One of the biggest questions that many investors ask before they put their money into anything, is whether it still pays to do so. With so many avenues to choose from when it comes to placing your hard-earned savings into, it can be daunting to choose the best one to get bang for your buck. This is especially the case when it comes to thinking long-term, and what you can do now, to enjoy a comfortable debt-free retirement.
Many have chosen to invest in a variety of different options but not as many yields a profitable return. In comparison to some of the common ways to invest, such as:
- Certificates of deposit
- Savings accounts
- Various Bond funds
- Various Index funds
Putting your money into an IRA has seen a lot more benefits and fewer hassles for smart investors, not to mention are affordable. There are two main ones offered in the US, namely the Roth IRA and the traditional one, more about this can be found here.
However, there is also a third option that has seen a steady and secure opportunity for many, which is the gold IRA investment accounts, and are some of the top choices for the majority of the population. This article highlights why it pays to invest your money into this account.
What is a Gold IRA Company?
First, we shall look at a bit of background information. This type of venture is defined by a particular type of Individual Retirement Account that allows individuals, mainly first time or existing investors, to hold IRS approved precious metals, such as gold, palladium or silver in storage for later use or to sell.
Formats that can be stored include bullion coins, of which there are many types, and bars or related stocks. This is different from the typical retirement accounts however that regulations surrounding it are the same as any other. The means by which you can open an account such as this is through a financial custodian or a brokerage i.e. broker or dealer.
The metal is purchased by you or for you, with post-tax funds and stored in a vault or compartment and has slightly higher fees in some cases depending on the company you deal with. Similar to any other type of account, this too, has limits to how much you can buy and store.
Even though holding this metal does not have any immediate advantages, this is something that smart investors consider as a long-term plan. If you are looking to get something out within the next few days or months, then the other types of accounts are a better fit, but with this one, you need to think long-term, to the days when you are going to retire.
So, the big question here is, does it pay to invest in this or not?
Holding Gold – Yes or No?
There are three main ways to do this:
- Buying gold stock
- Investing through ETFs (Exchange Traded Funds)
- Buying the physical asset
It has many intrinsic qualities that only those who have been dealing with it know. But holding it in your portfolio is something anyone can do.
It Holds Its Value Throughout Time
If you compare the historical data of gold vs paper money over the past few years alone, it has been seen that the former has preserved its value more than money has. If, for example, you had a choice of holding physical gold in a vault or holding paper money in a vault, which would you choose?
If you had gone for the gold and did not sell it till now, what it could buy you then and what it could buy you now would make a significant difference i.e. what you could have bought with the gold in the 70s when it was worth (for illustration purposes) $40 compared to what it is worth now in 2021, which is on average about $ 1,770.60 per ounce, the paper money would not even compare.
It not only holds its value throughout time but also increases it, in comparison to most items that get affected by a volatile economy or stock market.
Protection from Outside Influences
As history has shown us, many things have been affected by unfavorable aspects such as inflation or economic downturn, and things like money or stocks and shares are all inevitable affected. However, when it comes to precious metals, they are not impacted as much.
When inflation rises, gold tends to appreciate. With the forecast for the economy being as unpredictable as ever, due to COVID-19, there is no telling what effects we will continue to see in the near future. However, for many in the USA, it looks like gold has remained at an all-time high and investors have enjoyed returns of over 20% on average annually. When money starts to lose its value the rising prices of gold tends to save many clever investors.
It Is a Great tool To Diversify Things
many have heard it over and over again – don’t put all your eggs in one basket, but seldom do people follow this advice. With this type of asset, you don’t need to worry about putting all your eggs in one basket, because you are not allowed to invest paper money, stocks, shares and precious metals all in one type of IRA.
When you reach out to a relevant company, they will help you keep things separate, yet diversified. So, you can open an IRA alongside, but not together with, a traditional savings account so everything does not get affected by each other.
Smart investors often do it themselves and advise others to do the same, and that is to diversify your portfolio. If you don’t know of any individual that has already gotten themselves a piece of this pie, then the first place to go to is a company that can help you with it.
It is not complicated, and when you want to find out how gold IRA companies work, you simply look for the top-rated ones online and approach them with your questions. Often the well-established and reputable ones should be your go-to.
It’s clear that this precious metal is the winner over all the others, when looked at historically. If you are not sure how to go about doing this, seek the advice of a professional always.