Gold is considered to be the best as well as the most precious metal of all time. It is also said to be the universal metal therefore one can exchange cash for gold, and vice versa anywhere across the globe. Gold is mainly known for jewellery however it can also be a valuable method to protect your money at times of both personal and global financial emergency.
Gold can benefit people by holding a small amount until a time when money is needed in an emergency, then, you can exchange the gold and get cash in order to meet financial requirements. This is what we call a common security measure, and it is mostly used by the population in the form of gold jewellery.
However, investing in gold is something that can be expanded further, and is considered to be the wise choice in order to protect oneself not only from a financial crisis, but from the rising cost of living and money inflation too. Gold’s value increases as the cost of living goes up, basically what happens is golds value stays the same, other prices increase due to money supply expanding, and the cost of living goes up because more money is available in the system.
In comparison, the amount of gold in existence grows minimally each year, meaning that the rarity of gold remains about the same year on year, and due to this rarity, the demand is stable, and the price people pay becomes more as the money supply expands.
Gold is often considered an investment to ‘set and forget’. Purchase gold, store it securely, and forget about it, until such time as money is needed in future. When it is needed will depend upon how much gold you have, if you start with maybe $1500 worth of gold, then you would want to sell it at a time when money is desperate. If you hold more gold, say $10,000 worth, you may wish to sell it in 10 years time, where the value would become expectedly worth a minimum of $15,000 or possibly even more.
Why do people exchange cash for gold?
Holding cash is not a good idea for the long term, each year the money supply globally increases, and this increase in money supply means the $100 you have today, will next year only purchase as much as $95 did the year before, over time the value of cash erodes, this is why people prefer to keep their money in the form of property, invest in shares, or other physical or virtual securities such as the stock market, rare cars, or collectables.
Gold however is a more secure long term investment, and historically, gold has performed better than any other investment when held for a decade or longer.
When it comes time to sell your gold however, there are a few things you should consider:
- The pawnbroker shop or the jewellery shop which you have chosen to sell your gold should have a good reputation, and you should know the value of your gold before approaching any of these stores, to make sure you are not ripped off or cheated by any one.
- Another important thing to consider is keeping track of the price you originally paid for your gold, and the value at the time of sale, this will ensure you do not sell at a loss, while a loss after 10 years is uncommon, selling earlier should be checked.
This will help in making your gold more profitable. Apart from this, as everyone has noticed in recent times, what our dollar buys is constantly decreasing rapidly, investing in gold is the wise thing to do compared to other forms of investing like building / property or shares, bonds or securities.
Thus, only gold investment will keep your money profitable and is a hassle free investment.