Why do I save gold?

Each one of us would have different reasons on why we save gold. When I first encountered this program via Mr Zulkifli’s book, ‘Wang Emas,’ I was curious and decided to start small. I was already aware of how valuable precious metals are in protecting our money against inflation. My concern then was more on the practicality of this system. In general, there are three main reasons why would one choose to save gold:

• Set as a forgotten saving – to instil the habit of saving
• The value over the long term is protected
• The wealth is essentially in our hands

Set as a forgotten saving

I have the habit of spending money on e-commerce platforms, and we all know how this activity can deplete our savings quickly. So, to prevent myself from making unnecessary purchases, I convert a portion of my savings into gold for long-term wealth preservation. As more grams of gold get accumulated in Gold Accumulation Program (GAP) account, this indirectly serves as a forgotten saving where I do not have to bother.

Since my first purchase in 2018, all my transactions have been purchases (Outright Purchase, Easy Payment Plan, or GAP) or withdrawal (Gold-In-Transit Withdrawal). The system has constantly been improving while helping me to save money.

The value over the long term is protected

Earlier we read briefly on the concept of one dinar for one goat, and this phenomenon has demonstrated that the purchasing power was protected even after 1400 years. Even inflation and political or economic turmoil would not affect the purchasing power when the wealth is stored in the form of gold.

The wealth is essentially in our hands

When we save in the form of gold, we are not dependent on the support or backing of a third party. Their value is totally within our control (based on our saving habits). Gold is the only asset that is not part of the financial system. Therefore, their value depends entirely on their weight and purity, not any other entity. No one can freeze or block access to this asset class. Even a person who has been declared bankrupt can access this asset class.

On the other hand, paper money (or fiat money) is highly based on trust/faith imposed by the government. As long as the government is stable economically and politically, we can utilise these fiat monies. Meaning, their value might collapse at any point in time due to various uncertainties, especially considering the current conditions.

There is no such ‘control’ on gold, which means I have fewer things to worry about when wealth is saved in the denomination of gold. These three reasons are mainly why gold is chosen for long-term wealth preservation.

Gold as 'wealth insurance'

Nevertheless, it is worth noting that gold is just one of many financial tools we have access to. It is not everything, but it is at least something to consider to get us started. Tuan Azizi Ali (financial expert in Malaysia) stated that at least 10% of our wealth is recommended to be kept in the form of gold to serve as ‘wealth insurance.’

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Hope you find it useful.

Your buddy on gold investing,

Naresh G