When we think about gold, we instantly think about that yellow-ish precious metal that’s widespread around the world. Nowadays, buying gold has been all the rage. However, quite a few people have preferred investing in various alternatives that have a better return on investment in today’s market.
Naturally, buying gold wouldn’t be such a successful investment scheme if there were no “pros” to it. Nowadays, it’s a bit more unpopular due to countless investment opportunities on the rise that could potentially lead to your second passport portfolio.
However, Robert Kiyosaki famously said that crypto is people’s money but that precious metals like gold and silver are God’s money.
Needless to say, we know that there will always be entrepreneurs and investors who will continually invest in buying gold even though they go “out of style.”
In this article, we’re going to discuss the pros and cons of buying gold. Not only that, but we’ll be discussing how you can trade, buy, and store these precious metals and five alternatives to buying gold if this isn’t something you want to invest in.
The Pros of Buying Gold
Our friend, Reid Kirchenbauer of InvestAsian, has said that buying gold is a great idea that he is not undermining. He owns gold, and most people in his circle own a good amount of gold. However, there are people, especially government officials, who go out of their way to get their hands on gold. Some of these people even go as far as confiscating gold, so going offshore is a great way to properly store gold and avoid gold confiscation.
This goes to show that precious metals last even though various investment opportunities arise in the future.
Not only does gold never go out of style, but it’s also a great hedge against inflation that has been targeting major economies around the world. Plus, gold has an appreciation potential that cryptocurrencies or other kinds of investments don’t have. Though it doesn’t pay dividends, its value appreciates through the years.
Gold has always been seen as more of a long-term investment. But with a weaker dollar and an underperforming US economy, gold’s value is rising as central banks, particularly in China, have begun increasing their reserves. This means that gold’s medium-term value is certain to remain relatively stable.
The Cons of Buying Gold
Like everything else in life, there are some cons to buying gold or buying gold coins.
Even if you’re an entrepreneur who knows how to invest in gold, there are some things or events that may lead to bad or missed opportunities. There are factors that you need to consider, like inflation and diversification.
There are also some tips for buying gold to consider. You just have to know where to look.
As we’ve said, gold has an appreciation potential. However, gold has been stagnant since the great recession of 2008. So the value of your gold investments is probably not rising. This makes your wealth stagnant as well.
The Truth About Buying Gold
If you’re an investor who already has wealth, either offshore or not, then it’s best to have a little bit of investment diversification. It’s better not to have all of your eggs in one basket. Aside from that, it’s best to know what your other options are.
One thing to consider is the “buy-sell spread” that most people buying gold have to deal with. Not many people realize this, but you’re never going to buy gold at its spot price. It’s always going to be 5% to 10% above it.
Then again, you’ll never be able to sell gold at its spot price. It’s always going to be 5% to 10% below it. So this isn’t an ideal situation for most investors, even if you’re an investor who does know how to invest in gold. This is also why a lot more people seek alternatives to buying gold these days.
However, there may be a way for you to invest in gold with low to no spread. This is a “game” that most investors need to be well aware of.
Another thing to take into consideration is your storage location. Sure, you can store your gold at home. Then again, you must be putting a lot of trust in your safety deposit box. You can also store it in offshore gold storage or a bank, but that charges a monthly fee.
In our opinion, the best way to store gold is by putting it offshore. It is a great way to avoid any kind of gold confiscation.
It’s best to think about things like these before you invest in something tangible like gold. You should also consider storing it in one of the best countries for great offshore gold storage in 2023.
Alternatives to Buying Gold
Through the years and through the rise of various investment schemes, countless alternatives to gold have been introduced to the market. There has been a rise in multiple digital investments as well as tangible assets.
The thing is, many entrepreneurs and investors alike are skipping through gold. These people are putting their money where they can see it. They’re choosing to invest in something that isn’t as stagnant as gold.
Even though gold has such a high appreciation rate, there are various investment opportunities that most investors can look at. This is important, especially if you want to diversify your assets.
