We all know that we should save money every month, but should you save your money in gold or not? And how to save in gold? These are the questions that I want to answer with this post.
If you are just interested in reading about How to save in gold then you can just jump down to the second heading below, or click here.
I want to spend a little time first talking about Why you should save your money in gold instead of say under the mattress or in a regular savings account at your bank.
Why should you save in gold?
There’s a lot of reasons for why you should invest in gold but here I will try and tell you in short about why you should save your hard earned money in physical gold and not in paper currency under the mattress or in a bank savings account.
First, I want to define what I mean with save. Saving is not when you set aside some money every month in a mutual fund or something like that. That is investing, meaning that you are speculating on the markets and all of your money can technically disappear tomorrow.
With savings I mean something with no, or small amount of risk. For example, if your save your money in paper currency under the mattress the only way really that you could loose your savings is if you got robbed or in a fire or something like that. You won’t loose that money because you did a bad investment on the market. That is savings, so there is a clear difference between saving and investing.
The way I see it you have 3 different ways that you can save your wealth today. This is money that you want little or no risk on, so not your investments. This is your life savings that you want to keep for another day in the future. The ways are:
- Take out cash every month and put them under the mattress (just an expression, you can put it where ever you want in your house).
- Open a savings account at your bank where you take money from your paycheck and set aside every month and don’t touch it (save it).
- Save in some commodity. Every month you buy things like gold, food, oil or something else to keep your wealth (money) in. Don’t worry if this confuses you now. We will look deeper into it in a bit.
That’s the three options that I can see today. If you know any other way to save your money every month please let me know in the comments below.
Now let’s have a look at each of these ways to save your money and see if we can come up with the best way. I’m pretty sure you can guess which one it will be already, right?
Save in cash under the mattress
The only reason I can see people doing this is because you want to stay liquid and have the cash outside of the financial system. Maybe if all the ATMs stopped working for one week it would be really nice to have a bunch of cash at home to buy your food and other necessities for.
The fact is though that your savings will get eaten up by inflation. Have you realized how much less groceries you get today for $100 compared to just 10 years ago? How much more gas did you get for $20 ten years ago compared to today?
The prices for everything that we buy today is skyrocketing. The reason why is mostly because if our crazy amount of inflation.
The prices for our goods and services will continue to rise so if you put $100 under the mattress today it will buy you less stuff (rice, gas, eggs, milk,…) in ten years compared to what it does now.
Why would you save your hard earned money in something where you know that you will loose purchasing power every year? That’s crazy if you ask me. Having some cash at home because you want to be protected in case our ATMs stop working is not saving, that’s just smart.
Save in a bank account
When you save you money in a regular bank account you will be exposed to inflation the same way as if you saved in paper under the mattress.
Today we have record low interest rates around the world on our savings accounts at the bank. Before you could get 4-5% on your savings accounts making it worth having your money in the bank. Today you get almost 0% if you account for the inflation.
Record low rates across all savings accounts – as experts predict Isa season is ‘dead’
Just like The Telegraph, and a lot of other news organizations, are saying the rates are so low across all savings accounts that having your savings in a bank account is basically the same as having your money under the mattress. Because there is no interest rate you know that your savings will loose purchasing power every year because of inflation.
At least when you save your money under the mattress you can see your wealth and you know that it’s there. At a bank savings account your wealth is just represented on a computer in 1’s and 0’s. Do you really think that the bank have all of it’s customers money (savings) in a vault somewhere?
Of course not. In fact, because of a thing called fractional reserve banking the bank is only required to have around 10% of it’s customers money in tangible assets. This means that if 10% of the banks customers wanted their money back the bank would go under, become bankrupt.
Why would you save your hard earned money in 1’s and 0’s at a bank computer that is not backed up by any real tangible assets, that gives you almost 0% in rate, and can evaporate over night in a million different ways?
Save in a commodity, like gold
Now we’ve come to the interesting part. What I mean by saving in a commodity is too save in something tangible that you can see and touch. For example you could save in eggs. The price of eggs have more than doubled the past 20 years. So your savings would have doubled if you saved in eggs, right?
