BUT WHAT ABOUT COMPOUND INTEREST?! Part 2 of "Why The Gold Price ALMOST Doesn't Matter" seeks to answer this frequently commented question since posting the original video. Buy your favourite gold and silver bullion from your favourite bullion dealer at www.bullionnow.com.au
All those years of collecting gold for what if you cant enjoy it ? You would probably die before even use them. Your kids and family will enjoy them at least
Based on my experience of owning gold kilo bars, one factor to consider when owning is where to sell the kilo bars when required. As one kilo gold bar is not divisible. hence one has to sell at one go. and usually to bullion dealers. One needs to ensure the spot price is high enough to make a decent returns. Else kilo bars are for long term storage... like till gold is $3000 /oz to $5000 /oz.. One way to overcome this is to own some 100g gold bars, (10 x 100g= 1 kilo gold bars.) and sell it online or to anyone whenever u wish or want.. henceforth more divisible. Lastly Gold is insurance and a form of preservation of wealth..., buy some now, and im sure u will not regret it in 5-10 years from now. Liked your video!
Careful, don't spend all of your cash in one go on gold, just some of it. We all need this monopoly toilet paper 'money' for everyday transactions. Buying a kilo of gold won't make you rich or preserve any wealth if it takes all of your cash to buy it. Buy smaller amounts👍
I'm enjoying your vids. Please keep them coming. In the future, I'd like more vids about buying and selling investment gold and silver bars locally in Australia, especially for those of us not living in Melbourne or Sydney and who can't get to a dealer easily or quickly.
I love it. Great return over those years. Decent from a growth perspective and excellent from a presevation perspective. The other thing is when you deposit money in a bank you are lending them your money and its no guarrantee they will pay you back because they are loaning that money out at high risk in these Covid 19 uncertain times. Buy Gold. Buy Silver and wait out the depression. Thankyou
The only reason cash made $60k in a bank was because interest existed. It doesn't exist for us anymore. So $1,200 is probably going to be worth $2,000 at best over 50 years. That means Gold is the ultimate buy.
Love your videos. Keep 'Em coming. As for the arguments on compound interest, investment products, Crypto currencies, etc, ALL stuff YOU DON'T control!!! NONE! You are a passenger on the ride. You don't know where it's going. You don't know if there are pit stops, pit falls....Nothing. Very, very few win at the market scam. It's the three card Monty. I'm old school: If you don't hold it.......
The old school like you are dying out, get with the program grandpa. You have no control over precious metals either. just look at all the manipulation. In my opinion you should hold some crypto, as a small high risk percentage of your portfolio. The ROI is too good not to dip your toes in a bit at the very least. diversify..
Excellent, informative video that really puts things into perspective. However, it must be mentioned that you are using a recent gold price to arrive at these figures. In July 2020 gold was between $1,800 and $2,000US. If you had made this same video in December of 2015 you would have lost 5 years of compounding interest to be sure, but gold was at $1,060US! The only reason you are ahead in this scenario is because gold has been on a recent big run. So people, do remember that if you sock money into a bank and receive compound interest, that figure will always go up, whereas gold will continue to fluctuate, sometimes dramatically. Certainly own gold, but diversification is your best bet.
For what it's worth, according to Incrementum's "In Gold we trust" report, using the average (Worldwide) return on Gold from 2001 to 2020, you'd have a compound return of 650% at the end of that 20 year period. So that's okay but not brilliant, however, given we're probably at the start of a massive bull run, the compound figure will look a lot different in 2040 :)
In the USA interest is taxed at the same tax rate as ordinary earned income, so the “net after tax growth rate” using compound interest (especially in high income tax brackets) would be MUCH less. Plus, Investment assets held more than 1 year (e.g., stocks, bonds or gold) are taxed at much lower long term capital gains tax rates. Lastly, I personally view gold similar to investments in raw undeveloped land (e.g., both are likely to appreciate greatly in value over long terms, neither generate monthly income and smaller pieces/parcels carry a higher premium). However, gold has several GREAT benefits compared to raw undeveloped land: 1) it’s not subject to state/county/local property taxes, which must be paid annually on real estate in most states based on the “appraised value” determined by local government appraisers (e.g, I pay roughly $11k USD in annual property taxes on raw undeveloped land I own). I could buy ten 1 kilogram gold bars, bury them on the land and technically double my land value without doubling my property taxes…because property taxes are based on average values of similar size homes/land in the same area (appraisers value land on what is known)… 2) Gold is easily traded regardless of the size. Land trades (automobiles as well) involve legal title transfers and must be recorded with local government property districts to ensure the land is not encumbered as “security” for unpaid debts. 3). Insuring gold bullion against theft, fire… in home vaults or in bank vault, is more reasonable than real estate property insurance if you know where to look. 4) Gold is portable …Land is not portable (that’s a pro and con for theft). However, $1 million of gold value can be held in a relatively small safe. 5) Land can be expropriated by governments for public use. Gold can be confiscated as well (FDR’s Executive Order 6102) BUT proof of gold ownership isn’t apparent or always recorded like land title transaction (many wealthy people held onto gold despite FDR’s order).
