Introduction
I'm not here to tell you to invest in gold. That's not my decision to make for you, and even if I did tell you what to do with your own money, why would you listen to me?
No, I'm going to assume you're smarter than that. You don't let people tell you how to run your life...you make your own decisions. That's what this report is all about: giving you the information you need to make your own decisions about money, investing, and gold.
I'm simply here to lay it all out before you, so it's plain as the light of day. Then and only then can you make sound, wise decisions that make sense for your life.
Disclosure
Our content does not constitute financial advice. Speak to your financial advisor. We may earn money from companies reviewed. The owners of this website may be paid when you complete a form, click a link or call a phone number. The content on this website, including any positive reviews, may not be neutral or independent.
Gold and other precious metal IRAs are an investment and carry risk. Consumers should be alert to claims that customers can make a lot of money in these or any investment with little risk. As with any investment, you can lose money and past performance is not a guarantee of future performance results. Consumers should also obtain a clear understanding of the fees associated with any investment before agreeing to invest.
Our content is intended to be used for general information purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances and consult with your own investment, financial, tax and legal advisers.
What's Your Investing Personality?
Before we get into our whether you're making an investing mistake or what's lacking so far in your investing education, let's take a step back and get a good look at how things are with you.
Nobody would argue that everyone has a personality. Some of us are worriers and others are risk-takers. Some of us are social butterflies while others like lots of time alone. Now consider this: we all have "investing personalities" too.
Your investing personality determines what you do with your money. That's why there's no single investing strategy that works for everyone. You might have an uncle who convinced you that the stock market is the only way to preserve and grow your money. Your investing personality might be partly or entirely based on his influence so you're comfortable with a high degree of risk.
Someone else may have an uncle who gave financial advice, only this uncle knows about the Great Depression and, more recently, the Great Recession and therefore warns against the risks of the stock market. You may therefore have not invested a cent in stocks your entire life.
Without arguing for or against either strategy, we can simply say these two very different individuals with two very different investing personalities have worked out something that works for them.
Why It's Important To Keep An Open Mind
Eventually, both people in the examples above will suffer financially because of their hard-headed, single-track investing strategies. What's important here is that to preserve your wealth and even grow it, you need to keep ahead of current events, and you also need to see the entire picture of the financial world.
The stock market is only one sector of the financial world. There should never be an "all or nothing" approach when it comes to investing in stocks...and you'll soon learn why in the pages that follow.
The key thing to remember is that the world changes. What may have been true for your uncle may no longer be the case when it comes to investing. The financial strategy you developed when you were younger, or even just a few short years ago may now be out of date and ineffective. By holding on with an iron fist to your outdated notions of what to do with your money, you may be putting your finances (not to mention your well being) in jeopardy.
What You'll Learn In This Report
Learning a few basics about how money works will go a long way towards your financial well-being. With the simple, easy to understand basic facts you're about to learn in the pages to follow, you'll realize the following benefits:
- You'll make better decisions about money
- You'll learn why traditional means of investing aren't always suitable for today's changing world
- You'll learn where to put your money so it's safe...forever
What's Wrong With the Status Quo
Stocks
Typical investment strategies will have you putting all your money in the stock market. They'll talk about the importance of diversification, which to them means investing in different types of stocks. But we all saw what happened in 2008 when the stock market crashed. Sure, it's gone up again since then but try telling that to all those people who couldn't wait 5 years for stocks to rebound.
No matter how you look at it, stocks are very risky. It may be another decade before they have such a dramatic drop in value again, but that's a short time when you're discussing your life savings and investing for the long term. We simply don't all have the resources to withstand huge stock market fluctuations.
Cash Under The Mattress
"When I was a kid, a loaf of bread cost a nickel!".
Yes, Grandpa, we all know about inflation. But have you ever thought it applied to your finances? What if Grandpa had stuffed all his hard-earned cash under a mattress instead of investing it or at least putting it in a bank where it received interest?