But of course the eggs would go bad before 20 years so I do not suggest that you save in eggs.
As you can see below though, every commodity (or item) is going up in price today. So if you could just find something similar that keeps going up in price every year because of inflation and that didn’t go bad over a long period of time, hmm.
I think you’ve guessed it, GOLD.
Look at the graphic below that’s from Canada. If you saved your money in dollars over the past 20 years you would see a decline in purchasing power of about 50% against gas, bread and eggs.
If you instead saved you money in gold you would have seen an increase of 20-30% in your purchasing power.
This is just data from Canada but if you look at any other country in the world you will see the same statistic. As I said before, I think you’ve noticed how much loss groceries you get for $100 today than you did 10 years ago, right?
If you have data like this from your country please let me know in the comments below.
If you saved $10,000 in gold in 1975 you would have around $130,000 today! This is without you having to follow the stock market or be involved in your investment. You purchase gold and you put it aside and watch the inflation make it go up in price. Does it get better than that for a savings account?
Saving in dollars will see your purchasing power go down over time whereas saving in gold will see it go up.
Another great thing about saving in gold is that gold has held it’s value for over 5000 years.
The same gold that the Egyptians were using in trade 5000 years ago is still with us today. You can feel your gold in your hands and it will always be worth something. That’s the opposite of saving in 1’s and 0’s in a bank computer where you can’t really feel or touch your wealth.
Gold is considered a safe haven and is one of the safest investments that you can do. Isn’t that also what you want in a savings account? In 10 years from now you don’t want the possibility of your saved money to be worthless. Save in gold and you will always keep your savings, no matter what.
“The desire for gold is the most universal and deeply rooted commercial instinct of the human race.”
How can you save in gold?
Saving in gold is often said to be tough. The first answer I get is “I can’t afford it“. I can see this as a valid argument because it’s not easy to find around $1300 every month to buy an ounce of gold.
What we need is to try and buy gold in smaller denominations so that we can easily afford to purchase some gold every month or week.
Let me introduce you to Karatbars International FREE Gold savings account.
This is by far the easiest way there is to save your hard earned money in gold instead of just 1’s and 0’s in a bank account.
Karatbars let’s you set up a gold savings account completely FREE without any hidden fee’s of any kind. With Karatbars you can then easily transfer your declining paper money to physical gold bullion every week or month.
Karatbars specializes in physical gold bullion in smaller denominations, and their gold comes in either 1 gram, 2.5 grams or 5 grams.
In short how it works is that you set up your free gold savings account. After that you have two main options
- Do you want to save in gold every week or every month?
- How much money do you want to save every week/month
After that you can pay with your credit card. Depending on if you choose week or month the 1’s and 0’s (the “money”) will automatically go from your credit card into hard physical gold bullion of the highest LBMA standard.
A very important thing about Karatbars is that they actually take your money and transfer it to physical gold. I have been investing in gold for about 10 years now and I’ve seen a lot of scammers that say they will take your paper and buy gold but they don’t. Instead they just buy it as soon as you want your gold delivered.
With Karatbars they have partnered up with a third party security vault in Germany where they will store you gold, again FOR FREE. You will have your own little safety deposit box where the physical gold will be placed every week/month.
When you then want delivery of your gold they will ship the gold that is in your safety box.
Karatbars will ship to all countries in the world and it costs around $21 right now to ship internationally (little bit cheaper in Europe). The best thing is that it costs you the same to ship 1 gram as it does to ship 21 grams.
So what most people, me included, do is to save up a bunch of gold in your free safety box and then take delivery after a while. If you take delivery of 21 grams that becomes $1 per gram in shipping.
Karatbars is a big and well renowned company that specializes in making physical gold affordable for everybody. They are based out of Germany and are operating under strict German business laws.
As I’ve said before it’s completely FREE and you can save as little as $50 a month. And when you think about it. You haven’t really bought anything. What you do is transfer your 1’s and 0’s or paper from your bank account into physical gold bullion in your gold savings account.
After the transaction you have the same amount of money. But now it’s in gold instead. Read my complete review of Karatbars to get a full insight to how it all works and why this is one of the best things I’ve found during my 10 year gold investing career.