Storing Physical Gold - Coins etc.

[luutzu]

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.

He did say "preserve" wealth, not invest hoping to grow etc.

Gold, like anything that's rare, will hold value. Often, increase in "value" simply because someone else would be willing to pay higher for it.

Sure it doesn't generate an income so it wouldn't be worth as much as an equivalent business/productive enterprise would. But it preserves wealth.

If we follow your example... name one productive enterprise over the past 5,000 years that an ancestor could own, it compounds ever since... and still exists.

Gold.

 

[Value Collector]

He did say "preserve" wealth, not invest hoping to grow etc.

A growing portfolio of assets that grows in size and diversity over time is the best way to preserve wealth.

If your assets are growing (even at only 2%), and spreading across different assets and industries, and geographies, it is much more likely to be "preserved".

If we follow your example... name one productive enterprise over the past 5,000 years that an ancestor could own, it compounds ever since... and still exists.

farmland.

 

[Value Collector]

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

Given that we are mining much more than actually gets used, we are essentially creating more every month, and just piling it up.

 

[TikoMike]

You're talking like as if we're saying put 100% into gold or silver. We're not, just a small percentage as insurance against the value of fiat currency. That's what we mean to preserve wealth. What's going to happen to our precious income producing businesses once the fiat paper currency becomes worthless due to an event like say hyperinflation? You want an example, look at how well the businesses are doing in Venezuela with the Bolivar now being worthless. You know what still holds value in Venezuela? Precious metals, guns and food.

 

[luutzu]

You're talking like as if we're saying put 100% into gold or silver. We're not, just a small percentage as insurance against the value of fiat currency. That's what we mean to preserve wealth. What's going to happen to our precious income producing businesses once the fiat paper currency becomes worthless due to an event like say hyperinflation? You want an example, look at how well the businesses are doing in Venezuela with the Bolivar now being worthless. You know what still holds value in Venezuela? Precious metals, guns and food.

In certain situation, guns are the most valuable asset

 

[explod]

Agree, gold is not a money maker but it is the real money because it retains its value and is the best way to hoard.

Around the year 2000 gold was about $250 to $300 an ounce. Today US$1220. There are people who store money, (cash) under the bed so to speak. $250 cash 18 years back $250 today, in gold $1220 today.

Of course it is not recommended as an investment but many agree a 10% storage lot is healthy for a portfolio. My favorite are silver coins, 1966 rounds and pre46 which are 92% pure.

 

[Value Collector]

You're talking like as if we're saying put 100% into gold or silver. We're not, just a small percentage as insurance against the value of fiat currency. That's what we mean to preserve wealth. What's going to happen to our precious income producing businesses once the fiat paper currency becomes worthless due to an event like say hyperinflation? You want an example, look at how well the businesses are doing in Venezuela with the Bolivar now being worthless. You know what still holds value in Venezuela? Precious metals, guns and food.

If I wouldn’t put a large percentage in why would I want to put a small percentage in?

Let’s say the the Australian dollar becomes worthless, and we all start using bitcoin or something else, then I would just start charging my tenants/customers bitcoin.

When you own good assets/ businesses it doesn’t matter what the currency is, you just charge what ever he currency is of the day.

 

[Value Collector]

Agree, gold is not a money maker but it is the real money because it retains its value and is the best way to hoard.

Around the year 2000 gold was about $250 to $300 an ounce. Today US$1220. There are people who store money, (cash) under the bed so to speak. $250 cash 18 years back $250 today, in gold $1220 today.

Of course it is not recommended as an investment but many agree a 10% storage lot is healthy for a portfolio. My favorite are silver coins, 1966 rounds and pre46 which are 92% pure.

And if you bought gold at $1800, you are much worse off than the guy that just held cash under the bed,

And the guy that held the cash in a term deposit beat the guy that held it under the bed

And the guy that owned diversified productive assets eg real estate or property index fund killed them all.

 

[Value Hunter]

ValuCollector I think you missed the point of what TikoMike was trying to say. What you are saying is technically true that if you own assets even if the currency debases/collapses the price/currency you charge will adjust but what you are missing is that a hyperinflation drags down the whole economy (and wipes out the middle class).

