€10,000 in bottled water or in ETFs: the self-sufficiency dilemma

€10,000 in water and canned food: the investment that never trades

Imagine a warehouse holding €10,000 worth of bottled water and canned food. Facing it, an ETF portfolio with the same amount. The comparison sounds absurd, but it goes further than it seems: it pits physical self-sufficiency against financial returns. You can't eat an ETF, the argument goes. In an extreme scenario, liquidity in essential goods can make all the difference.

The desert scenario

The favorite example is a person 80 kilometers from the nearest city, under a blazing sun. Without water, they wouldn't make it even 40. In that situation, the question is straightforward: would you prefer €500 million or several liters of water? The answer seems obvious, but the counterargument comes from anyone who doesn't live near a desert: the probability of needing that water is low, and the opportunity cost of having money sitting in canned food that expires is high.

Financial logic answers

The sarcastic reply is not long in coming: how does compound interest work on bottled water? What are the custody fees for the warehouse? Canned food expires before the apocalyptic scenario arrives, another camp points out. Money in ETFs, besides generating returns, is immediately liquid: you can sell whenever you want. Water jugs have no secondary market.

The question remains open, but there's one striking detail: whoever raises the extreme scenario admits that, 80 km from civilization, water wins. The uncomfortable question remains how many investors actually live 80 km from a desert.