Maybe in 1952 he had what was then considered a whopping sum: $50,000. In today's world that's still a lot but hardly enough to brag about. That's because the value of cash decreases over the years to the point where it's a major consideration when you have a lot of it. Keeping raw cash hidden in your home means you'll be sitting on a nice fortune at first, but it will "leak" over time until it's worth way less than when you started out.
The point is: you can't simply sit on cash for the long term and expect to have it be worth much years down the road.
It Goes Deeper Than Stocks
While the problems with cash and with stocks are easy to understand and clear to see, the deeper problem of how to invest your money is harder to wrap your head around.
The problem is something called "fiat money". It's the underlying system on which our US monetary system is based, and how it simply can't be propped up very much longer. Believe it or not, this has a great impact on your own finances and should determine how you choose to invest your money. Once you learn about fiat money, you'll change your investing strategy forever, based on the surprising facts you're about to learn.
Fiat Money
What Is Fiat Money?
Remember when you were a kid, and your mom or dad told you to do something you really didn't feel like doing? Being the naturally inquisitive kid that you were, you would ask, "but why do I have to?". Very often the response you got would be an explanation that may or may not have made sense to you. However, depending on how harried or exhausted your parent felt at the moment, sometimes what you got was "Because I said so!"
Well that's how fiat money works. It has value simply because the government said so. "Fiat" means "It shall be", as in "whatever we say, it shall be". When a government is as strong and credible as the US is or used to be, that works.
But when a government begins to falter or goes extremely deep into debt, things start to fall apart. Since the value of fiat money can fluctuate with supply and demand, and since it's also not backed by a physical commodity, the value of the dollar can really swing wildly in either direction.
Representative Money & The Gold Standard
It used to be that the US dollar got its value from gold. For every dollar out there, there was a tiny bit of gold in our national depository to back that up. The rest of the world simply attached the value of their currencies to our dollar, since it was based on the "gold standard".
Our paper money used to be called representative currency- our government could theoretically only create as much money as it had gold in its reserves to back it up. That meant you could take your paper money to a bank and redeem it for gold. This is called convertibility.
That all changed in 1971 when Nixon unhinged the US Dollar from the gold standard. Now most of the world uses Fiat money just like we do.
Again, since fiat money gets its value from the government that issues it, there are a number of volatile outside sources which can have great impact on the value. A solid fiat money system relies on the stability of the economy and intelligent management of the money supply by a central bank.
Is Fiat Money Doomed To Fail?
The way many economists and historians see it, fiat money is always doomed to fail. All we have to do is look at history. Historians point to fiat currency systems since the first-century Romans, every one of which has failed.
Examples From History
From ancient China to France under Louis XV and then Post-World War I Weimar Germany, there are countless examples of how fiat currency systems have failed.
More recently, we have:
- Argentina in 1932: Argentina's economy collapsed even though they were the world's eighth largest economy at the time
- Mexico in 1994: the peso dropped like a brick and cause all of Latin America to falter economically
- Now in Zimbabwe: hyperinflation is killing the economy, which was once one of the strongest in Africa
- Russia in the mid and 1990s: the Ruble fell so fast people were buying anything just to get rid of Rubles and acquire goods. Even cheap goods were better than owning Rubles.
Why Economic Downturns Are Dangerous Times For Fiat Money
When the economy gets bad, central banks get worried. The need to stimulate the economy becomes desperate so they print more money. That works temporarily but then it becomes a race to the bottom as it causes money to lose value.
Repeated stimulus will eventually lead to collapse of the currency system. Compare it to drug abuse: the first twinge is great- after that it takes more and more to just feel anything.
Some believe that investors are the key to bolstering the dollar. They'll eventually demand something be done to protect their investments. That "something" is backing up the fiat currency with gold or some other assets like silver.
That's when central banks start stocking up on gold. They're preparing for the day of reckoning, when they'll be called upon to prove that we're still a strong country. How will they do this? By proving that our currency is backed by gold.
The Special Problems of the US Dollar
The US in particular is in trouble with its fiat currency, the US Dollar. We are now the world's biggest debtor nation. Our currency used to be so stable, it was coveted around the world like gold, preferred to other world currencies which were less stable. In fact, it used to be that investors and central banks would stock up on dollars, like gold!
