My crash course in physical gold bullion
It’s been a while.. my travel trip has been put on hold another year due to financial “issues” (ie not being able to sell my house) and I’m rapidly running out of patience with this whole Eurozone crisis, the sun isn’t where it should be despite the calendar telling me it’s summer and I don’t own physical gold. Yep – hard to believe eh?
What the hell am I talking about?
Until recently I knew nothing of gold other than my ex-wedding band and a few earrings. Now I’m some kind of green-eyed goldbug.
OK – it began back at school – there was this girl in my year, I’ll call her Kelly – and she was the class rebel – lots of hairspray, cigarettes in the playground, too much eyeliner and at least one detention a week.
Her hopes and prospect’s weren’t good. I on the other hand was a perfect model school angel, sat at the front, homework always in on time, straight A’s, more A-Levels than I know what to do with.
Yet somehow Kelly and I were friends. Sure not the closest of friends and when I went off to university we kind of parted company and I always imagined she’d end up working in MacDonalds. I’m such a snobby cow.
We hooked up again in 2006. I remember it because I’d just sold a house for double what I paid for it a mere 24 months earlier and I was in the ESPC (a kind of cooperative realtors office) feeling kinda smug and looking for my next purchase.
There she was – Kelly – and I can’t say I wasn’t a little stunned at how gorgeous she was looking. I’m no expert on fashion but she was wearing good cloth. We made some small talk and I managed to shoehorn into the conversation my recent financial success – I was afterall now feeling a little deflated next to this 6 foot in heels slender toned and tanned person.
Turns out she’d just sold her house too and for the same amount as me – £300,000.
I asked her what her next project was going to be. This was the time of house flipping remember.
“Oh no – I’m getting out of property” quoth she.
“What? Are you mad!” returned I, flabbergasted at her financial stupidity.
“No, I’m getting out – that’s me – the housing market’s had it. I’m buying gold”
Well, shall I say we agreed to differ! I was about to put my £300k into a new property, do some work on it and hopefully clear another £200k. I’d be a half millionaire and the world would be good. Kelly was going to buy jewellery?
We had a coffee and muffin (or I should say I had a muffin) and she gave me her theory on the property market, the dollar, excess lending, gold spot prices, gold bullion, platinum and other words and acronyms I didn’t fully comprehend. Who WAS this girl? Do they teach this stuff at Macdonalds these days?
After my scrummy blueberry muffin and caffeine fix, we air kissed and I went back into the ESPC and Kelly walked off down the street, hips swaying, the red soles of her 8 inch heels clearly visible.
So that was then.
Here we are now midway through 2012. Six years have passed and guess who I bumped into again yesterday?
Whereas I’ve expanded and seemingly lost a few inches in stature, Kelly must now be pushing 7 foot. My sun-damaged wrinkles looked upon her flawless complexion with the kind of jealously that would only be beaten by what was about to come.
I know almost nothing about cars other than Land Rovers and yet I knew that the white convertible she slithered out of was a classic Mercedes as driven by Stephanie Hart. Her clutch bag contrasted interestingly with my M&S “bag for life”.
I asked her politely how it was going – although it was pretty clear the answer was “very well”.
Again, like some clunky anecdote from Rich Dad Poor Dad we chatted about property. She was renting and I was still trying to sell the house I’d bought in 2006.
“What about your gold investments?” I asked, almost afraid to learn the truth.
She’d taken her £300,000 and bought physical gold coins. I’d pictured gold bullion as big bricks like in Goldfinger, turns out they’re more like pirates treasure. They’re legal tender and so there’s no VAT or capital gains tax on the investment (who knew!?) She’d bought at $550 an ounce. She sold them last year at $1800 an ounce.
This rebel from school had made £1,000,000 in a recession whereas I was looking at potential negative equity. She paid no tax. She took her £1,000,000 and put it in the bank to “just sit”.
Apparently she’s now buying gold in £10,000 lumps again but waiting for the gold spot price to fall below $1500 oz and expects it’ll do so within the next month – then she’s going to put the lot back in, expecting at least a 25% increase by mid 2013 with a $4000 oz price potentially within the next 2 years. She gave me the web address of a company offering a free gold investment guide – so I grabbed it.