Preserving Wealth Through Investments in Precious Metals

Technology has not only made our lives easier but has also provided various means by which people can amass great wealth in one lifetime. Take billionaires like Elon Musk and Jeff Bezos, for example, who both made their fortunes from tech. There’s also Mark Zuckerberg, Bill Gates, Larry Page, and Sergey Brin, to mention a few. 

All these billionaires made their fortunes from tech, founding companies like SpaceX, Amazon, Facebook, Microsoft, and Google. These companies are some of the most valuable companies on the planet. As matter of fact, save for SpaceX, all the other companies mentioned here have a market value of above $1 trillion! These are numbers that have never been seen or heard of before. Click here to learn more about the most valuable companies in the world by market cap. 

But while technology is available to nearly everyone on the planet, not all of us are going to make billions through tech. Take billionaire Warren Buffet, for example. He is among the top ten richest men in the world with an estimated net worth of about $105.2 billion. However, unlike the other billionaires we mentioned above, he amassed wealth through strategic and profitable investments. As a matter of fact, he is considered one of the most successful investors of all time!

What are we trying to establish from this? The fact that everyone does not have to enter the tech space to amass wealth in their lifetime. Through strategically planned investments, regular people can also make sizeable fortunes and become financially free, just like Warren Buffet. 

But with so many investment instruments and products, beginner investors may have a challenging time deciding which is best, or worse, make unprofitable investments. While investment options like stocks,  ETFs, bonds, and real estate are great for growing wealth, precious metals are considered a safer option when it comes to preserving and steadily growing wealth. Investing in precious metals like gold and silver may not bring big and quick returns like the others. But it is a perfect option for investors who would like to grow their wealth with a stable and safe option. 

Precious Metals

These are rare, naturally occurring elements that have a high value in economies around the world. Most of their value comes from the fact that they have played important roles throughout financial history, their supply is limited, and they are used in a wide range of important industrial processes. Today, the most popular precious metals include gold, silver, platinum, and palladium. 

Why Precious Metals?

Precious metals investments are becoming quite popular among investors for many reasons. Let’s discuss some of the reasons why many investors are turning to these assets as a way to preserve wealth. 

Immune to Financial Crises

One thing that investors like about precious metals, especially gold, is the fact that they are barely affected by financial crises. The 2008 economic crisis is the perfect scenario for explaining this point. While other investment products suffered heavy losses, the gold market was flourishing. In 2008, gold price increased by 5.6%, in terms of the US dollar. The following year, 2009, it increased by 23.4% and by 29.5% in 2010. 

In September 2008, gold was selling for about $700 per ounce but by October 2011, its price was sitting at an all-time high of about $1,900. This record growth happened at a time when the entire world was still recovering from the effects of the stock market crash in 2008. Visit https://www.thebalance.com/stock-market-crash-of-2008-3305535 to learn more about the causes and effects of the stock market crash. 

Precious metals perform so well in times of economic uncertainty because they are tangible assets with inherent values. At such times, they are the safest way to protect one’s wealth and even make a profit while doing so, since their values typically rise as demand increases. 

Hedge Against Inflation 

Precious metals have a limited supply which is one of the reasons they can withstand the effects of inflation. More notable is the fact that their prices tend to increase when the cost-of-living increases. Over the last five decades, investors have seen the stock market take a plunge in high inflation years while gold prices soar to new heights. 

Unlike fiat currency that loses its purchasing power to inflation, that of gold remains the same or may even rise. To put this in context, a $100 bill is not worth what it was 20 years ago in terms of purchasing power because of inflation. But one ounce of gold today is worth way more than it was 20 years ago. 

Increase in Demand

We mentioned earlier that the supply of precious metals is limited as they occur naturally. Since they are becoming harder to find and mine, demand for these metals has been rising steadily. What does this mean for investors? As demand rises, they become even more valuable which leads to an increase in market price. 

So, as investors protect their wealth by investing in these assets, they are also positioning themselves for big returns in the future. However, it is important to note that only investors that physically invest in these assets by buying them in coins or bars may enjoy this benefit. Unlike in the past, buying bullion is much easier now as many reputable dealers that these commodities online. 

If you do not own these assets physically yet but would like to, you can do so with little to no stress at all. Once you find a reputable dealer and you complete your order, the asset is shipped right to your doorstep. That said, buying precious metals online can be a risky endeavor as there are many fraudulent companies out there. 

To protect yourself from fraud, you must do some research on every company before making a purchase. Reading customer reviews is also a terrific way to find out how trustworthy and reliable a company is. Visit Advantage Gold review to find reputable precious metals dealers. 

Final Thoughts

It is important to note that the relationship between the stock market and precious metals like gold, for example, is an inverse one. That is, when the stock market suffers, the price of gold and other precious metals typically goes up and vice versa. What this means is that there are also risks to investing in precious metals. However, while the prices of these assets may drop in the absence of an economic crisis, they remain a good store of value, a hedge against inflation, and a great way to preserve wealth in the long run.