The world has loved dollars for decades now, and we've enjoyed the benefits for almost twenty years now. It's allowed us to borrow, borrow, and borrow some more, as nations who loved our stable dollar extended credit to our government with hardly any questions asked.
Remember in the early 2000's, when it was virtually impossible to get turned down for a mortgage? Those were heady days, and most of us couldn't help but borrow at least a little bit to finance lifestyles we never imagined possible. Some of us borrowed a LOT, unable to resist the prospect of easy money and prodded by unscrupulous lenders who did everything they could to tempt us all with slick advertising of super low rate mortgages and "no money down" plans.
Well it's been the same for our federal government...only it's been going on for twenty years!. We've borrowed so heavily some fear we'll lose control of our country.
And who have we been borrowing from? Japan, China, and Europe. We've borrowed to the tune of $800 billion per year. How does this work? We buy electronics from China, cars from Japan, and luxury goods from Europe. They buy US bonds from us.
What happens when they stop the credit lines? Or worse yet, what happens if they suddenly recall these loans? The US can't possibly pay them back any time soon. If our government even tries to pay back a little bit, they'll do it by raising taxes and we'll all suffer.
When Japan, China and Europe decide that the US dollar is no longer a very good investment and they stop buying US bonds and other US assets, we're all in trouble.
In fact, it's already happening. Foreign governments are starting to buy Euros or gold instead of our bonds, and guess what happens then?
The value of the US dollar begins to fall.
We've seen it happening already: the value of the US Dollar has been dropping for 30 years now. Of course there are occasional blips on the screen when the economy experiences a slight upsurge (when the economy is robust, that's good news for the strength of a fiat currency).
Most Americans don't even realize how bad the decline of the dollar has been over the past three decades.
What Choices Are Left?
Buy Things That Hold Value
You could invest in things that hold their value over time. These would be collectible things like:
- Art
- Real estate
- Fancy or classic cars
- Jewelry
The problem with collectors' items is that you have to be an expert appraiser and take a lot of risks. You have to know what has value and what's going to keep its value. Pretty tough to do, and even the experts get it wrong sometimes.
Precious Metals
But gold is gold no matter who you are, where you live, and what year it is...there's no fluctuation based on trends, like there is with collector's items. And it's worldwide. Unless your art is something with global recognition like a Monet, chances are the market for your precious commodity investment might have limited scope.
The Everlasting Value of Precious Metals
The Test of Time
As far back as anthropologists can go in time, people have always valued gold. You could almost say it's in our DNA. Ancient people noticed it doesn't corrode and it's simply gorgeous. People have been mining gold for at least seven thousand years and the value holds steady.
Global
And it's not only European culture and its derivatives that value gold. The Egyptians in 5000 BC used gold for jewelry. Ancient South Americans used it too.
Stats
If you look at the past 50 years, gold has gone up in price from under $100 per troy ounce to around $1200 per troy ounce. In fact, it's been on a rising trend since 1900, when we first started keeping these kinds of records.
Conclusion: The Investing Mistake You Don't Know You're Making
You've probably guessed what it is by now, but if you don't have some gold in your investment portfolio, you're making a mistake.
Everything points to the ultimate stability of gold- governments can't print more of it because it's found in limited supply. The price is not going to fluctuate due to inflation, so the value is very stable.
Compare that to the fiat money system where at any given moment the dollars you hold can spiral downward in value. Remember our little history lesson on how this has happened time and time again in history. Remember our political outlook and the changing financial situation of the US (not for the better). Think about the future and gold suddenly seems the wisest investment choice.
We agree with financial advisers, however: you never want to put all your money in one place. Gold is a good place to put some of your savings and how much you invest will be up to you and your investing personality.
But the facts remain: fiat money is unstable, gold isn't. Therefore, the one mistake is not including this stable commodity in your investment strategy.
If you think there's room for gold in your investing strategy, and you want to secure your future and that of your children, take a look at the companies we list below and request your free gold IRA investment kits.
