To protect your assets, you should consider about making a gold investment, instead of just saving it.

Saving is one way to reserve your money for future uses. But if you think it through, saving will only harm yourself. How could it be? There is inflation. Your money will not worth much over time because its value will be reduced by time. Even though you will receive interest every month for your saving, it will not count much if you adjust it according to the current inflation.

This means, you have to find a way to protect your assets. Protecting it doesn't mean storing it away from your hand. In another word, simply putting it in saving or deposit account are not enough.

 

Long-Lasting Wealth

To protect your assets, you should consider about making an investment, instead of just saving it. So, what kind of investment that is going to survive against inflation? the average investment has considerable degree of risk, plus the return are going to be only about equal to inflation rate.

If you think about them, then you would do better investing your money on gold. Even though it will go down every once in a while, but in the long term, the value of gold always rises.

Let's take an example : In 1997 the price of motorcycle was about 4,6 million IDR. Whereas at those days, the price of gold was 23.000 IDR per gram. So you needed 200 grams of gold to buy a motorcycle.  Today, if you buy it with 200 grams , you'll get twice as much motorcycles. With the assumption of 1 gram is 500.000 rupiah. The result is 200 x 500.000 = 100 million. You can buy several motorcycles at the same time. How about 40 years from now? You can imagine how much motorcycles you could buy by then.

Apart from its anti-inflation attributes, gold is also has several advantages:

  1. It can be pawned or used as collateral.
  2. It is long lasting (will not be corroded or destructed).
  3. It is tax-free.
  4. It can be accepted everywhere.

However, before investing your money on gold, you should also considers its drawbacks:

  1. Physically, it is impractical to be brought in your pocket.
  2. Safety and security require special arrangement.
  3. There is no periodical cashflow.
  4. It takes time to liquidate gold.

 

Various Shapes, Various Characters

Commonly, there are three forms of gold: in bullion, in coins, and in jewelries. Buying gold bullions and coins are best if you wanted it for investment. Jewelries are good for ornament, but do not do much as investment. You could decide which one you want according to your taste.

Another shape of gold investment is in commodities market. In the market, you could buy and sell gold in spot (XAU), futures, etc. By buying gold there, you won't be able to hold an actual gold and more susceptible to volatility of price in the fast-paced market. However, investing in such way opens the possibility of gaining profit from two sides of the market as in forex market; you could open both long and short position when you trade XAU/USD.

 

Conclusion

Gold is the only anti-inflation tool. When paper money isn't valid anymore, when any other investment fail, gold surely will still be a symbol of wealth. Although in the current trend, the price of gold declines, but in the long-run, it is a necessary addition to your portofolio. There was an old adage said not to put all of your eggs in the same basket. You may not want to invest all of your money in gold, but it will be good to put some of it in physical gold as reserve for whatever kind of future that awaits us.