We are often told by so-called experts that the best an investor can hope for is put his or her money into the stock market and simply wait. If wisdom regarding personal finances is a valuable commodity, this particular crop should have never been harvested. An individual with 100% of their portfolio in stocks might as well put that money into a life insurance policy.
In fact, I had an enlightening conversation with an insurance agent last night about the appeal of permanent life insurance as a financial instrument. What it revealed to me was that gold is actually the ideal form of life insurance!
Gold as Life Insurance
The underlying logic of buying life insurance is twofold: your loved ones (or whomever is the beneficiary) receive compensation when you pass away, and you can actually use the policy as a financial instrument in the meantime. You can borrow against your policy, using it as collateral, among other strategies.
Essentially, these are the two goals of life insurance. On the one hand, you have a powerful financial instrument to use in the short- or medium-term; on the other hand, you are planning for the financial well-being of your dependents down the road. No matter what else happens (in life, in the markets, and so on), your children and grandchildren will be covered.
After listening to this, it hit me: Isn't this exactly why many long-term investors buy gold? This insurance agent, an earnest and well-meaning fellow, wasn't trying to deter me (or any client) from pursuing other investments. He was simply pitching life insurance as a viable "bedrock" for your financial present and future. He had a great point—and it reminded me that gold bullion is the best possible bedrock for your wealth.
Financial Future—and Present
When I think about planning for the financial future, I'm generally most concerned with stability in the face of volatility. Nobody can guarantee how much they will be earning or how well the markets will be performing during their prime working years, but if you can plan accordingly ahead of time, you can know precisely how much money you've saved or invested for retirement and beyond.
Any form of wealth preservation, whether it is an investment in an asset, life insurance, or precious metals, is a plan for down the road. That may mean paying for one's retirement, but more often it entails helping one's children to buy their first home, or covering their grandkids' college tuition. Gold has long been recognized for its viability as a store of wealth in this manner.
At the same time that an investor is saving for the future, gold provides diversity and an inflation hedge in their portfolio. Obviously, it's an asset that can be sold, leased, or leveraged. In other words, gold is a financial tool in addition to being its own form of an "insurance policy." There's certainly value to life insurance as a financial product, but gold is the ideal safety net that boasts the dual benefit of playing a key role in one's present financial circumstances.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.