Gold is also Global Money

 

Gold is also Global Money

Gold is a smart idea for long term investment: Gold has always been a very popular and smart investment. A lot of people purchase gold as well as keep that for tough times but many of them keep as a long term investment In Asia (Sri Lanka and India), it is quite common to sell gold for cash during an emergency.

Purchasing gold is in many ways just like putting money into a savings account. Gold can be considered an alternative currency. It competes with the USD and other world currencies. Indeed, when you see on the news that the US Dollar index is up, gold will more than likely be down. The opposite is also true.

So why not just save cash? Well, for one, cash is only good if someone will accept it. There are examples throughout history of Countries invalidating or changing their fiat currency. It is possible that you wake up one morning and no one will take your dollars. They are also susceptible to fire and water damage. The biggest reason though, is that inflation eats away at the dollars purchasing power every year.

Gold in contrast, holds its purchasing power. This is why gold is referred to as a hedge against inflation. It preserves your purchasing power.

In addition to holding it’s purchasing power, you will also see spikes in value due to demand. In times of crisis, people run to safe havens, including gold. You can take advantage of these spikes to convert to other valuable property, like real estate.

While I love gold, I would never advise people to put all of your savings in one place. But certainly, 10–20% of your net worth is a good target.