Questions about gold arise frequently from new listeners of the podcast. Is it a good investment? Is it better than income properties? As podcast veterans know, Jason is not a gold bug, though he does consider it to be a safer bet than the U.S. dollar. So, if you have money sitting in a savings account, gold would be better than that but still pales in comparison to real estate.
Here are five major flaws we see in gold or any other precious metal.
1. You can’t get financing on gold, at least to any appreciable extent. Rental properties excel at maximizing leverage.
2. You can’t rent it out. Gold does not produce rental income, which makes it speculation rather than an investment, in our book.
3. Subject to confiscation. Think gold won’t be confiscated? It happened once before in 1933 and who’s to say we won’t see a ‘do over’ some day? That’s a set of dice we prefer not to roll with our investments. When the government gets desperate to fund runaway spending, guess where it’s going to come looking? The citizens. Don’t believe the silly fallacy that your gold is safe. FDR proved it’s not.
4. No tax benefits at all when you own gold. Real estate is the most favored tax asset in America.
5. Gold can and is being manipulated by the Federal Reserve and other central banks around the world. Go to www.GATA.org to learn why these entities are interested in suppressing the price of gold.
There you have it. Gold is not the absolute worst investment. For that, you need to stock up on currency. However, for the five reasons we stated above, Empowered Investor believes that income producing rental properties are a far superior investment for any person who wants to establish financial independence in this lifetime.
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