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You are here: Home / Finance / A Beginner’s Quick and Easy Guide to Investing in Gold
A Beginner’s Quick and Easy Guide to Investing in Gold

A Beginner’s Quick and Easy Guide to Investing in Gold

January 19, 2022 By Cade's Team Leave a Comment

Amid the economic uncertainty caused by the pandemic – including stock market volatility and fears of a recession – gold is rallying. According to CNBC, gold prices surpassed $1,800 per ounce last year and are only expected to rise.

For many experts, this means that now is a great time to invest in gold. But how should you get started? Below, check out this beginner’s complete and easy guide to investing in gold.

How the gold market works

The gold market looks different today than it once did, in the age of the California Gold Rush or when the U.S. still relied on the gold standard. Today, most currency is fiat currency (including the American dollar), which means its only worth comes from the government backing it. Fiat currency is not backed by a physical assets, like gold or silver.

However, gold is still prominent in the global economy in the form of jewelry, collectibles, bars and bullion, and even in industry as a conductor of heat. This market landscape offers investors a broader range of investment options than ever before.

Is investing in gold a good investment?

Investing in gold can absolutely be a good investment if done correctly. Because gold prices (like those of other commodities) tend to rise in inverse relation to stocks, gold is a popular “safe haven” investment for bear markets and recessions.

In other words, it can be a great way to diversify your portfolio and hedge against the volatility of stocks.

Recently, the issuance of trillions in stimulus packages has pushed the country to near its debt limit, which is the legal limit on the amount of debt the country can incur. This has caused the US to make a decision on whether or not to raise the national debt limit. Raising the debt limit would authorize more spending to cover the country’s debts. This is sort of like raising the country’s credit limit. A lack of action could cause the US to default, raising concerns about a financial crisis.

The US dollar is not a finite resource, nor does it have any intrinsic value, since it hasn’t been backed by gold since 1972. Because of this, many investors have flocked over to alternative investments like gold and cryptocurrencies.

You don’t get into gold for an instant profit, but rather for diversification and security against volatility. It can be a good long-term investment strategy.

How do I start investing in gold?

There are many different ways to invest in gold, but some are easier ways for beginners and individual investors to get started, while others offer more stability, protection, or financial upside.

Gold investment options for beginners

Streaming and royalty companies

Streaming and royalty companies are considered by some to be the best option for investing in gold. This investment option is less risky than even stocks, mutual funds, or ETFs, largely because returns are based on a fixed percentage rather than the profitability of the mining company.

What are streaming and royalty companies? They essentially act as the financial backers of mining companies. Because of the high risk involved in mining due to price fluctuations, miner strikes, accidents or natural disasters, and more, mining companies often have trouble getting funding. They also require a lot of capital to get up and running.

Streaming and royalty companies provide funding for the operation in exchange for either a fixed percentage of the mining company’s revenue (royalty companies) or physical metals (streaming companies).

The streaming or royalty company is guaranteed to receive a fixed percentage of revenue no matter how much the miner profits, without incurring the risk of operating the mine. This makes investing in streaming and royalty companies more secure than investing in mining company stocks.

Stocks, mutual funds, and ETFs

Because of the nature of the stock market, gold and gold-mining stocks, mutual funds, and ETFs all come with risk. However, they can provide some simple and low-cost investment options.

For example, gold-based ETFs can be an alternative to investing in physical gold. These ETFs have the advantages of diversification across many companies, ease of ownership in a brokerage or IRA, and no need for individual company research.

However, not all gold ETFs operate the same way. Some invest in indexes, some are tied directly to prices, and some are actively managed, like mutual funds.

Remember that mining is an inherently risky business, meaning it’s also risky to invest in. Although gold mining gives you exposure to other precious metals besides gold – which can provide some cushion if gold prices fall – it’s still important for you to carefully research any companies you plan to invest in and/or the prospectuses of the ETFs you’re considering.

The downside of gold ETFs is that you won’t actually own physical gold. With this approach you will own a paper asset instead of a hard, physical asset. In times of economic crisis, physical assets are generally considered to be a safer haven.