With the silver to gold price ratio now sitting around 100, well above historical average, does that mean gold is perhaps too expensive or silver is too cheap? It also amazes me that palladium is worth far more than platinum right now, and compared to gold, platinum is very cheap.
those are industrial metals, people are buying less cars as unemployment has spiked everywhere and people get lockdown at home, so less industrial metals needed for the catalytic converters and other parts.
@@redkelah silver is an industrial metal with far more uses, 2nd most used commodity in the world and there is a major shortage. The paper silver market is to blame.
@@simonmiddleton4487 electrical/electronics is by far the biggest demand (~50% of total demand) followed by jewellery and bullion which make up about 20% each. With lockdowns oil usage is way down and slowdowns in the economy means less electrical/electronics consumption == lower silver demand and prices.
@@redkelah very good point, 75% of silver is mined as a buy product of other industrial metals so as demand for those industrial products diminish then their is less abundance of silver. The mining industry has been shocked by Corona shut downs all over the world. Mints have been shut down air traffic has been shut down as precious metals travel by air. Thier is a major silver shortage as production lags. Silver is a hybrid metal and people forget this, if the global economy is going into a world wide economic collapse thats when we will see silver move because the other side of silvers value comes into play. Yes silver has a thousand industrial uses but historically it has been real money, a storage of wealth and in troubled times silver has out paces gold. When there are over 500 paper contracts per oz of pysical silver obove ground been traded on the comex you have to ask your self " how are they going to fulfill their orders with physical metals when the big investors want their silver in silver and not a currency thats becoming worthless. Gold and silver are the most traded commodities on the planet and they are the most undervalued assets period. We are living through the perfect storm for the biggest and longest bull market in history. And considering gold and silver is such a small market when the big money poors in, its going to be spectacular.
Now just imagine the next 30 years with your savings account giving a 1/4 of a percent interest at best. No thanks. I'll stick with real money. God's money.
Another reason why gold is king is privacy and liquidity. Imagine one has an emergency in between those 40 yrs and taking your $ may incur a heavy penalty. Plus gold has the added advantage of always being sought out peer to peer. If ppl only talk to one another that is
not disagreeing but looking at a different time period ie around 1985 to 2005 - i'm not sure gold held its spending power over that 20 year period, could that happen again ?
I buy a lot of Gold and what scares me about Gold is the Aussie Dollar. If the AUD goes 1:1 to the USD then I am screwed. It did it about a decade ago and that was a Good time to buy gold but if you pay $2700aud now and the currency goes 1:1 then you will be losing over $700oz...
all depends on when u sell. And what happens if Gold goes to $5000? or $10,000 as is predicted by some? You will be laughing if you held on then regardless of how strong the AUD is
AUD will hit 50 or less to USD in a crisis situation. Debt and "money printing" at the highest ever. And the only thing holding AUD up is iron ore @100 plus but thats as good as it gets. Only way is down for AUD in the coming years.
mel noda - that's a bit pricey for an ounce isn't it? Not sure what Aussie spot price is but if you say 1800 may be the high, how come you paid that much? I bought an ounce yesterday for £1492 with spot being £1423 (July 2020) for comparison
Hello Bullion Now, Can I work together with you as a representative ? I have clients whom are looking for Bullion Gold in Reasonable price or possibly low in Premium. Could You even export?
