How gold serves as additional income source?
As we all know, gold does not generate income. Other tools like unit trusts/mutual funds yield dividends paid annually. Real estate/property can be rented out, and passive income can be earned from the monthly rental. Gold, on the other hand, has no such feature.
In essence, gold profit is realized through the “Buy Low, Sell High” method. The way to generate regular income using gold is by being an agent for a gold company. If you come across a ‘gold investment’ platform that promises monthly or annual returns, my kind advice is to stay away from such programs. Most likely, it is a scam disguised as a gold investment program.
Numerous gold investment schemes offer monthly income, but all went bust quickly. When such companies go bust, most likely, the people on top have taken the money for themselves and ran away, while the losing party consists of hardworking people who entrusted their hard-earned wealth. Finally, these people not only lost their money, but they also did not get the gold.
The only way to generate additional income
If you intend to generate income with gold, running a gold business is the answer. Consider being an agent for a reputable gold company with a good track record. While saving and investing in gold, we can generate side income. The profit with this combination is much better than the capital gain from gold alone.
Gold traders make money from “Buy Low, Sell High'' while gold business owners make money from every transaction (either from buying or selling). As we wait for the gold price to appreciate, we can earn from the transactions made.
Since we are already saving gold as part of our portfolio, we might take the opportunity to become agents for the same company. When the gold price appreciates, we profit from the capital gain of our gold savings. However, when the gold price depreciates, we earn from the transactions made by gold savers because they would buy gold to increase their savings. Our role is to serve as facilitators and guide the gold savers accordingly.
The perks of running a gold business
Based on the observations made, the following lists the benefits of running a gold business:
Gold is easier to sell: Everyone knows what gold is. As business owners, our role is to educate and share the benefits of gold in building wealth and the mechanics of buying, saving, and selling.
Gold has no expiry date: Making money with gold can take place either with buying or selling. The longer time duration we keep, the higher the potential profit. The gold price will appreciate and serve as a hedge against inflation in the long run.
No real capital to begin with: There are gold companies out there that allow us to become agents without paying any fees. Becoming an agent is as easy as buying a certain amount of gold, and this action automatically upgrades our status as an agent. There is no need to carry the gold items around because their transactions are made directly with the gold company when introducing friends or family. The company will pay the commission or royalties based on the transactions made.
Whatever business opportunity we embark on, the most crucial part is acquiring the proper knowledge. The extent of income generation from any business stems from the knowledge we gain and practice continuously.
Hence, if the plan is to run a gold business, get a mentor who has done this and has a track record so that the guidance we receive are genuine ones and, most importantly, we could avoid the potential mistakes. Isn’t it better to learn from someone else’s mistakes than from our own mistakes?
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Your buddy on gold investing,
Naresh G