Gold investment options to avoid

Jewelry

Close to 50% of the global gold market goes toward gold jewelry. Sounds promising, right? Unfortunately, investing in gold jewelry is not a great option. This is because, in addition to prices being highly dependent on fluctuating supply and demand, gold jewelry is marked up astronomically before being sold.

This means the person who makes the most money is the jeweler, not the investor.

Physical gold

For the right person, investing in physical gold can be the safest move, because this is the only way to own the precious metal itself. Having physical assets can be more secure than stocks, which are sensitive to changes in the economy.

However, it is worth noting that investing in physical gold like bullion, bars, and coins can involve dealer costs and potentially shipping fees. Likewise, there can be markups in physical gold.

Of course, it also requires storage, which can be a burden if you own a large amount.

Futures contracts

Typically, futures contracts in any industry are only good for very experienced investors. This is because futures trading involves agreeing to pay a fixed price for a certain amount of a commodity at a given time. If the price of the commodity falls before that time, your contract could become worthless and you could lose everything.

Gold futures are only recommended to investors with lots of experience, industry knowledge, and capital they can afford to lose.

How much should you invest in gold?

As with any investment, you never want to put too many eggs in one basket, especially if you’re a beginner. Most experts agree that you should put no more than 10% of your portfolio into gold, and buy small amounts over time.

On the other hand, financial experts like Robert Kiyosaki, author of the best-selling personal finance book of all-time, Rich Dad, Poor Dad, calls gold “God’s money.”

He points out that physical gold has been a reliable investment and store of value across all of time, history, and geography.

Investing in Gold

Investing wisely requires that you pay close attention to the numbers. Before making a decision, carefully weigh the pros and cons of each investment option against your own goals, investment experience, and budget. The World Gold Council provides great resources, including detailed tracking of gold prices so that you can make informed decisions.

Want to stay in the loop? Join nearly two million other readers who are learning how to increase income, invest for cash flow, skyrocket confidence, and so much more.
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Filed Under: Finance, Gold and Silver, Investing Tagged With: gold

About Cade's Team

Cade Hildreth is an LGBTQ+ entrepreneur, real estate investor, and former USA Rugby Player. Cade has founded 7-figure businesses, scaled websites to millions of views, acquired a portfolio of income-producing residential and commercial real estate assets, and played rugby worldwide.

As a world-class athlete, Cade has represented the USA Rugby Team, trained extensively at the Olympic Training Center, and played with elite squads from across New Zealand and Australia.

Often compared to Tim Ferriss and Ramit Sethi, Cade teaches millions to expand financially, while living an authentic and adventurous life.

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“As an LGBTQ+ entrepreneur, real estate investor, former USA Rugby Player, and fitness fanatic, I’ll teach you what your parents and teachers should’ve taught you, but didn’t know themselves.” -Cade Hildreth

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Or, listen to Cade’s articles on the go as a Podcast.

Because it’s the New Year, let’s talk about ch Because it’s the New Year, let’s talk about change...

For a long time, I’ve thought about top surgery. I remember when I was 6 or 7 years old when I wanted to run around outside on a hot, sunny day with my shirt off…and I first saw my parents… hesitate. Ughh. 

It wasn’t their fault but I still remember that heart wrenching feeling. To their credit, they ultimately said, “Ok, go do it!” While I did “do it”, I remember the feeling of shame that crept in.

Over the years, being in affirming sporting/rugby circles helped suppress the urge to get top surgery, but it never quite “stayed down.”

So last summer I got keyhole #topsurgery. I’ll talk about recovery in another post because it was definitely weird to not strength train for months.

But in THIS post, I want to share two things:

1. I am SO grateful to my wife Erin for being the supportive and growth oriented partner that she is. 🥰🙏❤️ 

She is now following her call to get a divinity degree and she’s already working in ministry as a Pastor in Training at an incredible, inclusive Presbyterian church here in Virginia. I am grateful to her for supporting me as I become more and more of who I am—and I’m enjoying watching her do the same! Love you, babe!

2. Second, I’m grateful to get to share who I am with my family. This summer we took a trip to Madden’s resort in MN to celebrate my parent’s 50th wedding anniversary. (It was actually their 52nd, because we had to postpone it twice due to Covid.)