But gold has overtaken the cash only in the last 2 years. Just 2 years ago, after holding it 47 years rather than 49, that gold kilo was worth only about $54,500.
And the cash - even at 8% which is a slightly higher average than everyone actually quotes - is worth pretty much the same at that time. When you start taking off taxes and bank charges it is still a lot less than gold and with gold - it doesn't matter how badly things are managed. With your bank deposit you just have to hope it's there at the end. If you're in Australia (and a bit on the older side) you would remember Pyramid Building Society, State Bank of Victoria and several others where deposits were Government guaranteed and still lost when the banks were badly managed. Every way you calculate it - gold over time is at worst equal to cash but I would argue in all cases - better at storing wealth that compounding cash.
@@BullionNow I agree, the cash after 47 years is the same value as the gold. And the taxes, charges, and risks that you mentioned, make the 49 year scenario even better for gold. I know someone who got burned with Pyramid, and I got burned by the IOOF building society. I would rather have my wealth in gold (and stocks and RE) than cash. My point was simply that without the recent significant uptick in POG, the 49 year picture would look much worse for gold ($64K-costs vs $54K). The uptick was always going to come, but no-one knew when. It might have transpired instead that gold would lag cash for another five or ten years. But I agree that long term, all things considered, gold will almost always be the better option.
What about gold vs the rest of the currency, when was the last time the bank gave us 8%. There just isn't an argument for fiat tickets. Currencies mortal enemy is GOLD, it just shows how government and central banks have been robbing is through inflation at the same time
I told a friend who got almost 1 million dollars in a will to buy gold when it was around $398 US ounce in early 2000`s he would have made a good return. But he blew it on women and pissed it up the wall :P
Just as long as you can find buyers when you need to offload it fast. I'd find it hard to convince my car dealer to take some gold off me when i want to buy that dream machine one day.
ok putting my tin foil hat on here but that pile of paper is not really money it'a a negotiable instrument a promise to pay here in the uk so the real wealth is that gold bar and not the paper
LIKE YOU KNOW I LOST LIKE HOW DO YOU KNOW I LOST LIKE YOU HAVE THE GOLD TO PROVE IT YEA YOU DO LIKE MY ONLY CHANCE TO BE WOLF IS TO BE PREPARED FOR THE RUNNING
Im having a wet day dream just fantasizing about buying an oz of gold for 40 bucks. The good ol days huh..i did start buying at 325 but no where near enough. Darn it...lol....time machine anybody...pretty please....lol...i am still buying though
BUT WHAT ABOUT COMPOUND INTEREST?! Part 2 of "Why The Gold Price ALMOST Doesn't Matter" seeks to answer this frequently commented question since posting the original video. Buy your favourite gold and silver bullion from your favourite bullion dealer at www.bullionnow.com.au
One ounce a month for 38 years. Never sold a gram.
BRILLIANT! Well done mate :)
passing it on to the kids?
adress and time you leave to work, thx.
All those years of collecting gold for what if you cant enjoy it ? You would probably die before even use them. Your kids and family will enjoy them at least
My grandsd told me years ago -"you can never pay too much for gold, wait long enough and you'll always get your money back"
Very true. Best to start investing at a young age though! 😂
Based on my experience of owning gold kilo bars, one factor to consider when owning is where to sell the kilo bars when required. As one kilo gold bar is not divisible. hence one has to sell at one go. and usually to bullion dealers. One needs to ensure the spot price is high enough to make a decent returns. Else kilo bars are for long term storage... like till gold is $3000 /oz to $5000 /oz.. One way to overcome this is to own some 100g gold bars, (10 x 100g= 1 kilo gold bars.) and sell it online or to anyone whenever u wish or want.. henceforth more divisible. Lastly Gold is insurance and a form of preservation of wealth..., buy some now, and im sure u will not regret it in 5-10 years from now. Liked your video!
Melt it down into 10 pieces and sell at spot melt to a smelter tada problem solved
Oh I’m so glad you guys made a part 2
Great video, totally agree Gold is not solely an investment it’s more of a wealth preservation tool
Yup!
Very good presentation. Never seen that much cash on the table. Lots of effort to put into this video. Thank you.
If I could afford a kilo of gold I wouldn't be worrying about such things lol
😁😁
Buy smaller amounts. It will make u feel better.
