Why Buying and Storing Gold at Home is Not a Great Idea
Gold is an increasingly popular investment choice, and many investors choose to store it at home. Unfortunately, this strategy can have serious drawbacks if you live in an unsafe area or have limited storage space.
If you purchase and store gold at home, only one trusted individual should know where it is kept; otherwise, your family could lose access to it should anything happen to you or if they become incapacitated or deceased.
1. It’s illiquid
Gold can be an ideal addition to a diverse portfolio, but investors must remember its illiquidity – meaning it may take more time for sellers to receive cash after selling than with stocks or real estate investments.
Store it safely at home as this reduces its liquidity; burglars often break into homes, potentially wiping out your collection. Furthermore, fire can destroy it and thus decrease its value significantly.
Additionally, your Gold could be taken by the government during an economic emergency such as during the Great Depression of 1933 when citizens were required to sell it at a loss in order to print more money and stimulate the economy. Though unlikely, this scenario should always be kept in mind when making investment decisions.
2. It’s expensive
Gold is an expensive asset to store at home and keeping it secure may cost money. To do this, it will require investing in a secure safe, security system and insurance policies – expenses which might not have been anticipated as part of your investment strategy.
When investing in physical gold such as coins or bars, additional costs must also be considered. Unlike many financial products, gold cannot be purchased digitally and stored on your computer or mobile device – it must be physically collected instead. As with other services, shipping/handling charges will apply when buying this form of currency.
Gold stored at home can also be costly in terms of space. Bullion can occupy much more space than expected, which may necessitate investing in expensive furniture or instruments designed to store it. Furthermore, burglars might be more inclined to steal your bullion if it’s stored there – thus it is wiser to store your bullion away from prying eyes at all times.
3. It’s not insured
Home storage may be cheaper than depositories or bank vaults, but is also less secure. Thieves often target valuable metals as theft targets; therefore investing in a high-quality safe that’s hard for burglars to access is essential.
Storing metals at home requires you to purchase additional insurance, as homeowners’ policies often don’t cover their full value. Before investing in precious metals at home, it is crucial that you consult your insurer so that your investment is covered fully.
Physical gold does not generate passive income or lower capital gains taxes, making it unsuitable as a one-size-fits-all solution for investors. But gold may add balance to a portfolio and can provide stability during times when other investments may suffer a dip. If considering adding gold, speak to an impartial financial planner who can assist in selecting an asset suitable to your unique circumstances.
4. It’s risky
Home storage of gold can be costly and is fraught with risks of theft; many gold buyers instead turn to banks or 3rd-party storage facilities as a safer solution for keeping their precious metals.
However, this option doesn’t come without risk either: buyers could still incur high storage expenses and should secure their investment with insurance coverage.
Keep the location of your gold storage a secret to prevent theft or unwanted attention, since more people who know where it is stored increase its susceptibility. Also keep in mind that house insurance may not cover such investments so speaking to an expert about potential storage solutions may be worthwhile.
Comments are closed here.