The Turtle Buys Gold

I know that paper money always ends up worth less (because of politicians’ tendency to inflate) or worthless (because of politicians tendency to do the same thing expecting different results), but no matter how bold the writing on the wall, or perhaps because it is so bold, I have had a hard time getting myself to buy gold.

As I move forward on the exciting challenge of wealth building, I feel the tug of urgency. I feel, as I know many feel, that economic disaster is near. The house of cards could continue to be propped up by “quantitative easing” (or, theft by bookkeeping), and certainly could be distracted by another major war, but what is certain is that at some point this mess has to be cleaned up… and I don’t want to be the mop.

Even in a perfect world I would want to improve my position, but in the present one I believe it is a matter of survival. I believe those who cling to the way the world works (or rather, doesn’t) today are going be unpleasantly surprised of their fates.

But what does this all have to do with gold? I am eager to build wealth as quick as possible. Intuitively, that leads me towards the world of investing and speculating. The idea of compounding wealth by finding great buys is magnified by a larger seed. Any cash or hard assets like gold rob from the potential future gains of investments and speculations. It is tempting to go “all in.”

I’m certain you can see the emotional psychology at play here. It bears emphasis that this is the inner-turmoil that can take over “in the moment” and risk taking all the wealth in the room with it.

I am constantly fighting the urge to pile money into investments and speculations, but it is better to be the turtle than the hare. So no matter what, 20 percent is set aside for gold.

It is simple. Gold is money. It has proved a good store of value for thousands of years. Paper money can become worthless overnight, ask the Germans and the Zimbabweans, and a company can go bankrupt just as quickly. But gold will always be worth something. Silver is good too, though it is historically far more volatile, and not as practical for larger amounts. 20 percent is set aside to purchase gold for long-term.

The three easiest ways to buy gold (I do all three) are:

  1. Physical bullion. Physical bullion is a must have. I like coins best but bars work too. There is the obvious challenge of secure storage.
  2. Gold holdings. Gold companies like GoldMoney and Hard Asset Alliance are easy ways to purchase gold and have it stored remotely. The benefit of these is the ability to store the gold you purchase in vaults in a different country, for diversification. You can easily sell and convert to cash, or take physical delivery in the future.
  3. Gold funds. Funds like the Central Fund of Canada (CEF) and SPDR Gold Shares (GLD) are convenient ways to buy with a personal or retirement stock account. I like CEF because it holds gold and silver, and is a closed-end fund so you can easily monitor its net-asset value (and sometimes purchase at a discount, see here)

(I recommend reading Casey Research’s free 2014 Gold Investor’s Guide for more excellent advice on buying gold)