I’ve got about 27 ounces trying so hard to get to the 1 kilo (32 oz)mark lol
Careful, don't spend all of your cash in one go on gold, just some of it. We all need this monopoly toilet paper 'money' for everyday transactions. Buying a kilo of gold won't make you rich or preserve any wealth if it takes all of your cash to buy it. Buy smaller amounts👍
i got like 5 oz im rich af lol
One could also say that I could have used gold to play the Gold and Silver ratio a few times over the 49 years and maybe tripled my metals.
Very true!
I'm enjoying your vids. Please keep them coming.
In the future, I'd like more vids about buying and selling investment gold and silver bars locally in Australia, especially for those of us not living in Melbourne or Sydney and who can't get to a dealer easily or quickly.
I was going to make a TH-cam video about scams so can I borrow the gold and cash for my video?
😂😂😂
Thanks Michael another great video👍👍
I like the way you think........
Unless you bought in 1980 and sold in 2000.. History repeats
I love it. Great return over those years. Decent from a growth perspective and excellent from a presevation perspective. The other thing is when you deposit money in a bank you are lending them your money and its no guarrantee they will pay you back because they are loaning that money out at high risk in these Covid 19 uncertain times. Buy Gold. Buy Silver and wait out the depression. Thankyou
Thank you very much for explaining that gold in the long run is definitely a must holding in everyone's portfolio! 👍💰🇺🇸
Thanks 🙏 for your education.
Love these videos. Great work 👍🏼
The only reason cash made $60k in a bank was because interest existed. It doesn't exist for us anymore. So $1,200 is probably going to be worth $2,000 at best over 50 years. That means Gold is the ultimate buy.
Love your videos. Keep 'Em coming.
As for the arguments on compound interest, investment products, Crypto currencies, etc, ALL stuff YOU DON'T control!!! NONE!
You are a passenger on the ride. You don't know where it's going. You don't know if there are pit stops, pit falls....Nothing.
Very, very few win at the market scam. It's the three card Monty. I'm old school: If you don't hold it.......
The old school like you are dying out, get with the program grandpa. You have no control over precious metals either. just look at all the manipulation. In my opinion you should hold some crypto, as a small high risk percentage of your portfolio. The ROI is too good not to dip your toes in a bit at the very least. diversify..
@@Fanta.... yeah such a good ROI last year hahahahhahahha
THANKS nice simple illustration
Welcome 😊
Great video 😊 really enjoyed it.
Glad you enjoyed it!
Excellent, informative video that really puts things into perspective. However, it must be mentioned that you are using a recent gold price to arrive at these figures. In July 2020 gold was between $1,800 and $2,000US. If you had made this same video in December of 2015 you would have lost 5 years of compounding interest to be sure, but gold was at $1,060US! The only reason you are ahead in this scenario is because gold has been on a recent big run. So people, do remember that if you sock money into a bank and receive compound interest, that figure will always go up, whereas gold will continue to fluctuate, sometimes dramatically. Certainly own gold, but diversification is your best bet.
I agree. Love the metals
For what it's worth, according to Incrementum's "In Gold we trust" report, using the average (Worldwide) return on Gold from 2001 to 2020, you'd have a compound return of 650% at the end of that 20 year period. So that's okay but not brilliant, however, given we're probably at the start of a massive bull run, the compound figure will look a lot different in 2040 :)
In the USA interest is taxed at the same tax rate as ordinary earned income, so the “net after tax growth rate” using compound interest (especially in high income tax brackets) would be MUCH less. Plus, Investment assets held more than 1 year (e.g., stocks, bonds or gold) are taxed at much lower long term capital gains tax rates.
Lastly, I personally view gold similar to investments in raw undeveloped land (e.g., both are likely to appreciate greatly in value over long terms, neither generate monthly income and smaller pieces/parcels carry a higher premium). However, gold has several GREAT benefits compared to raw undeveloped land:
1) it’s not subject to state/county/local property taxes, which must be paid annually on real estate in most states based on the “appraised value” determined by local government appraisers (e.g, I pay roughly $11k USD in annual property taxes on raw undeveloped land I own). I could buy ten 1 kilogram gold bars, bury them on the land and technically double my land value without doubling my property taxes…because property taxes are based on average values of similar size homes/land in the same area (appraisers value land on what is known)…
2) Gold is easily traded regardless of the size. Land trades (automobiles as well) involve legal title transfers and must be recorded with local government property districts to ensure the land is not encumbered as “security” for unpaid debts.
