Gold has been a part of human history since the beginning of time. For centuries, from pharaohs to kings, gold has been associated with prestige, power, wealth and freedom. If you don’t know much about this yellow precious metal, reading this information will be a great place to start.
So why do I say that gold is insurance in times of crisis? Well, before we start getting into the nitty-gritty, I have a question for you; Have you ever had an insurance policy? If not, I figure you’ve at least heard of insurance before and have a basic understanding of what it is. If you don’t, Investopedia, one of the leading online financial education resources, defines insurance as: “A contract, represented by a policy, in which a person or entity receives financial protection or reimbursement for losses from an insurance company. Insurance Policies are used to coverage against the risk of financial loss.” Well, THAT was insurance jargon, so to make this easier to understand, I’ll give you a breakdown of laymen’s terms; insurance is simply a promise to protect something in the event of a loss. suffer some form of As a quick note, if you’d like to learn more about some valuable and important basic insurance products, read my article “4 Pillars of Protection: Products to Consider in Your Insurance Portfolio.”
With that said, let me explain why gold is insurance in times of crisis.
During the time of this writing, our world is experiencing a global pandemic called Coronavirus golden disease COVID-19. It has stopped almost all regular daily activity, leaving a large population of North America, and the world, unable to work and confined to self-isolation at home. When I first heard about this disease, it was in late December 2019. At the time, an ounce of gold cost approximately $1,515 USD. Then, a few months after the virus picked up speed around the world, the value of gold peaked at $1,700 USD in March 2020 and then fell back to roughly $1,650 USD at the time of writing. It is not uncommon for gold to go up and down moderately in the short term; however, in the long term, the trend has always been up.
I have often told clients that insurance is something you get but hope you never need it. Well, in the same way, it is always good to have gold because during times of crisis, people who have gold have the option to liquidate some of their gold assets to get some cash. And this is the reason why gold is insurance not only in times of crisis, but also over time.
Let me explain what I mean with an example based on inflation. Using a US inflation calculator, I determined that what would have cost $288.50 in 2000 is $433.38 today, resulting in 50.2% inflation. This means your money LOST over fifty percent of its purchasing power because you now need MORE of your dollars to buy the same thing! In contrast, at the beginning of the same year, on January 3, 2000, an ounce of gold valued at the same $288.50; however, on the first trading day of this year (January 6, 2020), that same ounce of gold was valued at $1,558.00!* Had I known the power of this yellow metal and simply “parked” $288.50 in an ounce of gold over that 20-year period, the value of their assets would have grown by 440.03%! Inflation is a slow, gradual increase over time, so many people don’t realize the loss, but now that you KNOW the numbers, you don’t need to be a mathematician to conclude that 440.03% growth is better than a loss of 50.2%.
So if you had to choose a savings vehicle, which would you prefer: cash or gold? The bottom line is this: When you save gold, you protect your long-term future purchasing power, but when you save cash, your purchasing power constantly leaks and you fight a losing battle against inflation.
If you haven’t been saving gold up to this point, rest assured that it’s not too late to start and all is not lost. The good news is that now you know. And you may have heard the saying before that KNOWLEDGE IS POWER. Well, I believe that the APPLICATION of knowledge is power because, if you know something but do nothing, what is the use of knowing? If you want to start applying your knowledge, check out my FREE report, “The Truth About Money: 3 Quick Key Facts You Might Not Know!” and let’s continue your journey to knowledge and application. To get it now, click here!
