How does gold come to the rescue during bankruptcy?
Typically, when one gets declared bankrupt, their access to financial accounts is blocked. When that happens, the spouse (if applicable) will have access to the family. But what happens when the spouse is no longer available to manage this?
This leaves them with an alternative way to save money by converting it into gold for safekeeping. This is echoed by a prominent financial expert like Michael Maloney, who says that precious metals (including gold and silver) are the financial assets that are not part of the financial system. In other words, no one would know how much wealth we have in the form of gold unless we tell people ourselves.
Similarly, those who have been declared bankrupt could still save money via gold simply because no official record is there, to begin with. There are no records in the bank, land registry office, or even in our tax filings. Saving gold does not require a grant or authorized letter.
Therefore, it is clear that gold serves as a wealth protector. It serves as the wealth of last resort when the country’s financial system collapses and when personal finance gets frozen.
‘Camouflage’ with gold
As stated earlier, the absence of a record for gold savings has made it convenient for individuals who have been declared bankrupt to have still some form of wealth associated with them. Another form of wealth is declared in one way or another, but this is not applicable for gold.
Despite this being the case, we should not take it lightly by forgetting to record our savings for further actions should we kick the bucket. There are numerous cases where this crucial information was never passed down, and the accumulated wealth went unknown.
Proof of ownership
Another weakness with this asset class is that the proof of ownership is difficult to justify. This is true, especially when we want to apply for financial assistance from a bank. Our savings in the bank can be easily extracted as proof. Our real estate ownership can be shown via Sales & Purchase Agreement (SPA), while rental income can be shown via Tenancy Agreement. The same is also true for unit trusts. For gold, however, it is not the same.
Nevertheless, if we can show the bank officers our actual gold ownership, then the chances of utilizing them as supporting assets or collateral are possible. Submitting a gold savings record obtained from a company that offers physical gold can be a potential solution.
If you find this article useful, consider sharing this with your friends and family. Let's create awareness about our money because nobody will come forward to help us.
Easy way to start gold savings can be found here: Gold Accumulation Program
Join my Facebook page for free here: FB page
Hope you find it useful.
Your buddy on gold investing,
Naresh G