I just want to start by saying I wrote this at work back on September 9th, 2010. Although today’s gold price goes against my article, my article still proves true today.
Why invest in gold? You shouldn’t in my opinion. It is too late in the “bad” economy game to invest in gold now. Gold prices are at their high point in years and even if they keep going up, the old saying stays true, “the rich get richer and poor get poorer.” Unless you have the funds necessary to tie up in gold at its current prices, you will never make money on it. You would need to invest too much money to actually profit today. As of September 9th, 2010, when I wrote this article, gold dropped $11 to $1244. That means for every ounce of gold you purchase, you need at least $1244 to purchase it. Once ounce is not a lot, but to most people, $1244 is. If that ounce was to rise to $1300, which we know today was possible, you would only profit $56 if you paid $1244 and if you were able to sell it for $1300 with no fee’s involved. That is why it costs too much to invest in Gold. On the flip side, silver is very low compared to Gold, hovering around the 18 to 19 dollar mark as of September 9th, 2010. Although the $56 profit from the one ounce of Gold was close to a 5% return, which you will not see at any bank for years to come, it is still too much of a risk to invest in gold now when it is now $1400 per ounce, as of today November 10th, 2010. If you have debt, why not take that same 1200 to 1400 dollars and pay down your debt. You won’t be making a 5% return, but you won’t be paying a 20% interest on your credit card balance either. When it comes to investing, a lot of people don’t see their debt as the main issue. They want a return on their money but forget that their debt is working hard against them. When you can pay down a car payment, a credit card, or add extra to your mortgage, why not do that instead to ease your debt instead of your return? This is not the time to invest in anything. This is the time to cut spending, fix your budget, and if you have that extra money, pay down your debt so that you can get that car payment or mortgage off your back. You will be amazed how much money you can save once that car payment goes away. There are smarter ways to save and make money other than investing. You just need to sit with your banks free financial officer to find out what will work best for you.
I encourage comments to refute my opinion and proof that investing today is better than losing your debt tomorrow.