Investing in Silver
The first alternative is another precious metal.
Now, this might not be as sought after as gold is, but it’s relatively more inexpensive. An ounce of silver can be purchased at $21 (Spring 2023). In contrast, an ounce of gold can be purchased at $1,900. There’s a high price difference between silver and gold, which makes it a bit easier to choose silver as the main alternative to gold.
However, even though silver is considerably cheaper than gold, and even though people or investors are more likely to barter with silver, there’s one thing that most people have to know. It’s that there’s only 10% more silver reserves than there is gold reserves. So there’s not much of a supply for these types of precious metals even though it’s a good investment.
When it comes to cryptocurrency, this seems like a whole new world for the older generation. However, crypto investments can often lead to better gains and better hedges against inflation. There are countless crypto-friendly countries in the world. Not only that but there are things that you can now pay for using crypto.
Did crypto have a tough time last year? You bet. But was it anywhere near as bad as some pundits were expecting? Not even close. Time and time again cryptocurrencies on the whole have proven their resilience.
Like most digital currencies, there are so many to choose from. So it’s always best to know which ones are worth investing your money in.
It’s true that crypto investments are a bit riskier since cryptocurrencies in general are a bit temperamental. One day everything is going great, then your stocks might be dropping the very next day. Although, appreciation is proven in most crypto investments. There’s also a better chance of earning more money if you’re willing to take more risks.
Investing in Real Estate
No matter who you ask, real estate will always be one of the best investments that each entrepreneur and investor can make. Even if you don’t know how to invest in real estate, there are certain factors that you’ll have to consider to succeed in this investment scheme.
The first thing that you’ll have to look at is the location. Where are you going to buy this property? This is an important question to ask yourself. Think of it before signing any deed or contract since the location can seriously make or break this investment opportunity.
Location is also very important since certain countries will allow you to purchase a real estate property and give you a second residence or citizenship in return. One of the key “investments” that the Caribbean has is real estate. It’s usually included in their citizenship by investment packages. So it’s best to know what you’re getting into because you might qualify for things like this which can diversify your passport portfolio.
Generally speaking, real estate markets in top-tier cities like most capital cities in the world have performed better than gold in the last 30 to 40 years. This is one of the reasons why most investors prefer investing in real estate than buying gold.
Investing in Electric Vehicle Metals
Another alternative to buying gold is investing in electric vehicle metals like nickel and cobalt.
This is such a great investment opportunity for those who are into electric vehicles or simply vehicles in general. Countries around the world like China wish to modify their vehicles to be more electric by at least 80% by 2030. So there’s a great market for these types of metals.
While both nickel, cobalt, and other electric vehicle metals are cheaper than precious metals, there’s a bit of downside to it. When you purchase these metals, you’ll have them in bulk. So one of the problems you’ll encounter is where you’ll be storing them.
Another thing that you have to consider is while appreciation values for these cheap metals are there, there are no rental yields. You won’t be able to make money off them until you sell them to whoever is interested in buying them.
Investing in Other Currencies Investments
Lastly, you might want to consider buying other currencies.
Suppose you want to diversify your investments; investing in other currencies like the Swiss Franc, Singapore dollar, or the South Korean won can be a great idea. These are currencies that have proven to be stable during the last decade, and these are currencies that can be great to invest in.
Each investor should consider investing in the currency directly, but you also can invest in assets denominated in that currency. Meaning if you own real estate in a foreign country for example, then you are also investing in the currency of said country. Then you’ll have better asset diversification when you go through that latter route.
Choose the Best Alternative to Buying Gold
It’s always best to know which options are great for you and which alternatives to buying gold can be the ones that will benefit you the most. Sure, buying gold can be a great investment, but there are so many other investment options that you can venture into. If you’re still interested in buying gold though, check out these tips on how to buy gold in 2023.
Out of all the options that we’ve listed above, which one do you think is the best alternative to gold?