Storing Physical Gold - Coins etc.

aus_trader · 17 July 2018

G'day all,

I really like everyone to get involved in this discussion, since the combined knowledge of all would be so much more powerful than one individual. So here is my dilemma...

I am thinking about getting some exposure to Gold, particularly physical gold rather than gold related investments and gold mining companies. Main reason for this is to have some exposure to an asset that may preserve wealth. The problem is storing it securely. There's also ongoing costs with secure storage !

The problem is not with purchase of an once or two along with a few coins, but rather storing it securely so that it doesn't go missing from under the mattress during a house robbery scenario

Because I see Gold as more of a hedge against currency de-valuations due to money printing etc, it's hard to justify ongoing storage costs. Also Gold is not income producing asset as owning gold does not entitle you to dividends or interest. So in a way I sometimes get negative thoughts about the whole idea of trying to own a bit of gold, especially when Warren Buffet's view on gold comes to mind. Buffet's comments were "Gold gets dug out of the ground in Africa, or some place," said Buffett in 1998. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it."

So is there a way to buy and hold some gold securely with minimal or no ongoing fees ? If not what other assets are there that can preserve wealth safely?

greggles · 17 July 2018

aus_trader said:
Buffet's comments were "Gold gets dug out of the ground in Africa, or some place," said Buffett in 1998. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it."

So is there a way to buy and hold some gold securely with minimal or no ongoing fees ? If not what other assets are there that can preserve wealth safely?

Buffett has a very good point that highlights the difficulty of owning physical gold. If you own it, you need to protect it. It's great for central banks, large companies and very rich people who already have security infrastructure in place, but for regular people storing and protecting physical gold is more trouble than it's worth.

I have a friend who owns 13 acres in regional Queensland and has no money in the bank. All his cash is kept in coffee tins which he has buried in various places on his property. For a thief, finding them would be like looking for the proverbial needle in a haystack. So this is my solution if you want to own physical gold. Get out of the city, buy a decent amount of land, then start digging and burying your gold. Just make sure you remember where you buried it.

cynic · 17 July 2018

greggles said:
Buffett has a very good point that highlights the difficulty of owning physical gold. If you own it, you need to protect it. It's great for central banks, large companies and very rich people who already have security infrastructure in place, but for regular people storing and protecting physical gold is more trouble than it's worth.

I have a friend who owns 13 acres in regional Queensland and has no money in the bank. All his cash is kept in coffee tins which he has buried in various places on his property. For a thief, finding them would be like looking for the proverbial needle in a haystack. So this is my solution if you want to own physical gold. Get out of the city, buy a decent amount of land, then start digging and burying your gold. Just make sure you remember where you buried it.

Metal detectors are fairly efficient these days, so diamonds (in non metallic ontainers) would need to be considered as an alternative for this security method.

sptrawler · 17 July 2018

Here is a link to the Perth Mint Gold.

https://www.perthmint.com/storage/perth-mint-gold-asx.html

It has costs associated, but it is probably safe.

The other way to store it, is to buy a safe deposit box, in a bank.

TikoMike · 17 July 2018

sptrawler said:
Here is a link to the Perth Mint Gold.

https://www.perthmint.com/storage/perth-mint-gold-asx.html

It has costs associated, but it is probably safe.

The other way to store it, is to buy a safe deposit box, in a bank.

My opinion is that it's not a good idea to have it in a safety deposit box in the bank. Along with preserving wealth from a fiat money downturn, the whole idea of buying precious metals is to insure/protect from things like that.

sptrawler · 17 July 2018

TikoMike said:
My opinion is that it's not a good idea to have it in a safety deposit box in the bank. Along with preserving wealth from a fiat downturn, the whole idea of buying precious metals is to insure/protect from things like that.

What you think the bank would raid your safe deposit box?

cynic · 18 July 2018

sptrawler said:
What you think the bank would raid your safe deposit box?

Possibly, as a recent commission has found, they're no longer paragons of virtue!
Also this type of event might give rise to further cause for concern:
http://www.abc.net.au/news/2015-04-...-deposit-boxes-raided-in-easter-heist/6378092

Wysiwyg · 18 July 2018

Who would look in a Baked Bean can? What evidence is there that gold preserves wealth?

sptrawler · 18 July 2018

cynic said:
Possibly, as a recent commission has found, they're no longer paragons of virtue!
Also this type of event might give rise to further cause for concern:
http://www.abc.net.au/news/2015-04-...-deposit-boxes-raided-in-easter-heist/6378092

Oh well, it's back under the bed with the gold bars then.

aus_trader · 18 July 2018

greggles said:
Buffett has a very good point that highlights the difficulty of owning physical gold. If you own it, you need to protect it. It's great for central banks, large companies and very rich people who already have security infrastructure in place, but for regular people storing and protecting physical gold is more trouble than it's worth.

I have a friend who owns 13 acres in regional Queensland and has no money in the bank. All his cash is kept in coffee tins which he has buried in various places on his property. For a thief, finding them would be like looking for the proverbial needle in a haystack. So this is my solution if you want to own physical gold. Get out of the city, buy a decent amount of land, then start digging and burying your gold. Just make sure you remember where you buried it.

Thanks greggles, you've highlighted some good points about the difficulty in this storage problem.

aus_trader · 18 July 2018

cynic said:
Metal detectors are fairly efficient these days, so diamonds (in non metallic ontainers) would need to be considered as an alternative for this security method.