3). Insuring gold bullion against theft, fire… in home vaults or in bank vault, is more reasonable than real estate property insurance if you know where to look.
4) Gold is portable …Land is not portable (that’s a pro and con for theft). However, $1 million of gold value can be held in a relatively small safe.
5) Land can be expropriated by governments for public use. Gold can be confiscated as well (FDR’s Executive Order 6102) BUT proof of gold ownership isn’t apparent or always recorded like land title transaction (many wealthy people held onto gold despite FDR’s order).
With the silver to gold price ratio now sitting around 100, well above historical average, does that mean gold is perhaps too expensive or silver is too cheap?
It also amazes me that palladium is worth far more than platinum right now, and compared to gold, platinum is very cheap.
those are industrial metals, people are buying less cars as unemployment has spiked everywhere and people get lockdown at home, so less industrial metals needed for the catalytic converters and other parts.
@@redkelah silver is an industrial metal with far more uses, 2nd most used commodity in the world and there is a major shortage. The paper silver market is to blame.
@@simonmiddleton4487 electrical/electronics is by far the biggest demand (~50% of total demand) followed by jewellery and bullion which make up about 20% each. With lockdowns oil usage is way down and slowdowns in the economy means less electrical/electronics consumption == lower silver demand and prices.
@@redkelah very good point, 75% of silver is mined as a buy product of other industrial metals so as demand for those industrial products diminish then their is less abundance of silver. The mining industry has been shocked by Corona shut downs all over the world. Mints have been shut down air traffic has been shut down as precious metals travel by air. Thier is a major silver shortage as production lags. Silver is a hybrid metal and people forget this, if the global economy is going into a world wide economic collapse thats when we will see silver move because the other side of silvers value comes into play. Yes silver has a thousand industrial uses but historically it has been real money, a storage of wealth and in troubled times silver has out paces gold. When there are over 500 paper contracts per oz of pysical silver obove ground been traded on the comex you have to ask your self " how are they going to fulfill their orders with physical metals when the big investors want their silver in silver and not a currency thats becoming worthless. Gold and silver are the most traded commodities on the planet and they are the most undervalued assets period. We are living through the perfect storm for the biggest and longest bull market in history. And considering gold and silver is such a small market when the big money poors in, its going to be spectacular.
You should mention what the gold investment return would be for the last six months and last 12 months
Much better than cash 😁
@@BullionNow yep
I like your videos. Wished I lived in Australia so I could support
We do ship overseas 😉
@@BullionNow and customs fees?? that´s terrible idea my man.
Please tell me no more...I am about to cry....
Good work...
It's good you show the money! Unfortunally you have to show the money. People does not have knowledge with money.
Now just imagine the next 30 years with your savings account giving a 1/4 of a percent interest at best. No thanks. I'll stick with real money. God's money.
Another reason why gold is king is privacy and liquidity. Imagine one has an emergency in between those 40 yrs and taking your $ may incur a heavy penalty. Plus gold has the added advantage of always being sought out peer to peer. If ppl only talk to one another that is
Well said!
not disagreeing but looking at a different time period ie around 1985 to 2005 - i'm not sure gold held its spending power over that 20 year period, could that happen again ?
Getting in at the "right time" certainly helps, so it depends to some degree when someone purchases.
You are losing money in real terms by putting money in the bank at 1-2%.
Absolutely!
I buy a lot of Gold and what scares me about Gold is the Aussie Dollar. If the AUD goes 1:1 to the USD then I am screwed. It did it about a decade ago and that was a Good time to buy gold but if you pay $2700aud now and the currency goes 1:1 then you will be losing over $700oz...
all depends on when u sell. And what happens if Gold goes to $5000? or $10,000 as is predicted by some? You will be laughing if you held on then regardless of how strong the AUD is
AUD will hit 50 or less to USD in a crisis situation. Debt and "money printing" at the highest ever. And the only thing holding AUD up is iron ore @100 plus but thats as good as it gets. Only way is down for AUD in the coming years.
