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One of my best friends recently discovered, to his
shock and dismay, that five one-ounce gold coins had been stolen from his
home. I feel especially bad because I had encouraged him to buy some physical
metal, giving him some tips and pointing him to the better dealers.
What’s especially disconcerting about the theft is that my friend had
the coins stored in a safe, hidden from view, securely locked, with the key
hidden. He thought his gold was safe, a reasonable assumption given the
precautions he’d taken.
But all those measures weren’t enough. Based on what he knows, he
strongly suspects it was a relative, partly because of this person’s
background and partly because they were one of few familiar enough with the
house to know where the key might be. The police unfortunately don’t
have enough evidence to make an arrest – fingerprints, for one,
couldn’t be successfully lifted from the safe.
My friend was in shock for several days. While it didn’t represent all
the gold he owned, it’s not insignificant; with gold at $1,400/ounce,
that’s seven grand the thief made off with. He’s further
consternated by how it went down; the robber only took part of his stash,
evidently to make it look like his gold hadn’t been disturbed. The key
had also been put back in its place, and for this reason he can’t
pinpoint a specific time period the coins were stolen.
The cost to him has been more than monetary; he loved his bullion coins and
had collected at least one from almost every country that produces them. He
told me he occasionally took them out of the safe because they were, in his
words, “beautiful… and I just loved the weight of them in my
hand.” His stash was starting to build up to a point where he had
enough “savings” for almost any emergency. The pain deepened
further when he learned that thanks to current IRS rules, he can’t even
write off the loss. (He’s forgoing a homeowner’s claim, given the
industry’s reputation for dropping customers for making “small”
claims.)
Needless to say, my friend is no longer storing his gold (and silver) in that
safe. He’s the kind that would normally shy away from using a bank safe
deposit box, but not anymore. Even with that, though, he knew this method
wasn’t perfect and so explored all his options. He’s decided to
follow the suggestion I outline at the end.
After the dust settled, he told me that yes, he felt violated; yes,
he’s still angry; and yes, it’s made him suspicious of others
around him, a feeling he hates. “But what I suddenly realized,”
he said, “was how valuable gold is becoming again. It’s not a
‘barbarous relic’ anymore… it’s not a pretty coin or
a hunk of metal or a commodity or even an investment. It really is money, and
it’s scary to think how dicey things might get when everyone
sees gold as money again.”
My friend is not poor; there were other valuables the thief could’ve
snatched. He took the gold.
So what about you? How safe is your safe? Are your clever hiding spots clever
enough?
Here’s a quick checklist of the three most common places to store your
gold. My friend overlooked one of the basic rules of home storage, so I hope
you’ll review where and how you store your precious metals so that you
can avoid the same pain and loss he experienced…
Safe deposit box
The easiest and simplest way to store gold is in a safe deposit box at your
local bank. If you go this route, use a local bank. You want to be able to
get to your gold in an emergency, which is one of the reasons you own it in
the first place. So don’t keep it in a different state or a distant
city. Keep it close.
However, as my friend acknowledges, a safe deposit box isn’t perfect.
First, your access is restricted; you can only get to the gold during regular
banking hours. Second, safe deposit boxes are not insured against robbery.
And last, a bank box compromises your privacy. It provides a generous clue
for the government, in case it ever decides to repeat FDR’s 1933
confiscation of gold.
A related option would be to use a depository or private vault. They’re
outside of the financial system, though they tend to be on the expensive
side. And they’re not plentiful, so you may not live near one.
Bury it
This is where the term “midnight gardening” comes from; people
bury their gold at night so others won’t notice the digging. The
alternative is to find a separate reason for the excavation, such as fixing a
pipe or removing a stump, and work in the daylight.
Either way, before those of you who are used to clean fingernails pass on
this method, consider its advantages: it won’t be damaged in a fire,
and a burglar would need to know where to dig. A lot can happen in the world
that won’t disturb buried gold.
A few practicalities, if you decide to go the shovel route. First, use the
right container, something airtight and waterproof. This is especially
important if you are storing numismatics or are burying silver in any form.
We’ve been told those water bottles that hikers use work pretty well,
but choose one heavy enough to stand up to years of erosion and persistent
insects. Another choice is a small section of PVC pipe from your local
hardware store; cap the ends and then bury it in a shallow puddle of cement.
