Financial literacy And Wealth Management

Is buying gold for investment purposes a good idea? (Financial Education)

I’m no Robert Kiyosaki, but I’m aware that he buys a lot of Gold or AU (For all you science nerds out there), but you and I have probably asked this question before, Is gold a good investment?

At first, I thought gold was only meant for rappers who wanted to flex in music videos, but once I learned that there are actual people who have a mini-safe and collect gold, I thought that was crazy, however, I found out my mum had gold rings that she never wore, so I asked her one day.

“Why don’t you use those gold rings?” And to my surprise, she said “These gold rings are very valuable, just in case anything happens I’m saving them.”

I thought she was one of those crazy “The end is near” kind of people, but instead of mocking her decision I decided to do some research, and this is what I found.

Gold is a precious metal with several practical uses, particularly in technology, for example, NASA uses gold to improve its lasers and protect sensitive things in space, including a part of the visor for its astronauts.

However, most of the demand for gold worldwide is as an investment, particularly by central banks, gold serves the purpose of an alternative to currency, because it’s relatively scarce, but still has enough mine production to serve the financial sector.

Also, Statista states that gold is even held by countries in reserve in case of uncertain situations in the economy, since it has gotten the reputation of being, faithful and having an average tendency to rise, this makes it a great back up plan for those “Rainy days” in the economy.

However, I still wasn’t sold on the idea of buying gold coins for investment purposes, and that was until Robert Kiyosaki did an interview that discussed why he and his wife Kim Kiyosaki were always investing in gold, they said.

“We don’t intend to sell this gold, It’s our insurance and wealth capturer.”

Just like what my mum said it’s their last resort, just in case anything happens they don’t drop to nothingness.

It may not be used to buy things, but it gives you that peace of mind knowing that your financial life has a strong foundation.

I’ll go and get some right now!

Hold on, I know how it’s like to take action on some golden advice but there is a warning about Investing in gold, I would like you to know, after all, not all that glitters is gold. 🙂🥇

IT’S NOT AN INVESTMENT!

If you were to compare it to the s&p 500 from 1974 to 2018.

Since gold was a rather fixed price from 1970, we can only look back at the last 45 years adjusted for inflation to make a fair judgment of its value.

If you take the price from 1978, gold was trading at $208.10 for one ounce, but if you were to convert that in today’s money it would be $838.68.

And if you research the price of gold today it’s currently standing at $1,645.68, if you were to do the math this means that gold has risen in value by 45% over the last 40 years.

Now time for the comparison, the s&p 500 went up in value by 630% over the same time period adjusted for inflation.

If you do the math over the last 40 years gold has only gone up by 1% every year, compared to the s&p 500 which was 5 times more.

And, you’ll have to handle these headaches when using gold as an investment.

Bid/ask price which, already puts you at a disadvantage the moment you buy.
Shipping cost.
Storage cost.
The government making gold illegal and taking it away from you, (YEAH! this has happened before, Franklin D. Roosevelt issued Executive Order number, 6102 and made gold illegal for all Americans, from 1933 to 1974).
It doesn’t produce dividends.

I think you will find this video comedy gold, Warren buffet exposes his secret perverted thoughts, on what he would do if he had all the gold in the world 🤣🤣🤣.

IN CONCLUSION

I know I have given gold a bad name in this blog post, but that’s only because it isn’t an investment and doesn’t do anything.

However, if you feel comfortable knowing, if there is a disaster you have protection, then by all means get some gold to diversify your portfolio.

Besides what’s the harm in getting some gold coins and having, them as a “Set it and forget it” type of strategy, as Robert Kiyosaki said.

“Gold is God’s money, it’s been here before us, and it will be here after us”.
– Robert Kiyosaki

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