In both Canada and the U.S., personal and household debt is at worrying levels. The New York Times reported that in 2017, Americans accumulated more credit than they had even at the peak of the credit bubble that preceded the 2008 recession. Even more concerning – Americans owe more than $1 trillion in revolving debt, a.k.a. credit card debt. Credit card debt is often high-interest, unlike a mortgage or a business loan, and you don’t borrow the money to add to your overall wealth or bring in income. The purchases you make with credit card debt can’t be used to help pay it back. This news has some economists worrying about a new wave of defaults caused by credit card debt, student loans, and risky car loans, but what does it mean for you?
Getting your debt under control and starting to save should be your first priority for building a healthier financial future. But once you start saving, you have to answer some tough questions; namely, what do you do with money you don’t intend to spend? Don’t just let your money sit idle in the bank, put it to work for you and invest.
Two of the big concerns people have when they begin investing, especially smaller amounts of money, are liquidity and risk. Liquidity is similar to access; how quickly and easily can you convert your investment back into cash. Risk means how likely you might lose your investment, or that your investment will be smaller than it started – not something you can afford if you’re saving for retirement.
Buying Physical Gold
One way to save that can help with both liquidity and risk is buying gold bullion, which is both easy to sell and, over the long term, known for maintaining or increasing in value. Gold dealers make buying gold online convenient and secure. You lock in your price, pay by any number of means including Interac online, e-transfer, credit card, or even Bitcoin. When you buy gold, it’s sent to you as soon as your payment clears, in a discreet package that’s tracked and insured; they have a large inventory that lets them send your silver and gold bars and coins immediately. They can also provide storage solutions if you’re worried about keeping your silver and gold investments at home or in a safety deposit box – which may not be as secure as you think.
Gold bullion is a fairly liquid asset, and the only real limitation to finding a buyer when you want to sell gold is their liquidity. Trading with a gold dealer can help make this process quick, too. Better gold dealers have “deep liquidity,” meaning they can buy higher quantities of gold without having to raise the money.
Investing in Gold thru ETFs
Gold ETFs act like individual stocks and trade on the stock exchanges just like stocks. Instead of owning physical gold, your investment holds gold derivative contracts that are backed by physical gold.
Gold ETFs provide some of the same benefits to your portfolio as bonds do and tend to rise in value as the dollar weakens.
Investors put their money in gold because it’s a protection against inflation and it performs well when stock markets don’t. If you’re worried about finding a low-risk, liquid asset for your savings, buying gold may be a good option. As your savings grow, it’s an effective way to hedge against inflation or a declining dollar.