So after a very long period of discussion (not due to my own fault), I’ve decided to invest in gold.
Up until this point, I’ve been stubborn in thinking that buying gold and physically storing it myself would be the best way to store it. However - it has recently been recommended to me to look into companies such as BullionVault, whereby you add funds to an account to buy gold/silver, and they store & insure it for you.
I have two concerns and questions with this:
Firstly:
With the amount I’m purchasing (probably £5,000/$8,132 at first, then £15000/$32,529 at a later date) I think with a company like bullionvault, depending on the amount you buy, you only own a certain amount of a bullion bar. For example, if I bought 0.15kg, it would be that amount of a 1kg bar. So essentially all bars are part-owned by many people. I cannot confirm this, but I believe that is how it works.
In your opinion, do you think this is much of a concern or problem?
Secondly, is there anything more unsafe/risky in purchasing gold at a company like bullionvault as opposed to buying it and storing it myself?
Just looking for some advice on this from those who know a lot more than I do. All this time I’ve convinced myself self-storage is the way to go, but buying it from somewhere like BullionVault seems very simple for the average individual to do.
I would rather have the physical metal on hand. It could be seized from bank vaults and deposit boxes by governments in future. They could fix the price of gold against a new currency. They could do any number of awful things, but they can’t do anything to gold coins you have hidden and on-hand which they do not know about. I would buy coins if I were you.
That has been my thoughts for the most part. But because of it’s simplicity to buy and store it’s quite appealing to do.
What would you say if the gold I bought I owned fully, but was stored via a company? So if I bought a 100g bar or 1oz coin, it was allocated just to me, and not partly owned. Would you have a different opinion then or still prefer physical metal to hold personally?
(I believe bullionvault does this at higher prices than I can afford, but I know of other companies that accept this. And thus if you ever wish to have it delivered to you there is that option)
I saw some guy on MSNBC that was saying that the plan the whole time has been to go back to a gold standard and he divided the amount of gold held by the governemnt to M1 and the price of gold will be revalued higher than it is now to avoid deflation. At the time (2010 sometime) he said that the price would be around $5000. So we can still make money on the devaluation, especially if they do not confiscate the holders of it.
It almost sounds like a reward for those that hold gold…
Grab all the gold you can get your hands on. If Esuric is foolish enough to sell you his, well some people have to learn the hard way.
Funny thing about gold. People like to steal it.
They will give you pages and pages of paperwork proving you own the gold in their vault, but when the chips are down, their vaults might be empty. Or they might have sold the same gold coin to twenty people, “storing” it for them all.
Keep it in your physical possesion. Don’t tell anyone you even have it, much less where it is.
Don’t buy anything fancy. Go with bullion, or the standard coins, Canadian Maple Leafs etc.
Beware who you buy from, that he isn’t marking up way past the spot price.
I would say that land is a better physical asset to hold than gold at present. By most measures, land is cheap at its current prices, and has lower taxes on transactions than gold for longer holding times. You can rent property to offset the holding costs, or you can develop a property and sell it at a profit to offset the holding costs (or even add to your wealth).
The advantage to gold, of course, is that the holding costs are extremely low and it is a very compact place to store wealth. Unfortunately, if you sell your gold in the US after holding it for a long time, it’ll cost you a mint in capital gains taxes (since the dollar likely fell apart over the time that you held it). So, the transaction costs go up exponentially the longer that you hold your gold.
That said, maybe gold is still the best short-term wealth storage vehicle… or a long term wealth storage vehicle so long as you sell it in Mexico.
If you pay for gold in cash, and store it yourself, there is no trail. It is essentially tax free. You can look up ways to hide your valuables on google. Floorboards, false light switches. Lots of creative stuff.
Well, practically yes, but legally no. By the law, you’re supposed to report your capital gains; however, as long as you do small transactions, nothing is reported to the government. Anyhow, with recent developments, I think that trading in dollars for gold is probably a really good bet at the moment.
I’m not saying that capital gains tax law is good, or even that it’s not extremely harmful… I’m just pointing out that it is.
After some reading and some of my other posts on this forum, I’ve come to realize that the capital gains tax is probably the #1 reason that the Federal Reserve has a monopoly on the medium of exchange in the United States.
I don’t think that you will have to pay any capital gains taxes on the sale of gold, the physical commodity, if you make a private sale. Your ownership of gold is not registered anywhere, nor is there a record of cost basis.
If, however, you had invested in an ETF – or some other investment vehicle – that is based on gold, then you would be liable for capital gains taxes.
Also, the ownership of the physical commodity is safe so long as you abide by the rule of not bragging about your ownership. You can easily have a safe mounted in a concealed space between walls or underneath floors. I have even heard of people creating a concealed safe in the concrete floor of their basement. You could also go the route of burying sealed containers on your property.
I’d say that you should purchase a safe if you’re buying that much gold. They’re not terribly expensive. It’s probably best not to advertise your gold ownership by involving another party. A $300 safe discreetly bolted to your concrete basement floor somewhere out of view can store a lot of wealth, and defeating said safe would require a bit of effort for any would be criminal.
I don’t see a real reason to have someone else hold your gold.
But more practically, what about the military ransacking homes, like happened to the Jews during WWII? You could have a bank vault in your basement, but the military has enough C4 to blow it open.
Thanks for all the responses, they have been very thoughtful and helpful!
After some thought I decided to pass buying gold on bullionvault. I liked the idea of the simplicity of being able to buy and sell on there, but if I ever had a company store gold on my behalf I would prefer to have the choice of it being delivered to me if I chose too.
What I’m hoping to do is make a small purchase of gold first, then get large quantities later on.
I’ve seen many financial advisors recommending to put only 5-15% of my portfolio/investment into gold, at most. However, I was considering to buy a much higher % than this. Do you think this would be much of a concern if I chose to?
My main concern is if I don’t look at buying gold soon, it will reach a much higher price. It’s taken me over a year to make a decision, and gold has gone up £250 since then.
I was also considering an investment in silver as well
If the US military starts ransacking homes for treasure (a good reason to keep your wealth on the down-low, mind you), there are bigger problems, and I’d suggest taking your gold and quietly relocating to Mexico or Canada.
Buy commodities, just not gold right now. Even compared to food and oil, gold has risen in price dramatically. While the international central banking system is definitely coming apart at the seams and they are all printing money competitively, it is not clear that hyperinflation is the inevitable result. The trouble with gold is not that it can’t keep going up forever… as long as there are central banks it not only can but must. But that doesn’t mean it can’t crash from $1,650. The trouble with gold is that it has attracted a lot of fair-weather investors, a lot of “technical” investors, and a lot of other latecomer herd investors. These people will shed their paper gold in a nanosecond if the gold price drops, say, 15-20%.
I believe the central banks are looking for an opportunity to punish gold investors. If a panic starts in gold, I anticipate the central banks to pour fuel on the fire by announcing large sell-offs and a formal end to quantitative easing to “harden up” the paper money. I don’t see how it’s impossible to have a 50% correction in gold.
In the long run, of course, gold will just continue going up and up until the central banking system implodes on itself. But until it does implode, they will keep playing the same games they’ve been playing for centuries. I recommend buying any other commodity right now than gold or silver. Buy copper, buy platinum, buy oil, etc. It’s not clear that we are certainly headed for war. Until war becomes certain, you really can’t be sure that gold couldn’t have a massive correction on the downside. The safest thing to do is stay out.
Just don’t buy land within the US. The trouble with land is you can’t take it with you. Faber and Rogers also recommend buying land and I would direct anyone considering buying land in foreign countries to read what they’ve said about this.