FYInance

Archive for the ‘Investing’ Category

In countries where online investing is not common, people actually keep gold in their home. Farmers and supposedly low income people sometimes have gold hidden away in their home in far of anyone stealing it. In countries where the government cannot be trusted, they prefer to keep money or assets in the form of gold rather than leave them at the bank.

However, in the US, most people don’t keep gold in their home. So, what would someone in the US do if he/she has a bar of real and pure gold that is likely to attract attention? Would gold investing come to mind?

“If I had a bar of pure real gold I would hold onto it and be watching the price of gold on the stock market for at least 15-30 days. I wouldn’t let anyone know that I had it for fear of someone breaking into my house and stealing it.

The price of gold is up right now and if it continues to rise, my gold bar would go up in value. If I started to see a decline I would either try to sell it for the gold market price or try to find someone who would pay more than it’s worth just to have a bar of gold.”

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We have talked a bit about gold but never actually talked about gold investing yet. Gold is a commodity and if you think inflation is a major problem you may want to invest in gold or other commodities. Silver is another popular commodity.

We are going to interview one person who said that he wants to invest in gold but his circumstances do not allow such investment. So, we ask him for fun, what he would do if he had a bar of gold. He said:

“If I had a bar of pure gold, the first thing I would do would be to evaluate the market and see if I could determine whether it would likely increase or decrease in value in the next few weeks. I would then sell the bar when I thought I could get the best price. I would not look back to see if the price increased after I had sold it. Once I had the money for the gold, I would pay down my debts with half of the money, put one fourth into savings and use one fourth for travel, taking my mother to England.”

So, this reader has the right general idea of gold investing and how prices fluctuate. However, gold investing is not a short term type of investing so timing is not right for him. Anyone has any ideas?

If you have gold bars, you might want to trade them in for something else. I actually never had a gold bar so I cannot comment. If anyone has any experience with gold bars and can comment, I will really appreciate it.

Trading gold bars for antique coins

“I would trade the bar of gold for antique gold coins, as gold antique coins would not have to be turned in to the government, due to a recall on gold bars or ingots.

I would then keep the antique gold coins, in a safe place, to borrow against for financing a business.

I would at the end of my life, or when I thought the time was right, hand the coins down to my children, as a solid nest egg to be borrowed against if necessary, but the coins would always be worth their “weight in gold”!

Some people don’t like to invest in stocks or bonds but they like to invest in precious metals such as gold. Why is gold valuable?

Reasons why gold is valuable

1. Gold is the most ideal medium of exchange that retains its value.
2. Gold can be traded like any other forms of valuables even when money is not accepted.
3. Gold is malleable, ductile and can be easily measured and divided.
4. The qualify of gold is consistent.
5. Gold does not rust, tarnish or corrode
6. Gold is quite indestructible
7. Gold is attractive
8. Gold is recognized and accepted by almost everyone

So, in this market, maybe investing in gold is a good idea… any thought anyone?

I often hear people ask about investing in stock to make money today especially people who like to gamble and want to make some quick cash.

I need to make money now, Should I invest in stocks?

In general, the answer to that question is always no. Financial planners often recommend that if you were going to invest in stocks or anything long term, then you can do it only if:

1. you have already set aside enough cash and short term investments for emergency needs. You ‘cash cushion’ should last a few months or longer. That means if you need money now, don’t invest in stocks or long term investments. What would you do if you have an emergency and need money now?
2. you have enough cash reserve for regular expenses such as food, housing, education, health, life insurance, etc etc.

Bear in mind that when you invest in a stock, you don’t know if the market is going to fluctuate (unless you are a very good stock analyst). You are gambling with your money and if that money is not needed soon, then you have time to wait the market out if the market turned against you. However, if you start investing in stocks and then you need the money out for something emergency, you will have to sell and lose out of most of the money, not to mention that the IRS probably will come after  you for capital gains tax too. Day trading is very risk and we will discuss that another day.