While we often refer to purchasing gold as an investment, this is more for the understanding of people who are new to the idea of using gold as a savings vehicle. Gold could really actually be considered more of an insurance policy than anything—something that protects you when your traditional investments and assets are not performing as expected, or are even failing.
Think of it this way—you would never purchase a car without auto insurance, or a home without homeowner’s insurance, which covers you for any potential risks that could affect your property. Why, then, don’t we have insurance for our financial assets and investments? Gold can be that insurance policy, as its value is not nearly as strongly connected to the rising and falling of the dollar.
Here are just a few reasons why you should use gold investing as your version of wealth insurance:
- Stop relying as heavily on the banking system: Perhaps the biggest reason why you’d want to use gold as wealth insurance is that you can remove some of your wealth from the banking system and be less susceptible to its turbulence. There is a lot of inherent risk associated with the traditional banking system—at any moment, we’re just a couple dominoes falling away from another global financial downturn. Gold protects you in the event of such a banking crisis.
- Additional protection against bank failure: As we just alluded to, when a bank failure occurs (and make no mistake, one will happen again sooner or later), gold can offer you some significant protections against the failure of your other assets. Why put all your eggs in one basket, so to speak?
- Gold has never zeroed out: Every single type of financial product has crashed to the point where it has been worth nothing, at some point in history. Gold has never done this—it is the most reliable asset of value there is, which makes it valuable wealth insurance. Even despite all of the technological changes we’ve seen over the course of the last several decades, gold continues to be worth quite a bit, and is actually increasing in value steadily.
- No counter-party risk: Gold and silver are the only financial assets that do not come with any counter-party risk. This means silver and gold are the only financial assets that are not someone else’s liability as well as yours. In a bank account, you rely on the bank remaining solvent. With stocks or shares, you rely on the company to continue trading and to pay you dividends. With valuable property, you typically have a mortgage holder against it. These are just a few examples of circumstances in which your assets have split liability.
Interested in learning more about how you can use gold investing as a form of wealth insurance? Contact Gold Wealth Financial today and we’ll be happy to answer any questions you have. The time is now to start reducing your reliance on the banking system.
- by Steve Hunt
Categorised in: Gold Investing