I was about to buy when I heard miners are tapping their emergency high grade deposits which is resulting in a surge in production.
The main thing is I just can't see it any lower.
Buying gold today is better than buying when it was $1800, but where's the yield?
You can buy a cash flow positive home with 50K down in Australia, and it's pretty much guaranteed you will own the home outright in 25 years with very little (if any) contribution. I doubt 50K of todays gold will buy that same house in 25 years time..
who wrote the article? At the onset it states it was written by Kris, yet it's signed off by Jason Stevenson. Maybe it was written by Tyler Durden.
Two different articles I think Mel
mel
11 Dec 2013, 07:30 AM
Buying gold today is better than buying when it was $1800, but where's the yield?
You can buy a cash flow positive home with 50K down in Australia, and it's pretty much guaranteed you will own the home outright in 25 years with very little (if any) contribution. I doubt 50K of todays gold will buy that same house in 25 years time..
50k of the right gold miner shares could blitz the return on the property. Easier to trade in and out of and change investment portfolio as conditions change too.
I have rebalance my super and share portfolios to go heavier on pm miners.
Investment portfolio in forum has had a change made too, will post up later today.
There are some people who seem angry and continuously look for conflict. Walk away, the battle they are fighting isn't with you, it's with themselves.
The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it. The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.
Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
Buying gold today is better than buying when it was $1800, but where's the yield?
This has been explained to you many times before, but for the sake of those readers unaware of the reality, I will explain it again. What you consider yield is actually built in as far as gold is concerned. As things age they degrade, like houses, and need maintenance. Maintenance costs and detracts from yield. Gold does not suffer this yet over the millenia it has gone up in price with CPI. Why? Because it is in demand, as money, and the cost of extracting it has gone up and up.
If you buy a house with borrowed money it takes a decade or more before your see any yield come into your pocket ( IO loans not withstanding) Then as you see yield come to you, and you are faced with 2 choices.
1/ spend it on something other than the property 2/ Re-invest it into maintaining and upgrading the property.
Most landlords choose option 1. and see their capital value fall and fall relative to all the other properties in the street and the owners of the other properties put decks on and build new kitchens and driveways, carports, etc etc etc. In 20 years or 30 years time when they hope to sell it they discover that it has not doubled in price as they had hoped because now it is the shittiest house in the street.
The sprukers at the property seminars left out many home truths when they suckered the current crop of speculators into buying property and this is just one of them. The most obvious one was that property doesn't always double in value every 7 or 10 years, but I think most speculators here are already aware of that home truth
Shadow was hopelessly wrong about the Gold Bull Market. What else is he wrong about?
This has been explained to you many times before, but for the sake of those readers unaware of the reality, I will explain it again. What you consider yield is actually built in as far as gold is concerned. As things age they degrade, like houses, and need maintenance. Maintenance costs and detracts from yield. Gold does not suffer this yet over the millenia it has gone up in price with CPI. Why? Because it is in demand, as money, and the cost of extracting it has gone up and up.
If you buy a house with borrowed money it takes a decade or more before your see any yield come into your pocket ( IO loans not withstanding) Then as you see yield come to you, and you are faced with 2 choices.
1/ spend it on something other than the property 2/ Re-invest it into maintaining and upgrading the property.
Most landlords choose option 1. and see their capital value fall and fall relative to all the other properties in the street and the owners of the other properties put decks on and build new kitchens and driveways, carports, etc etc etc. In 20 years or 30 years time when they hope to sell it they discover that it has not doubled in price as they had hoped because now it is the shittiest house in the street.
The sprukers at the property seminars left out many home truths when they suckered the current crop of speculators into buying property and this is just one of them. The most obvious one was that property doesn't always double in value every 7 or 10 years, but I think most speculators here are already aware of that home truth
My problem with gold is that apart from a little jewellery no one actually NEEDS it whilst we do NEED food clothing and shelter.
What will happen when the Indians and Chinese realise that the rest of the world no longer values gold nor accepts it as a common form of payment. When they lose interest as they become more educated and sophisticated, the value of your investment will become almost zero. It's value will depend upon how much young girls want pretty shiny things to adorn their bodies. It could end up depending on fashion trends - huge today and zip tomorrow.
