Gold has been part of human history since the dawn 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 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 held an insurance policy? If not, I imagine you have at least heard of insurance before and have a basic understanding of what it is. If you don’t, Investopedia, one of the best online financial education resources, defines insurance as “a contract, represented by a policy, in which a person or entity receives financial or reimbursement against losses from an insurance company.Insurance.policies are used to hedge against the risk of financial loss.” OK, so that was insurance jargon, so to make it easier to understand, I’ll give you my layman’s term; insurance is simply a promise to protect something in the event of suffering in one form or another In short, if you would like to know more about some basic insurance products that are valuable and important, read my article “4 pillars of protection: products to consider in your insurance portfolio. assurance”.
That said, let me explain why gold is insurance in times of crisis.
As of this writing, our world is experiencing a global pandemic called the corona virus illness or COVID-19. It has halted almost all regular daily activities, leaving a large population of North America, and the world for that matter, unable to work and confined to self-isolation at home. When I first heard about this disease, it was at the end of December 2019. At that time, an ounce of gold was worth around 1515 USD. Then, a few months after the virus accelerated around the world, the value of gold peaked at $1,700 in March 2020 and then fell back to around $1,650 at the time of this writing. It’s not unusual for gold to dance slightly up and down in the short term, but in the long term the trend has always been up.
I’ve often told clients that insurance is something you get, but hopefully you never need it. Well, in the same way, gold is always good to have because in times of crisis, people who have gold have the option of liquidating some of their gold assets in order to get their hands on gold. money. And that is why gold is insurance not only in times of crisis, but also over time.
Let me explain what I mean using an example based on inflation. Using a US inflation calculator, I determined that what would have cost $288.50 in the year 2000 costs $433.38 today, giving an inflation of 50.2% . This means your money has LOST more than fifty percent purchasing power because now you need MORE dollars to buy the same thing! Conversely, at the beginning of the same year, on January 3, 2000, an ounce of gold was worth the same $288.50, but on the first trading day of that year (January 6, 2020), that same ounce of gold was worth 1 $558.00. !* If you had known the power of this yellow metal and had simply “parked” $288.50 in an ounce of gold over this 20-year period, the value of your asset would have increased by 440.03%! Inflation is a slow, gradual increase over time that’s why so many people don’t realize the loss but now that you KNOW the numbers you don’t have to be a mathematician to conclude that a growth of 440.03% is better than a loss of 50.2%.
So, if you had to choose a savings vehicle, which would you prefer: silver or gold? The fact is, when you save gold, you protect your future long-term purchasing power, but when you save money, your purchasing power is constantly leaking and fighting a losing battle against the inflation.
If you haven’t saved up any gold so far, rest assured that it’s not too late to start and all is not lost. The good news is you know now. And you may have heard the saying before that KNOWLEDGE IS POWER. Well, I believe that the APPLYING of knowledge is power because if you know something but do nothing, what good is knowing? If you want to start applying your knowledge more, check out my FREE report, “The Truth About Money – 3 Key Facts You May Not Know!” and continue your journey of knowledge and application. To get it now, Click here!