I'm a newbie to buying gold. I paid $2742oz 19 March 2020 and I'm still behind regardless if spot has hit all time highs of $1800.
mel noda - that's a bit pricey for an ounce isn't it? Not sure what Aussie spot price is but if you say 1800 may be the high, how come you paid that much? I bought an ounce yesterday for £1492 with spot being £1423 (July 2020) for comparison
mel noda you paid 2700$!?! For an ounce of gold
5,000,000% in the last 10 minutes...I laughed.
😁😁
Hello Bullion Now, Can I work together with you as a representative ? I have clients whom are looking for Bullion Gold in Reasonable price or possibly low in Premium. Could You even export?
Hi I love your videos! Can you PLEASE do the SAME video for SILVER!
Totally agreed
But gold has overtaken the cash only in the last 2 years.
Just 2 years ago, after holding it 47 years rather than 49, that gold kilo was worth only about $54,500.
And the cash - even at 8% which is a slightly higher average than everyone actually quotes - is worth pretty much the same at that time. When you start taking off taxes and bank charges it is still a lot less than gold and with gold - it doesn't matter how badly things are managed. With your bank deposit you just have to hope it's there at the end. If you're in Australia (and a bit on the older side) you would remember Pyramid Building Society, State Bank of Victoria and several others where deposits were Government guaranteed and still lost when the banks were badly managed.
Every way you calculate it - gold over time is at worst equal to cash but I would argue in all cases - better at storing wealth that compounding cash.
@@BullionNow I agree, the cash after 47 years is the same value as the gold. And the taxes, charges, and risks that you mentioned, make the 49 year scenario even better for gold. I know someone who got burned with Pyramid, and I got burned by the IOOF building society. I would rather have my wealth in gold (and stocks and RE) than cash.
My point was simply that without the recent significant uptick in POG, the 49 year picture would look much worse for gold ($64K-costs vs $54K). The uptick was always going to come, but no-one knew when. It might have transpired instead that gold would lag cash for another five or ten years. But I agree that long term, all things considered, gold will almost always be the better option.
What about gold vs the rest of the currency, when was the last time the bank gave us 8%. There just isn't an argument for fiat tickets. Currencies mortal enemy is GOLD, it just shows how government and central banks have been robbing is through inflation at the same time
Just finished watching your last video. Haha
Haha nice!
Wait a minute. A kilo bar for 1200 dollars???? 1200. An ounce is 1900 right now. How?
I told a friend who got almost 1 million dollars in a will to buy gold when it was around $398 US ounce in early 2000`s he would have made a good return. But he blew it on women and pissed it up the wall :P
Ouch...
price of gold matters to me when I'm buying gold...
Just as long as you can find buyers when you need to offload it fast. I'd find it hard to convince my car dealer to take some gold off me when i want to buy that dream machine one day.
yep, and as soon as you sell it to a dealer, the government will be waiting with their hand out for their cut of your profits.
In 1971, how much the average worker made per week
How can i start work with you.
1200$ kilos and 8% interest rates on savings... 🤔
If you had stored that $1000 in your mattress until 2010 and then bought Bitcoins it would be worth $775,000,000 today. :-)
Bro, 20 years allright 49 years is too long=))
AUSTRAC will be calling soon
😂😂😂😂😂😂😂😂
ok putting my tin foil hat on here but that pile of paper is not really money it'a a negotiable instrument a promise to pay here in the uk so the real wealth is that gold bar and not the paper
You have to declare the interest and pay tax on your tax return, now work it out again.
That becomes very complicated as people all have different tax rates but you are correct. It would definitely skew the returns in favour of gold
LIKE YOU KNOW I LOST LIKE HOW DO YOU KNOW I LOST LIKE YOU HAVE THE GOLD TO PROVE IT YEA YOU DO LIKE MY ONLY CHANCE TO BE WOLF IS TO BE PREPARED FOR THE RUNNING
Abdul FATAHU
Im having a wet day dream just fantasizing about buying an oz of gold for 40 bucks. The good ol days huh..i did start buying at 325 but no where near enough. Darn it...lol....time machine anybody...pretty please....lol...i am still buying though
Yeah but 40 bucks was worth a lot more then in today’s money. Always need to adjust it for inflation :)