Hypothetically if you bought into a chain of restaurants in Venezuela 10 years ago how do you think you would be doing today? How many people in Venezuela actually have money for non-essential purchases like restaurant dining?

Productive assets perform are good when the economy is doing okay. If the economy is collapsing (including hyper-inflationary collapse) most productive assets will not be performing well. In a collapsing economy gold will tend to do better than productive assets.

 

[luutzu]

ValuCollector I think you missed the point of what TikoMike was trying to say. What you are saying is technically true that if you own assets even if the currency debases/collapses the price/currency you charge will adjust but what you are missing is that a hyperinflation drags down the whole economy (and wipes out the middle class).

Hypothetically if you bought into a chain of restaurants in Venezuela 10 years ago how do you think you would be doing today? How many people in Venezuela actually have money for non-essential purchases like restaurant dining?

Productive assets perform are good when the economy is doing okay. If the economy is collapsing (including hyper-inflationary collapse) most productive assets will not be performing well. In a collapsing economy gold will tend to do better than productive assets.

I think his scenario depends on him the capitalist being able to move his capital to where the liberators cannot sanction and choke off the economy. Which is true if you have capital/wealth/asset you can invest rather than earn through labour.

Maybe that's why capitalists doesn't much care for climate change. There's always New Zealand, or Mars.

Reminds me what Phillip Fisher was saying about stock investment... it's great, don't be afraid of a war scare because... well, because if war does come (to America), all assets are going to be useless anyway.

Maybe gold and a few ammo.

 

[Value Collector]

ValuCollector I think you missed the point of what TikoMike was trying to say. What you are saying is technically true that if you own assets even if the currency debases/collapses the price/currency you charge will adjust but what you are missing is that a hyperinflation drags down the whole economy (and wipes out the middle class).

Hypothetically if you bought into a chain of restaurants in Venezuela 10 years ago how do you think you would be doing today? How many people in Venezuela actually have money for non-essential purchases like restaurant dining?

Productive assets perform are good when the economy is doing okay. If the economy is collapsing (including hyper-inflationary collapse) most productive assets will not be performing well. In a collapsing economy gold will tend to do better than productive assets.

I think by doing that you are paying a high cost to insure a very low tail risk.

Notice I said
A growing portfolio of assets that grows in size and diversity over time is the best way to preserve wealth ... and spreading across different assets and industries, and geographies, it is much more likely to be "preserved".


Even if you pick the worst case scenario of living in Venezuela, if you had some assets paying dividends in US dollars and EURO, you would be fine.

 

[Value Collector]

If you take a look at the families and organisations that have truly preserved vast sums of wealth for centuries, they hold a lot of diverse productive assets, in fact if the assets aren't productive they will be frittered away over time and not preserved.

Take a look at the asset bases like the Crown Estate, it's a diverse mix of Farmland, real estate holdings, forestry assets, businesses, resources etc, it has being funding the English royal family for nearly 1000 years, through many wars, depressions, currencies etc etc It's currently estimates (conservatively) to be worth 7 Billion Pounds, and it throws off a few hundred million pounds in walking around money each year.

The Royal family receive 15% of the income from the crown estate, they hand over the other 85% to the treasury.

 

[luutzu]

If you take a look at the families and organisations that have truly preserved vast sums of wealth for centuries, they hold a lot of diverse productive assets, in fact if the assets aren't productive they will be frittered away over time and not preserved.

Take a look at the asset bases like the Crown Estate, it's a diverse mix of Farmland, real estate holdings, forestry assets, businesses, resources etc, it has being funding the English royal family for nearly 1000 years, through many wars, depressions, currencies etc etc It's currently estimates (conservatively) to be worth 7 Billion Pounds, and it throws off a few hundred million pounds in walking around money each year.

The Royal family receive 15% of the income from the crown estate, they hand over the other 85% to the treasury.

Trick question: If Hitler made it over the channel, would those still be preserved?

 

[Value Collector]

Trick question: If Hitler made it over the channel, would those still be preserved?

