Why Physical Gold Ownership is Such a Pain in Your Back Pocket

Investing in gold is great for avoiding the pitfalls of placing trust in world markets and paper currencies. In fact, that’s exactly why physical gold has been seen as one of the best long-term investments for so long. However, this timeless investment strategy isn’t without its own headaches and hassles.

For one, the financial cost of gold ownership can take its toll on your wallet for several reasons:

  • Middlemen and dealer markups/fees
  • Delivery costs (i.e. hiring a secure transportation company to deliver your gold purchases to your doorstep or your bank)
  • Storage expenses (either through your bank’s vault or setting up your home for secure storage)
  • Insurance coverage premiums

Of course, we’re not trying to talk you out of buying physical gold; we’re just making sure you know what you are getting into. In the long run, it’s important to keep in mind that hard assets trump paper investments every time.

As Seeking Alpha states:

If the stock market goes south, all your paper investments will become just that – paper. This is why you want to have something tangible, something that has intrinsic value (unlike paper, whose value is derived from some underlying asset).

Also, it is important to know all of your options when it comes to owning physical gold. For instance, “pooled” gold offers all of the benefits of gold ownership, but without the financial cons listed above.