Don’t use a coffee can, since the color on the
metal can bleed. To protect from scratching, put each coin in a plastic
baggie or something similar.
Where do you bury it? Your location should be neither too easy nor too
difficult to find. Not too easy, so that the gold won’t be found by a
thief. But not so difficult that years later, you or
your heirs have trouble locating it. Complicated instructions (including
treasure maps) can get muddled with time and create the risk your gold will
never be dug up.
Find a place, on property you own, that you’ll always remember but that
isn’t obvious if someone learns you’ve buried something valuable.
Keep in mind that most modern metal detectors can operate to a depth of about
4 feet for objects as large as a stash of coins or bars. There’s also
ground-penetrating radar, used primarily by forensic investigators,
that can detect where digging has occurred, as well as satellites that
can pinpoint where ground has been disturbed.
Hide it in your house and/or use a home safe
Indoor storage is practical for smaller quantities. You can probably think of
dozens of places in your home where no one would think to look. Avoid any
place obvious, such as a jewelry box or cookie jar. The disadvantage of this
method is exposure to, as my friend can tell you, theft, along with fire,
flood, and other natural disasters.
Consider using a safe, ideally one secured to the floor. As one dealer said,
“A safe can be brought in on a two-wheeler and taken out on a
two-wheeler, if it hasn’t been attached to a building or at least
hidden.” I’ve heard good things about Liberty safes, and they
have a replacement guarantee. For obvious reasons, my friend is now gun-shy
about using a safe with a key lock.
If you use a floor safe, locations for it include the garage, under a
refrigerator, or anywhere you can place something over it. Another option
might be under the floor of a storage or garden shed; you can both
install and access it without being seen, day or night. We recommend
installing it yourself, and some of the kits make it easier than you it might
expect. We wouldn’t hire a contractor.
Before you buy a safe, however, I recommend reading this article from a
veteran bullion collector: How Safe Are Safes? (If you
can’t log in because you’re not a BIG GOLD subscriber, why not
try it today risk-free for only $79 per year? Details here.)
Leave the right trail
However you store your gold, let exactly one person
know the details. It needs to be someone in whose honesty and discretion you
have complete confidence. It will be that person’s job to access the
gold if you are incapacitated or die. If you are using a safe deposit box, his
or her name should be included in the box registration, and they should know
where to go to get the key.
Tell one person, but only one. No one else should know. This is
especially important if you’re using home storage. You don’t want
to come home someday to find your house turned upside down because someone
heard you’re living in a treasure chest. Even worse would be to come
home and find a looter waiting to have a chat with you. My friend kept quiet
about his gold, but admitted some family knew about it. That’s all it
took.
There’s just no other way to say it: Keep quiet about your gold.
Unless you’ve reached a point in life where you are depending on your
children for help with your affairs, a child is not a good choice as your
gold storage confidant. Kids talk, and you don’t know whom they might
tell or how far the story might travel.
But you do need to tell someone, regardless of your storage method. I
heard of an old miner who – no kidding – left a treasure map for
his kids, to help them figure out where he’d hidden his gold. But
someone else found the map – and his kids never got their inheritance.
And what if the kids had received the map but weren’t very good
treasure hunters? I’ve read similar stories about descendants who knew
that gold had been left for them but had no idea where it was.
What if more than one person already knows you have gold? Review your home
storage methods to be absolutely sure they are adequate, or use one of the
other methods.
So what’s the best place to store your physical gold? Well, your
choices boil down to three: store your gold in a safe deposit box, bury it,
or hide it indoors. Each method has pluses and minuses, but probably the best
method is a combination of them all. In other words, diversify your storage
locations. My friend could’ve been wiped out if the robber
hadn’t been trying to be sneaky.
Last, don’t let this scare you off from buying bullion. It’s
still the asset that offers the best monetary protection for the foreseeable
future. Not owning it may leave you feeling robbed when you go to use your
paper dollars and find they won’t buy you as much as you thought.
That’s not a theft you can prevent – unless you own gold.
[Today
it is more important than ever to allocate some of your portfolio to gold and
silver. Right now China, Russia and other countries are plotting to dump the
U.S. dollar – and they have started to hoard gold in never-before-seen
amounts. Don’t wait until it’s too late to jump on the runaway
gold train… watch this free video for more information.]
Jeff Clark
BIG GOLD
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