My grandfather, a wise man, proficiently handled finances despite his humble background as a blue-collar worker. As a result, our home never experienced a monetary crisis that he couldn’t solve. He enlightened me with a memorable financial lesson: each dollar in my possession is like a seed. This seed can either be consumed now or sown, resulting in a flourishing growth of financial abundance in the future.
According to him, saving money represents the first stage of sowing this seed, while astute investing represents the final one. Many individuals, however, hesitate to advance beyond the saving stage due to the perceived ‘risk’ associated with investing. While most advocate saving money in a bank account, I argue for a smarter alternative: saving money by purchasing gold.
Why choose gold over a traditional savings account? Here are three compelling reasons:
1. Gold’s enduring value
Traditional savings accounts typically deal in fiat currency, the value of which depends on the economic stability of a government. The inherent risk with fiat currencies, like the dollar, is their lack of tangible backing, making their value subject to volatility and even worthlessness under certain geopolitical circumstances.
In stark contrast, gold possesses a long-standing history of global acceptance as a form of currency. Regardless of where you find yourself in the world, gold retains its value, making it a practical choice as a financial asset or a medium for conversion into different currencies.
2. Gold will never become worthless
Surprising to some, keeping money in savings accounts carries inherent risks due to the persistent decrease in the purchasing power of the dollar. Over time, this has caused a significant, 316.4% cumulative inflation rate between 1916 and 2016. Conversely, the value of gold has risen by 465.3% cumulatively in the past 40 years.
Even though the price of gold can fluctuate in response to market forces, its ingrained value is unchangeable and immune to reaching zero, thanks to the cost and effort involved in its production, exploration, refinement, delivery, and security.
3. Portable wealth
Gold stands out for its portability, making it an excellent medium for preserving wealth, especially in times of global instability. Unlike bank accounts, which are public records and subject to potential governmental tracking or freezing, gold is discreet and relatively anonymous.
Holding wealth in gold makes it convenient to transport your assets from one location to another. For example, $200,000 worth of gold can be as compact as a VHS tape, unlike the same amount in cash that would require a briefcase. Regulations and potential legal issues can complicate transporting large sums of cash across borders. Thus, resorting to gold can provide a more practical and hassle-free means of wealth preservation.
These reasons convincingly illustrate why saving money with gold may indeed be a smarter choice than traditional saving methods.
