The secret from 1 gram to 1 kilogram
This may appear small, but the impact is indeed powerful. I am referring to the ‘1gram per month’ strategy where it is done as a forgotten saving. This has been the habit of most gold savers, including myself. Whenever I have additional savings which I intend to save for the long term, I convert them into gold without looking at the price too much. As of this writing, I have yet to sell the gold which I have accumulated thus far, but I have withdrawn a few gold bars based on my preferred designs provided by Public Gold.
Though from a gold trader point of view, they are more profitable by leveraging the gold price movement and performing some form of technical analysis, gold savers would profit more eventually based on observations. The following are the reasons why:
- They own more grams of gold (due to consistent savings)
- Their savings are not spent away but got converted into gold
- The gold price gets averaged over the long term (due to consistent purchase)
- They tend to realise more profit in the long run.
Habits determine wealth
This is akin to the race between tortoise and hare. Though the tortoise seemed to stroll at first, it won the race eventually.
Was it due to luck? Not because it was running faster either, but due to being consistent.
Those who embark on the ‘1 gram per month’ method are like the tortoise in gold savings. The progress appears slow, but they will eventually win the race. By the time we do this consistently for a year, we would have accumulated a total of 12 grams, at least.
Based on what I have seen and heard from fellow gold savers when they save using this method, they end up owning more than 12 grams of gold after doing it for a year. Why do you think so? Because gold saving became a habit. This is precisely why gold savers would end up being more wealthy, echoing the saying of Dave Ramsey as follows:
“Personal finance is 80% behaviour and only 20% head knowledge.”
Even if we are progressing slowly, we would still win the race due to consistency.
Tips in saving 1 gram per month
Those who wish to start this method can integrate the following strategies to make it more effective:
- Have a target in mind that this 1 gram that is purchased every month is nothing more than a forgotten saving. Meaning, once deposited, we forget about it. Other savings can be kept elsewhere using other available tools
- Upon receiving a salary, straight away purchase one gram, which means not with extra money that may or may not be there. If the push factor comes from having extra money, most likely, we would not buy because there is no excess, to begin with. The real discipline in saving is to save first, then spend for other expenses. Unfortunately, we have been taught to do the opposite since we were young.
- Do not wait for the best price to buy gold. Though it might make sense to do so, most of the time, when the price gets to a lower point, the capital (money) to buy gold would not be there anymore. So, do not wait for the so-called best price.
- Consider buying gold using the Gold Accumulation Program (GAP) offered by Public Gold, the largest gold company in Malaysia. This method is the easiest with a low capital outlay considering the whole package of gold savings programs, especially in this region.
- As we repeat this method until reaching six grams, withdraw a five-gram gold bar and keep it in your wallet. Our Mahaguru Tuan Syukor Hashim always says that maintaining a gold bar in your wallet has a different aura and excitement. By doing so, our subconscious mind would encourage us to keep accumulating more gold in our savings.
Though this strategy seems so simple, I truly believe that it significantly impacts those who practice it.
From 1 gram to 1 kilogram
Though my suggestion was just 1 gram per month, this is just a ‘push’ factor to get started with building up this habit. And one gram per month is suitable for most of us, including college and university students. However, to those who have a more significant capital outlay, we can, by all means, adjust our monthly commitment. This can be one dinar, 10 grams, 100 grams, 250 grams or even one kilogram per month, especially for millionaires earning a 7-figure income.
It does not make sense for a person with a five, six or even seven-figure income earner to save just one gram per month, am I right? There is no motivation and excitement this way. Nevertheless, the amount of savings converted into gold is entirely up to individual financial conditions.
The critical thing is to set aside a target that is achievable and, most importantly, doable without fail. That is how habits are formed. Slowly but surely, gold should be accumulated to represent 10% of our net wealth approximately. This allocation would be the bona fide money that will come to our rescue during uncertain times.
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Your Gold Buddy,
Naresh G