Understanding Savings vs. Investing
The idea of saving involves preserving and building resources for future use. Investing incorporates a variety of activities that take existing resources and assets, makes them available for others to use, and in return the investor is potentially paid a profit or interest on the return of those assets. These two are often mixed up when people use either word generically, but they are very, very different, with very unique and different outcomes.
When you save money it’s in the form of cash. This is the most liquid form of resources that you can universally exchange with others, businesses, government, and individuals. As you build your savings, your ability to handle larger and larger transactions in the future become available. Yes, you might receive some nominal interest in a bank account, but it’s not an investment per se or a big addition to your holdings in most cases.
An investment literally gives the value of your cash to someone else in exchange for a holding or title. In each of these cases your money is handed over to another party, and in exchange you get something of like value that comes with either a promise or growth or an opportunity. This is important to note. A government bond, for example, is a promise to pay back your money with a bonus. A stock is an opportunity to enjoy a company profit, if it occurs in the future. It might not and you could lose everything instead amid the chaos, just like markets during COVID-19.
Gold is unique, however, as a way to save money and investment in one. It is a tradeable asset as well as an opportunity to grow worth and gain additional value. This is why gold is one of the most important assets to gain and build your portfolio with. To find out more, visit our MyGold website, or in person at our store in the centre of Auckland’s business district. We’re just meters from the Sky Casino and Auckland Sky Tower and easy to find.
Gold versus Saving Cash
Smart investors who’ve learned through experience the ups and downs of the markets regularly advise having a portion of a portfolio in cash form. It allows for quick decision-making, to make changes quickly, and an ability to jump on opportunities as well as have liquidity during uncertainty. There is one hitch to this thinking – it relies on a currency tool that is under the control of a government and the banking system. And that means cash is totally at risk of seizure, devaluation, and manipulation by the government during emergencies. That’s definitely not a situation that works in the interest of the individual.
We’ve all been taught for years to save money as a good thing. Build up reserves for unexpected needs as well as long-term goals. A car, home, education, vacations, and retirement all fall into this basket justifying cash savings in banks. However, time and again, savings have been put at risk and compromised by government collapse or instability. Just look at what happened to savers only a few years ago in Greece and Iceland when their national banks collapsed. Even in the U.S. banks close and savers are put at risk with only $250,000 per account protected by the federal government.
Gold, however, is not controlled or influenced by the government. Its value is universal and unrestricted. As a result, the precious metal provides a serious haven for personal worth that can’t be devalued through a regulatory trick or government COVID-19 decision in the middle of the night. Even in uncertain times, gold has proven repeatedly to be a dependable protection of personal worth, providing financial power when everything else falls apart. Educate yourself at MyGold online or visit us in person. We are 200 meters from Sky Casino at the Auckland Sky Tower, right in the heart of Auckland’s business district.
Your 2020 Approach to Precious Metal Investing
Here are some usable, practical tips for going into precious metal investing, especially now during COVID-19 uncertain times:
- Stick with the basics – Only invest in gold and silver. Don’t fiddle with the exotic weird stuff. Gold and silver are universally accepted no matter where you go
- Control your asset – Don’t use proxy investing. Have a direct ownership of your gold or silver versus through an ETF, stock, company, or pool title
- Stick with the bullion – Don’t fuss with jewellery or weird applications. Use government bullion coins and bars easily recognized, evaluated, and rated for their weight and purity
- Aggregate – Build your holdings over time consistently. This is far more effective and faster than trying to do everything in one financial move
- Buy with cash – Don’t borrow to invest in metals. You’re just creating more loss. Use your direct cash and be obligation-free
- Use multiple storage sites – Don’t keep all your gold or silver in one spot. Use multiple locations for storage for better protection and contingencies
- Stay out of the banks – Do not put your bullion in a deposit box. Banks can and will crack these open and seize the metal on government order amid the chaos
- Stay legal – When you sell make sure you report your profits for taxes. Don’t buy under the table or in weird channels. Document your buys and sells for a clean history record if audited
- Think long term – Do not use precious metals for day-trading or short-term wins. Anticipate a five-year holding or longer
Our goal at MyGold online and in person is to educate investors amid the chaos and help understand the future of gold in uncertain times. Visit our web page for more tips or see us in person in the heart of Auckland’s business district. We’re just 200 meters from the Auckland Sky Tower and Auckland’s Central Business District, easy to find.