

    12

    12

    9

    5

    4

    18

    8

    Note: Multiple responses allowed

     

    TABLE 3

    SELF-ASSESSED FINANCIAL LITERACY

    By Generation & Investable Assets

    How would you rate your financial literacy?

    Base: All adults

    Total

    Generation

    Investable Assets

    Millennials (18-37)

    Gen Xers (38-49)

    Baby Boomers (50-68)

    Matures (69+)

    <$10k

    $10k-<$50k

    $50k-<$100k

    $100k-<$500k

    $500k+

    %

    %

    %

    %

    %

    %

    %

    %

    %

    %

    Very/Somewhat financially literate (NET)

    68

    64

    61

    72

    79

    57

    66

    74

    81

    92

    Very financially literate

    14

    13

    14

    13

    17

    5

    11

    16

    17

    43

    Somewhat financially literate

    54

    51

    47

    59

    62

    51

    54

    57

    64

    49

    Not very/Not at all financially literate (NET)

    32

    36

    39

    28

    21

    43

    34

    26

    19

    8

    Not very financially literate

    24

    25

    30

    22

    15

    33

    24

    21

    15

    8

    Not at all financially literate

    8

    10

    9

    6

    6

    10

    10

    5

    4

     

    Note: Percentages may not add up exactly to 100% due to rounding; indicates fewer than 0.5% selected this option

     

    Methodology

    This Harris Poll was conducted online within the United States between July 16 and 21, 2014 among 2,306 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.

    All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, The Harris Poll avoids the words margin of error as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.

    Respondents for this survey were selected from among those who have agreed to participate in Harris Poll surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in our panel, no estimates of theoretical sampling error can be calculated.

    These statements conform to the principles of disclosure of the National Council on Public Polls.

    The results of this Harris Poll may not be used in advertising, marketing or promotion without the prior written permission of The Harris Poll.

    Product and brand names are trademarks or registered trademarks of their respective owners.

    The Harris Poll #84, September 4, 2014

    By Larry Shannon-Missal, Manager, Harris Poll Content