Trick question, if your dodgy neighbour made it over the fence, would your gold still be preserved?

you have much more risk of gold being stolen than a world war resulting in land being taken.

But as I said

A growing portfolio of assets that grows in size and diversity over time is the best way to preserve wealth ... and spreading across different assets and industries, and geographies, it is much more likely to be "preserved".

No reason why the crown estate (or you) can't own assets all over the world.

 

[jesser]

Adjusting for inflation, the value of gold was range-bound for the last two hundred years with a couple of substantial spikes in recent decades.

If you're buying purely for "insurance" then that may be reasonable. But gold is not historically a long-term wealth-preservation asset. There are far too many times where if you had purchased gold you would have lost substantial wealth decades later, no matter how many currency downturns you had successfully rode through.

Also, if you're buying gold believing that there may be a downturn "soon-ish", you're really just trying to time-the-market broadly. And if you're smart enough to time markets, there are far better ways to make and keep wealth than buying physical gold.

 

[aus_trader]

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.

This is pretty much the Warren Buffet view as well, as I mentioned earlier and the fact that owning gold does not entitle the holder to any interest/dividends etc.

Although it's not the fastest way to wealth, it does hold value and preserve wealth I suppose.

 

[Wysiwyg]

This is pretty much the Warren Buffet view as well, as I mentioned earlier and the fact that owning gold does not entitle the holder to any interest/dividends etc.

Although it's not the fastest way to wealth, it does hold value and preserve wealth I suppose.

Still tagged to cash, like one has to convert it back at some stage before death unless the next generation are going to hold. Then at conversion it is cost to buy v cost to sell to determine if wealth was actually preserved or not. Nice to look at and feel good about but eventually one hopes to convert back with something to show for the time as a metal.

 

[aus_trader]

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.

I think most investments are speculative in nature, but that's probably another topic. Although if you can name one investment that can hold value in good times and bad please everyone know, I'll certainly be interested and be thankful. Just able to hold value is OK, doesn't have to be income producing (pay interest/dividends etc) or have capital growth.

Why is this important? Maybe I didn't mention it at the start of the thread but this topic is about making sure we (the small community of us here) are going to be less harmed financially in crisis situations such as GFC or worse. We don't know when that may happen but it's good to prepare right?

It's not about selling all financial assets and going all in with a backpack of gold bars and hiding in a bunker till the crisis is over. I'll be right here with everyone sharing information and learning from others as to how we can protect and preserve some of our wealth, rolling with the punches so to speak.

About the decent safes, sorry but I'm not interested. Let me explain. There is an unforeseen scenario most people won't consider in our lucky country of Australia that needs to be taken into account. It is this: if the robbery happens while you are at home, the burglar could put a gun to your child's head and request that you open the safe. What would you do? I can have the most advanced combo locked, fingerprint/retina scanned, unbreakable safe in the world to store my valuables at home but I won't put cash or gold in it. I'll put the things that are likely to be destroyed in a fire or flood in it like photos and memorabilia as well as any family heirlooms that is precious to me but of almost no value to a thief or burglar.

 

[aus_trader]

A growing portfolio of assets that grows in size and diversity over time is the best way to preserve wealth.

If your assets are growing (even at only 2%), and spreading across different assets and industries, and geographies, it is much more likely to be "preserved".



farmland.

I think the farmland is also a good way to preserve wealth, up front cost would be fairly high which could be a barrier to entry. Also any ongoing land tax/maintenance costs need to be looked into. Something I have no prior experience with but will look into should the opportunity present itself.

 

[aus_trader]

Agree, gold is not a money maker but it is the real money because it retains its value and is the best way to hoard.

Around the year 2000 gold was about $250 to $300 an ounce. Today US$1220. There are people who store money, (cash) under the bed so to speak. $250 cash 18 years back $250 today, in gold $1220 today.

Of course it is not recommended as an investment but many agree a 10% storage lot is healthy for a portfolio. My favorite are silver coins, 1966 rounds and pre46 which are 92% pure.

Thanks for the info explode, are you talking about Aussie coins, when you say Silver coins?