Yes I've even seen people waving these metal detectors around on beaches etc looking for ancient coins and artefacts.

So not only will the robbers find it under your bed, but they'll dig it out of the backyard as well. Good point, so these days even greggles' friend's method of burying them randomly in farmland may be futile...

aus_trader · 18 July 2018

sptrawler said:
Here is a link to the Perth Mint Gold.

https://www.perthmint.com/storage/perth-mint-gold-asx.html

It has costs associated, but it is probably safe.

The other way to store it, is to buy a safe deposit box, in a bank.

I will look into these options, not necessary to jump on the idea but if there is an extremely good case for holding Gold, I will consider the costs associated. I am still making up my mind about putting a small % of my savings/assets into gold so this thread is proving to be very valuable to look at it from all angles.

When I say extremely above, I need to be as clear and confident that printed money is losing value like there is no tomorrow heading towards Zimbabwe/Venezuela type disasters. I think we are no where near those levels just yet... in my opinion.
Thank you for the thoughts.

aus_trader · 18 July 2018

TikoMike said:
My opinion is that it's not a good idea to have it in a safety deposit box in the bank. Along with preserving wealth from a fiat money downturn, the whole idea of buying precious metals is to insure/protect from things like that.

I think you are thinking just like me. Yes this thread was started to try and find ways to move a small % of your wealth from a possible fiat money downturn (borrowing your words) into safer assets outside of the banking system. So a safety deposit box in the bank would be like giving them back the very thing that they (the whole system) may be dying to get their hands on. I say that because they have moved away from the gold standard which is why they've been able to print excessively. If gold standard was still around money would be in limited supply and the amount they issue out to the world (new notes being printed) will be backed by how much gold is held in the vaults.

aus_trader · 18 July 2018

Wysiwyg said:
Who would look in a Baked Bean can? What evidence is there that gold preserves wealth?

Hey mate, there is no guarantee gold would preserve wealth, but as I explained above but if gold standard was still around, the price of gold would have to be multiple times higher than what it is today to justify the amount of money that has been issued out (printed) by the central banks around the world. So that's why I thought to have at least a small % of my wealth (say 5 to 10%) in gold to keep it away from the de-valuing fiat money system. It's proving to be difficult due to storage issues but this thread may give people (including myself) ideas to look to preserve a little of their wealth outside the banking system, whether it's through gold or some other hard(not paper) assets...

Value Collector · 18 July 2018

aus_trader said:
So that's why I thought to have at least a small % of my wealth (say 5 to 10%) in gold to keep it away from the de-valuing fiat money system ...preserve a little of their wealth outside the banking system, whether it's through gold or some other hard(not paper) assets...

You are half right.

You are correct in the assumption that you shouldn't store to much wealth as fiat currency.

But,

You are wrong in thinking that holding that wealth as gold is the best alternative.

You are far better of holding real assets that will not be depreciated in real value by inflation, but that also generate income at the same time, that way you will get the inflation hedge you want, while also getting investment returns.

aus_trader · 19 July 2018

Value Collector said:
You are half right.

You are correct in the assumption that you shouldn't store to much wealth as fiat currency.

But,

You are wrong in thinking that holding that wealth as gold is the best alternative.

You are far better of holding real assets that will not be depreciated in real value by inflation, but that also generate income at the same time, that way you will get the inflation hedge you want, while also getting investment returns.

Yes, on the same page here in terms of buying income producing assets. I am holding a few dividend producing stocks/funds in my Medium/Longer Term Stock Portfolio

If ongoing storage costs were not a barrier to holding gold bullion safely, I would still consider it as a small percentage of my overall investments.

explod · 19 July 2018

Gold has preserved wealth for 5 thousand years and when the money printing becomes exhausted it will be one of the few good assets to survive the coming crescendo in my humble opinion.

aus_trader · 19 July 2018

explod said:
Gold has preserved wealth for 5 thousand years and when the money printing becomes exhausted it will be one of the few good assets to survive the coming crescendo in my humble opinion.

Absolutely, gold cannot be created(unless you can hire a star) or printed so I totally agree with your humble opinion.

Double thumbs up from me for your comments, I could only give one like.

galumay · 19 July 2018

Its not an investment IMO, just a speculative gamble. Gold has no intrinsic value and depends on the emotional, greater fool to create price rises, every ounce ever mined is still in existence and its a very common commodity. None the less, if you want feel the need to own lumps of dull yellow metal, you can buy decent safes very cheaply these days so its not too hard to store.

Value Collector · 20 July 2018

explod said:
Gold has preserved wealth for 5 thousand years and when the money printing becomes exhausted it will be one of the few good assets to survive the coming crescendo in my humble opinion.

It feels like you have been saying that for 5 thousand years.

In reality, if your family owned an ounce of gold 5000 years ago snd held it till today, its still an ounce of gold, sure it would have maintained in value, and perhaps even gone up in purchasing power a bit, it would be worth nothing compared to what

But, if instead of owning that ounce of gold you just invested $1 in productive assets generating just 2% per year, you would literally own the world, that original $1 would have grown into 1000's of Trillions of $$$

Time is the enemy of gold, and the friend of productive assets.

Storing Physical Gold - Coins etc.

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