Today we’re going to discuss why I think more Americans don’t own precious metals and if they do, why don’t they own more. I’ve seen all sorts of different estimates in terms of how many people own a decent amount of gold or silver, meaning at least 5 percent of net worth. It’s clear though most people don’t or if they do own precious metals, not enough.
Now let’s talk about arguments I hear against buying gold and silver.
(1) Now one argument against holding it is that there are no dividends. I hear this a lot. They also make the argument about not having cash flows, so it’s not easy to value it. But what people don’t seem to get is that other investments fall flat where gold and silver shine, no pun intended. And dividends get slashed all the time. But these same people never make that argument against Real Estate. They’ll advise you to diversify in real estate, which has no dividends and to avoid gold and silver like the plague.
(2) Another argument I hear is that stocks outperform gold. And this is where selective memory comes into play. Often, you’ll see critics of gold or silver pick out the time periods where gold or silver was stagnant or had a huge drop. But the same can be said if you compare bonds against stocks, precious metals are there to retain wealth and provide liquidity. It’s a real asset.
(3) Now a third reason I think more people don’t hold gold is b/c it is considered an archaic asset and not something sexy like cryptocurrency. It also doesn’t produce the exponential returns of something like cryptocurrency, other collectibles like sports cards or even individual stocks. Precious metals are not a get rich quick scheme.
(4) Now another reason is Security. People think if they own a lot of gold or silver it might get stolen. And look, this can be a valid concern if you’re living in a dangerous area or maybe you travel a lot. People might prefer living minimally and not want to get insurance for it. But still owning some doesn’t put your livelihood at risk.
And along the same lines, People move around more than ever. If I’m young and moving every few years, I might not want to deal with hauling an expensive asset around.
(5) The American public doesn’t view gold and silver as liquid. They view it as a hard asset that’s hard to get rid of quickly. And this couldn’t be further from the truth. Gold will always have a buyer, and silver too, there is intrinsic value with the metal.
So instead of viewing these metals as liquid, people want the ease of being able to sell things from there phone and view other assets as just easier to deal with.
Precious metals are both money and insurance. Unlike, insurance though I am building wealth by stacking. In a collapse, I’ll have money.
Gold and silver are meant to preserve purchasing power but also allow you to build wealth.
