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Why Insure Your Business with Physical Gold

Why Insure Your Business with Physical Gold

With the unemployment rates skyrocketing as we speak, business owners and individuals have to adopt practical business models not only to run a profitable business but also to protect their assets. In order to become and remain self-reliant and financially independent, we should insure our existing wealth against the fluctuations of the global economy.

As a wealth protection strategy, investing in precious metals has gained considerable popularity all over the world. Central banks, large corporations, small business owners and individuals are getting more and more interested in using gold as an asset.

Some have already turned to gold and silver bullion as reliable wealth protection hedges. Others go through their rare coin collections and have them evaluated by reputable coin dealerships to determine if they are valuable enough to serve as wealth protection assets.
All in all, gold insurance is definitely an idea worth considering.

Why gold?

Investing in precious metals, most notably gold, is far from being the only actionable method of protecting your business and wealth. Other hedges include offshore bank accounts, cryptocurrency, physical land, and second passports. However, gold is largely thought to be the most effective way to ensure financial stability.

Namely, data published by the World Gold Council shows that gold is a global champion against inflation and devalued currency. It was revealed that central banks started purchasing physical gold (bullion and coins) on a massive scale in 2014. What’s more, the demand for gold bullion and coins keeps growing. It’s a clear sign that wealth building giants see physical gold as reliable wealth protection assets.

Other than that, physical gold is typically not affected by the price fluctuations so it can retain its purchasing power. That is why it can serve not only as a wealth protection asset but also as a long-term inflation hedge. This can’t be said for paper currencies. For example, the US dollar has lost around 98% of its purchasing power in the past century, whereas an increase factor of 60 was recorded for physical gold.

What about interest?

While it’s true that gold is relatively inefficient at earning interest straight away, recent changes have put that argument to rest. Namely, major economies such as Sweden, Japan and Switzerland adopted the Zero and Negative Interest Rate Policies, which roughly meant that bank clients would either earn no interest on the cash they keep in the bank or they will ultimately even have to pay for it.

Why physical gold?

Physical gold, such as bullion or coins, is considered an actionable non-financial wealth protection asset. This type of asset fulfills three main functions:

  • to serve as a medium of exchange,
  • to serve as a storage of value,
  • to provide account of economic transactions.

What’s more, gold bullion and coins have extra benefits. Not only are they tangible and finite assets, but are also relatively scarce. Additionally, since governments and central banks don’t issue gold, owning gold bullion and coins involves zero counterparty risks.

Final word

As an independent business owner with a view to building a sustainable and lucrative business, it might be a good idea to consider different wealth protection and insurance strategies. Getting thoroughly informed is paramount. Only then can you come up with a solution that would best fit your business model.

About Author Mohamed Abu 'l-Gharaniq

when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries.

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