At the moment your investment relies on the dumbing down of about 2.5 billion people who live in two countries who are developing and becoming educated at breakneck speed. Can't you see the writing on the wall for gold long term? All those people won't stay ignorant forever.
This has been explained to you many times before, but for the sake of those readers unaware of the reality, I will explain it again. What you consider yield is actually built in as far as gold is concerned. As things age they degrade, like houses, and need maintenance. Maintenance costs and detracts from yield. Gold does not suffer this yet over the millenia it has gone up in price with CPI. Why? Because it is in demand, as money, and the cost of extracting it has gone up and up.
If you buy a house with borrowed money it takes a decade or more before your see any yield come into your pocket ( IO loans not withstanding) Then as you see yield come to you, and you are faced with 2 choices.
1/ spend it on something other than the property 2/ Re-invest it into maintaining and upgrading the property.
Most landlords choose option 1. and see their capital value fall and fall relative to all the other properties in the street and the owners of the other properties put decks on and build new kitchens and driveways, carports, etc etc etc. In 20 years or 30 years time when they hope to sell it they discover that it has not doubled in price as they had hoped because now it is the shittiest house in the street.
The sprukers at the property seminars left out many home truths when they suckered the current crop of speculators into buying property and this is just one of them. The most obvious one was that property doesn't always double in value every 7 or 10 years, but I think most speculators here are already aware of that home truth
thank you for explaining that gold does in fact have a yield, I had no idea
Hey, while we're at it why not also consider the opportunity lost via earning interest on those worthless fiat dollars?
Look, someone can buy a positive geared house which needs no work for 50K cash deposit on a P&I loan. In 25 years the house will be owned outright. How does holding 50K worth of gold compete with eventually owning a house for 50K AUD? Being an inflation nut im sure you would agree rents and house prices will rise over time..? even if they didn't it would still work in favor of the IP
Poontang
11 Dec 2013, 09:27 AM
50k of the right gold miner shares could blitz the return on the property. Easier to trade in and out of and change investment portfolio as conditions change too.
I don't doubt it Poons, but picking the right one represents risk, whereas the IP is pretty much guaranteed to be paid for by the tenants
This has been explained to you many times before, but for the sake of those readers unaware of the reality, I will explain it again. What you consider yield is actually built in as far as gold is concerned. As things age they degrade, like houses, and need maintenance. Maintenance costs and detracts from yield. Gold does not suffer this yet over the millenia it has gone up in price with CPI. Why? Because it is in demand, as money, and the cost of extracting it has gone up and up.
If you buy a house with borrowed money it takes a decade or more before your see any yield come into your pocket ( IO loans not withstanding) Then as you see yield come to you, and you are faced with 2 choices.
1/ spend it on something other than the property 2/ Re-invest it into maintaining and upgrading the property.
Most landlords choose option 1. and see their capital value fall and fall relative to all the other properties in the street and the owners of the other properties put decks on and build new kitchens and driveways, carports, etc etc etc. In 20 years or 30 years time when they hope to sell it they discover that it has not doubled in price as they had hoped because now it is the shittiest house in the street.
The sprukers at the property seminars left out many home truths when they suckered the current crop of speculators into buying property and this is just one of them. The most obvious one was that property doesn't always double in value every 7 or 10 years, but I think most speculators here are already aware of that home truth
I'll have to disagree with this view.
Property can be cashflow positive immediately it is bought (rare but possible), can be renovated to make it cashflow positive immediately on completion of work (possible but requires some brains), or can be chosen to be cashflow positive within 3-5 years (not hard at all).
Maintenance, despite what some people say, is not a large amount in the context of the cashflow. And remember, once the property is cashflow positive it can be paying itself off. I have 1 property which will be owned outright in about 9 years which I have not contributed ANY of my own money into.
There are many different strategies one can adopt with property, just as there are with other asset classes. It doesn't make sense to simply compare returns without considering the strategy being employed, and the implications (such as leverage, tax, etc).
50k of the right gold miner shares could blitz the return on the property. .
I find that very hard to believe. Calculations please, taking into account CF+ property and weekly rent of said property
Quote:
50k of the right wrong gold miner shares could have your arse handed to you on a plate.
Corrected for you
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