Wealth Inequality in America—Protect Your Wealth With Gold

Lines of gold bars

When evaluating the state of wealth in America, economists look at more than just your bank account. Wealth includes salary, savings, property, investments and other assets minus any liabilities. Liabilities may include unpaid debt such as student loans, credit card debt, medical bills, mortgages, etc.

With these calculations, reports have found that the U.S. is one of the most unequal countries in terms of wealth inequality.

In 2007, the top 1 percent owned over a third (33.8 percent) of America’s entire wealth and the bottom 50 percent owned just 2.5 percent. Another stark statistic shows that in terms of investing, the top 1 percent owned half of all stocks, bonds and mutual funds; whereas, the bottom 50 percent owned only .5 percent of all U.S. stocks, bonds, and mutual funds.

To add insult to injury, then the housing market crashed, broadening the gap between America’s richest and poorest.

Diversification is Key to Maintaining Your Wealth

The 2008 financial crisis only worsened the wealth inequality in the U.S. Because the main asset of the bottom 90 percent of Americans was their principal residence, the housing market crash only lowered their net worth.

In order to protect yourself from similar market crashes in the future, it’s important to diversify your wealth.

For many Americans, property, savings and retirement funds are the key assets individuals use to accumulate wealth. For the most part, these assets are low-risk. But as the financial crisis of 2008 showed us, even low-risk investments can come at a cost.

Savvy investors look for further diversification to create security for their wealth. Consider creating an investment portfolio that offers other ways to allocate your wealth and make gains.

Gold and Silver Offer Means of Diversification

One such investment that’s considered safe and reliable is in the precious metal markets. Precious metals such as gold and silver offer security in times of economic crisis. Many investors chose to allocate part of their investment portfolio to precious metals, like gold or silver bullion, in order to diversify their investments in secure commodities.

If you’re looking for a stable investment not linked to stock market volatility, precious metals are a great option. A good rule of thumb is to allocate 5-10 percent of your investment portfolio to precious metals, as a means of insurance against market crashes or inflation.