The benefit of gold as forgotten saving

How does gold help us as forgotten saving?

Usually when we save in the bank, we love to check our savings account frequently. Our minds would actively ‘brainstorm’, thinking of ways to spend the money. Everything might seem to be ‘important’ then, even though deep down, it is not a real need at all.

It starts as a small expense, at first. Then another plan would follow suit on the following month. We might even think of the best justifications to rationalize our actions. Once we fall into this ‘trap’ of utilizing our money on unnecessary things, it’s a matter of time before we empty all our savings.

The 'black hole' effect

This behaviour is nothing but a financial ‘disaster.’ It creates a black hole effect where no matter how much money you tend to save, it eventually gets ‘leaked’ out. We might even set up an auto-debit feature to allocate a portion of salary into savings (which is a great idea) but as we get desperate for funds to satisfy our ‘cravings,’ guess where we would take the money from?

What does it mean by forgotten saving?

This brings to the concept that financial gurus have widely discussed that we must have at least one type of savings known as forgotten saving. The funds allocated under this are not regularly checked and 'forgotten'. By the time we noticed this fund, it would have grown to a sizeable amount. Subsequently, this will serve us for other practical purposes.

The benefit of gold as forgotten saving is that it helps prevent our savings from getting ‘leaked’ away. In the long run, this strengthens our pool of funds. In the future, the funds that have been saved can be of better use elsewhere, like in other investment tools or another form of asset.

Forget it with Gold

As we struggle with savings, one strategy that seems to work is converting the funds into gold. This way, we would not check the account regularly or get distracted with the numbers. 

When we save in the form of gold, we know that we convert our savings into grams of gold, and they would keep accumulating time after time. How much we have will be of concern only when we want to contribute in the form of a tithe (if it is relevant). Other than that, keep calm and continue allocating our savings into gold.

No More ‘Feeling Wealthy’

When we save money by buying gold, we no longer feel like we have a lot of money available to spend. With this way of thinking, our savings are much more protected, and the intention to buy unnecessary items would not be entertained. Technically, gold is just another form of money, and we are not entirely ‘broke.’

However, those who do not save in gold would eventually utilize their hard-earned wealth to buy other things that are most probably unnecessary. The savings would get ‘leaked,’ and as time goes on, slowly but surely, their savings would run out.

1 Gram per Month Strategy

One effective method for those who wish to begin setting aside gold as their forgotten saving is starting with one gram of gold each month. The notion here is to build the habit first without being too ambitious.

Consistently saving in small quantities over some time is better than buying for one time and then stopping entirely. The underlying principle in this method is on habit building and not about quantity.

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Hope you find it useful.

Your buddy on gold investing,

Naresh G