Think about risk, and why people started buying diversified assets in the first place.
The modern financial system will sell you 100 ETFs that cover thousands of assets, but they all exist within the financial system. There aren’t many assets that actually exist outside of the global fiat financial system, but gold is one you can buy in a tax-deferred IRA.
People like things to be easy, and retirement investment is no different. Unfortunately, easy investing isn’t always safe, as so many financial crises in recent years demonstrate. It is easy to deride gold, after all, it isn’t a hot tech stock, or an interest-bearing asset.
However, gold does one thing extremely well: maintain buying power. Check out Expert-reviewed gold IRA companies.
Go back 50 years, to 1973 – gold was trading for less than $100/oz when the year began. While the S&P 500 appears to gain value over time, remember that the companies that comprise the index have changed radically over the decades.
Gold, on the other hand, is the same yellow metal it has been since the dawn of human history,
Risks exist for a reason
Why do so many investors keep a double digit percentage of their wealth in gold?
The same reason why the rich make money in art and real-estate – they know something that most retail investors don’t. The secret: money is a product, and the monetary system has owners. Money isn’t like the sunrise or waves in the ocean, it is an artificial construct.
Central banks make money, in the same way a factory makes car tires. The difference is that most people take money’s value for granted, at least until they experience hyperinflation, which is more common than you might think.
The American War in Vietnam broke the post-WW2 US dollar’s gold backing. That is the same reason why gold tends to rise in value when there is a major war. Governments print and spend money, overall production tends to go down, so there is more money chasing less goods.
In other words – inflation.
No one wants to think about escalating war, but your investments don’t care. They will be impacted by bad macro decisions whether or not you choose to see the risks at hand.
Tax-free gold!
Well, a gold IRA isn’t really tax free – but your money will be safe from taxes until you decide to retire. Unlike many gold investments, a gold IRA will allow you to save for decades in physical gold, so when it comes time to stop working, you know that your portfolio will have something of value.
A gold IRA does take more planning than a normal IRA filled with paper assets like stocks and bonds, but many investors think it is well worth the effort. While you will need to pay for storage and logistics, you won’t be paying any taxes for a long time, which makes gold IRAs a great option.
Gold is the same asset it has always been, and one look at how popular it still is globally lets you know it will still have value when you are old, and long after.
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