I was nervous to be in the pools and lakes around them, but I could feel it was my only choice because I knew I wanted them to “know me”. And, how could that happen if I “hid me”?

Ultimately, I have to tell you…it was freeing to be me, as I am, who I am. 

I had the BEST time splashing around and biking and goofing around with my wife, niece, nephew, & sister. 🌊🏖🐟

So, I suppose, this is a gratitude post to thank those who have supported me over the years as I become more and more of who I am. 

Top of that list is my wife, Erin, but there are countless others. ❤️

If you’re reading this, thank YOU for being one of those people in my life too. I am deeply grateful. 🥹
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#lgbtqfamily #nonbinary
How to set a boundary? 🤔 . . . . #lgbtqia #lgb How to set a boundary? 🤔 
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#lgbtqia #lgbtqcommunity #emotionalhealth
What do you do if you’re telling a past story ab What do you do if you’re telling a past story about someone who has transitioned? 🤔 Share a 💯 if you agree ➡️🏳️‍⚧️🏳️‍🌈
7 things I got clarity on in 2022: 1. Good and b 7 things I got clarity on in 2022: 

1. Good and bad are labels. All things are experiences. 

2. Maturity is taking full responsibility for oneself. 

3. Having a loving, conscious relationship with myself is a core value. 

4. Emotions do not mean that anything has to be done. 

5. When I am in congruence with what I want, I have it. 

6. I have permission from myself to stop doing anything that doesn’t lead to my peace and empowerment. 

7. Stepping toward emotions and being able to feel them is a superpower. It determines the quality of my life. 

(Are there any above that you’d like me to further explain?)
 
Most importantly, which # above resonates with you? ⬆️

Happy New Year, y’all! 🎊🥳
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#lgbtqcommunity #lgbtqiaplus #lgbtsupport #nonbinary #trans #selfgrowth
Interview with Jenny Nguyen, Founder of the Sports Interview with Jenny Nguyen, Founder of the Sports Bra—The World's 1st Bar to Only Play Women's Sports - shorturl.at/doGHZ

I'm excited to introduce you to today's #podcast guest, Jenny Nguyen, who is a professional chef, elite athlete, and entrepreneur.

I invited Jenny onto the podcast because she has done something extraordinary that is long overdue: She has opened up a sports bar that exclusively plays women's sports!

Despite extensive research, Jenny hasn't found another sports bar worldwide that ONLY plays women’s sports.

Given that it's nearly 2023, this is mind-blowing. As a lifelong athlete, I find her vision compelling and inspiring.

Aptly called the "The Sports Bra", the venue is putting Jenny's culinary skills on display alongside women's sports worldwide.

The Sports Bar has taken its mission a even further by partnering with and elevating other local, women-owned businesses.

Specifically, it:

1. Sources its grass-fed beef from @CarmanRanch, an ranch run by Cory Carman, a third gen rancher out of Wallowa, Oregon).

2. Sources its alcohol from Freeland Spirits, an all-women owned and operated distillery out of NW Portland.

3. Has furniture built by @girlsbuild_org, a non-profit organization headed by @ktmhughes in Portland, OR, that teaches carpentry and construction skills to young girls as a path to empowerment.

Since opening the Sports Bra this April, people have come from ALL over the U.S. and the world to experience it—including many professional female athletes.

To learn more about Jenny as she makes history, features women's sports, and elevates women-run businesses, listen to the episode here:

shorturl.at/doGHZ

Or, you can check out the Sports Bra at:

@thesportsbrapdx
TheSportsBraPDX.com/

Have you heard of the Sports Bra or been out to experience it in person?

#lgbtqiaplus #womenownedbusiness #lgbgtqia #lgbtqcommunity #womenssports #womeninsport
Over this recent holiday stretch, we… - enjoye Over this recent holiday stretch, we… 

- enjoyed some quiet time at home
- got a sauna delivered (but not yet installed)
- decorated for the holidays
- baked a bunch
- visited our favorite farm
- did some sight seeing
- and perhaps, most importantly, survived the cold snap along with our feather friends (who lived in the garage for a few days so we could heat them with a space heater) 🥶🐔

How have the holidays treated you…and did you get hit by the winter storms? ❤️🎁☃️❄️
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