Why Owning Gold Matters for Family Finances

Gold is not a word that is ever seriously uttered in modern homes, much less when it’s time to calculate the household budget. Any good household budget should involve a significant amount of saving for a rainy day, low risk investments, and retirement savings. Families tend to own assets as property or cash. Even if you have invested in assets like stocks, these are considered cash assets because the value is based on the dollar. Gold is a different type of asset with a value that is related to the dollar, but is not dependent on it. That’s why it’s recommended for many families to buy gold in the form of coins or bars. Read ahead to find out why owning gold is important for average family finances:

Gold is the Best Hedge against Recessions

Gold is valued in a unique manner so that when the price of the dollar goes down, the price of gold goes up. If you check gold spot prices for any given day over a period of time, you will see a lot of fluctuation. No one invests in assets that fluctuate like gold does. However, buying gold is not an investment, it’s a hedge. Because gold prices go up when the dollar is down, the value of gold is truly felt during economic slumps.

For example, in 2008 following the recession, gold prices soared just as the dollar plummeted. Those who had assets in both stocks and bonds emerged from the crisis largely with their wealth intact. So, if you are investing in any type of cash asset for emergencies or retirement, buy gold to protect your cash assets against another recession. You can buy gold in small amounts from well-reviewed companies like LearCapital.com.

Gold has Intrinsic Value

Cash assets like stocks and bonds can always be worth nothing. If you owned Lehmann Brothers stocks in 2007, you probably made good money. But by 2009, these once lucrative stocks were worth exactly zero dollars. The same applies to assets like bonds, too. If you bought Argentinean, Greek or Venezuelan government bonds five years ago, you will find that the value of these stocks now are way below the original worth.  Gold, on the other hand, is never valued at zero. Gold always has a price, as a hedge against currency, as the main component of gold jewelry, and also for industrial use in things like electronic circuitry. That makes gold a rather lucrative asset with many advantages to own.

You Can Trade with Gold

If you buy gold coins, you can use these to trade with local credit unions, shop owners, and people who sell things like ammo. As mentioned before, gold is always valuable. Buy national mints, not collectible coins, to trade with if needed.

Gold is a Great Diversification Asset

Scared that you have put too many eggs in one basket? Not to worry; you can diversify your financial interests with gold. As mentioned above, it will act as a hedge and protect your cash assets in investment portfolios or retirement accounts.

You can store gold in a bank or put one in a self-directed IRA. For the security of your family’s long term finances, seriously consider buying a precious metal like gold.