A True Gold Story

Back in 2000, I was living in Chiang Mai, Thailand and running a small restaurant. One of my regular customers was a British early retiree living off an inheritance from his mother. Paul used to come in fairly regularly, always wearing one or two thick, gold chains with large medallions. He liked to brag a bit about how much gold he had, simply because he loved buying it. He also wanted to be known as ‘The Gold Man’. The last time we spoke he said he had 12 kilos of gold. I was not particularly impressed by or envious of his relative wealth and put it down to the eccentricity of many Asian expats! However it has since made me think, mainly because now I believe in gold more than I do in paper currency with nothing to back it.

In early 2000 gold was about $250 an ounce or $8,000 per kilo, so Paul’s personal ‘hoard’ was worth about $100,000. I’ve since lost touch and he may have bought even more, but anyone who had 12 kilos (26 pounds) of gold today is sitting on over $500,000 – half a million bucks!

I calculatedthat this equates roughly to a return of 17.5% p.a. tax-free (with no risk assuming he kept it in a safe deposit box). This would have been difficult if not impossible to achieve in the light of low interest rates over the past few years. He could have invested in real estate or invested the $100,000 in stocks and shares, but there would be no guarantee he wouldn’t have lost a good portion of his wealth one way or another.

Fast forward 10 years from now to 2020. If you invested $100,000 (maybe just 10% of your portfolio or million dollar retirement fund) in gold bullion today – at over $1,300 an ounce or $42,000 per kg – it will only buy about  2.5 kilos, but if prices keep rising as they have for the past twenty years, you will have half a million or more dollars in 10 years time, too. It’s pointless to say that gold is too expensive today, as the future potential gain is the same. Actually it’s probably a lot higher. The point is it’s almost certain that the price will not drop, except temporarily, and that is an opportunity to buy more at a slightly better price.

I began buying gold a little over 3 years ago, and I only have a small amount, but I’m very pleased I have it. I don’t wear it round my neck or even keep it at the bank. I use BullionVault and I’m writing another post that explains why I think it’s the safest way to hold gold and silver bullion for future wealth protection. I’m doing this because although it’s quite easy to confirm that this is no scam operation, there seem to be quite a few people worried that it might be and search Google every day on this very topic.

In the meantime, you can visit the Scams and Bullion pages on the Retire-Asia.com website.

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