Gold is, and for thousands of years has been, the focal point
for many prominent savers of wealth. The European aristocrats, the Middle
East oil barons, the ultra-rich, and even the central banks, all save in gold
to preserve generational wealth. They save in gold without thinking about the
return in currency terms because they understand the fundamental principle of
gold as a generational and long-term store of value. They understand that
gold is not an investment but that its a form of money that cannot be printed
or controlled by central bankers.
As the world's financial and monetary systems become
increasing fragile, saving in gold is the ultimate safe haven for protecting
you against a systemic collapse. In the inevitable transition that will
follow such a collapse, holding gold as wealth is the ultimate strategy for
survival.
Prudent savers understand that gold cements wealth over
time which is why you do not need to care much about the ‘gold price’ as
denominated in fiat currencies.
If you do not want to bear the high risk associated with
chasing returns on the currency markets, you should save in physical gold
because gold is the safest form of liquid money. Staying liquid is the same
as keeping your wealth in gold. There is nothing wrong with investing, but
buying physical gold is not an investment in the real sense – it is a
timeless wealth-preserving asset.
When fiat currencies crash, your gold will become a truly
priceless asset that will empower you through the transition.
Gold as Wealth
If you are trapped in relentlessly chasing paper profits while
worrying about your positions, it is time to consider a shift of mind-set. To
become a saver, you have to shift your focus from profit-seeking to
sustainability, from chasing egoistic personal highs to becoming a family
provider for generational wealth.
With a mind-set of viewing gold as a savings asset, you will
not only solidify your own wealth but have the power to pass on your wealth
to the next generation. This has been the case for many European aristocrats
who were able to pass on wealth from generation to generation.
As we can appreciate from history, cash is not king
when the cash is not backed by anything. In fact, the world’s fiat paper
currencies have all lost 99% or more of their value in the last century.
Gold is the safest and most stable store of value known to
man. No other asset class comes close to gold in terms of stability over
history. Gold is not an investment per se. Gold is money. Gold is savings.
Gold is wealth.
If you have the mind-set of a saver and want to minimise your
risk, it is actually natural to keep most of your savings in gold. If you are
unable to determine a favourable risk-reward ratio for any of your potential
investments, you might even consider keeping close to 100% of your savings in
gold. It is certainly better to keep 100% of one’s savings in gold than
keeping one’s savings in the form of constantly depreciating fiat currencies.
Ask yourself, are you buying gold as a means of generating fiat currency
returns or are you acquiring currency as a means to buy gold (as wealth). We
much recommend the latter.
Work and invest to acquire currency but hold your wealth in
gold. This is the fool-proof strategy that has worked for thousands of years.
Saving in gold frees your mind. With gold, you can sleep well
at night and do not need to worry about inflation, financial markets and
currency risks. By saving in gold you can stand strong and avoid the flawed
western mentality of chasing paper money returns.
Investing in Gold
If gold is viewed from a western investment portfolio
perspective, studies have shown that the gold price is inversely correlated
with the prices of most other financial assets. Adding gold into an existing
investment portfolio can therefore lower portfolio risk. This use of gold as
a risk-reducing strategic asset class has been empirically validated by
numerous studies (such as studies by the World Gold Council), and from the
perspectives of different classes of portfolios, different investor
backgrounds, and varying base currencies. Optimal allocations of gold in
multi-asset portfolios by these empirical studies are usually found to be in
the 5 - 20% range.
The reason that there is a negative correlation between the
gold price and other asset prices is due to the gold price not being as
dependent on economic and business cycles as most other financial asset or
commodity prices. Therefore, the gold price does not react to events in the
same way as the prices of most other asset prices react.
However, we advice you to view gold as savings/wealth rather
than as an investment. Gold has the power to change your life for the
better. It can give you peace of mind like nothing else if you just let it
sit there without worrying about it.
